Earlier this month, Wells Fargo conducted a survey of beer distributors in the US that collectively service around 100,000 retail outlets to gauge current industry trends. Here are the company’s findings.

  • While many distributors expressed caution about beer continuing to lose share to wine and spirits, as well as the continued over-saturation in the craft segment, confidence was sounded over the outlook for both imported beer and FMBs. Both segments, the survey found, are expected to grow by mid-single-digits in 2018
  • Constellation Brands will lead the way in growth “significantly above other manufacturers”, with estimates of around +9%. Indeed, the group is seen to be the most likely to take incremental shelf and/or cooler space, likely at the expense of MillerCoors, Boston Beer, Anheuser-Busch and Heineken
  • The outlook for Boston Beer is much brighter, many said, after the brewer posted a mid-single-digit fall in sales for 2017
  • Turning to brands, and Modelo Especial and Michelob Ultra are expected to generate the strongest sales growth this year – estimates are +14.7% and +13.5%, respectively
  • Nearly 80% of distributors expect the Corona Premier and Corona Familiar brand extension to be successful, with Premier expected to be a “real” contender to Anheuser-Busch InBev’s Michelob Ultra
  • Some distributors, however, expect the pair to cannibalise Corona, thereby limiting the Constellation-owned brands’ volume growth this year
  • Around three-quarters of the distributors surveyed said they are positioning Corona Premier and Corona Familiar within the Corona portfolio, despite Constellation’s preference for the pair to be placed next to Michelob Ultra
  • Speaking of Michelob Ultra, distributors are bullish on the brand, which has been the success story of recent years for A-B InBev in the US
  • That said, the launch of Michelob Ultra Pure Gold and the roll-out of 70z bottles for Ultra in the first quarter are forecast to have only a minimal effect on volumes for brand Michelob
  • The general consensus among distributors is that Constellation has been “late to the game” in the FMB segment, with its Svedka Spiked Premium Seltzers and Corona Refresca variants
  • Consolidation in beer is expected to continue, led by A-B InBev, MillerCoors and Constellation. Despite this, the majority believe the overall M&A environment will moderate in 2018
  • Finally, there was hardly any mention of higher aluminium costs and their effect on the beer category. As Wells Fargo’s Bonnie Herzog concludes: “This suggests to us that investor concerns about tariffs/higher input costs may be unfounded”

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