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COPYRIGHT 2005 Bev-AL Communications, Inc.
This category includes a multitude of different segments: traditional domestic super premium brands; craft brews, and flavored malt beverages. The category had been growing steadily until 2003 when the overall superpremium beer market declined 3.9%. That downward trend continued last year with superpremiums dropping another 1.0% to 203.9 million 2.25-gallon cases. The persistent growth of the light category continues to effect consumption of superpremiums. Plus, a decline among flavored malt beverages masked the growth of the craft beer segment last year.
Among superpremium brands the two leaders with a 14.8% combined share of category, Yuengling Traditional Lager and Michelob, moved in totally opposite directions last year. Yuengling, the oldest brewer in America, has endured many ups and downs but has seen resurgence in the past few years. Dick Yuengling's strategy to push the brand from its origins in Pennsylvania to expanded distribution across the country has resulted in enormous growth over the past decade. Last year the brand grew another 4.1% to 18.6 million cases. Conversely, Michelob continues to falter. In contrast, its low-carb sibling, Michelob Ultra, continues to climb. Michelob dropped another 20.7% to 11.5 million cases in 2004. This is the third straight year of double-digit declines for the brand. The sharp decline in cases was mirrored last year in an even more dramatic decrease in ad spending by Anheuser-Busch on the brand. In 2003, $9.5 million was spent on advertising for Michelob, that number declined 58.0% last year to $4.0 million.
The third-largest brand in the category, Samuel Adams Boston Lager, gained 100,000 cases last year to end 2004 at 9.5 million cases. Similiarly, a majority of its younger and comparitively smaller craft cousins on a case sales basis also increased last year.
George Killian's Irish Red, brewed by Molson Coors in the U.S. from an Irish recipe, has been declining for the past four years. The brand peaked in 2000 at 9.9 million cases and ended 2004 at 7.6 million cases, a 23.0% decline over the past four years.
Craft brewers across all levels posted positive results last year gaining approximately 7% collectively. The number of brewpubs both large and small, and regional specialty breweries grew in number last year. The characteristics of the craft segment lends itself to the growth that is being realized. Since craft brews are offered in a plethora of varieties they lend themselves to the consumer movement to experiment with different beverage products. In addition, the gain among craft's main competitor in the beer industry, imports, has slowed. Among the craft beers tracked, several posted strong positive gains last year. This includes Fat Tire Amber Ale (+14.8%) and Widmer Hefeweizen (+23.6%). Craft brewers are offering unique and specialized products tailored to a targeted clientele. The flavored and seasonal craft offerings available are helping this growing segment stay on top of the beer market.
Flavored malt beverages grew steadily until 2002. That's when the segment began to fade, due in large part to established brands in the category losing cases. Some of the losses were offset by new flavors and new product introductions. The new offerings, however, were unable to stop the overall decline in cases for this sector of the superpremium market.
The future of the superpremium category depends on the three pieces that it consists of. The gain among craft beers is showing no sign of slowing down, with this segment posting the largest gain in the beer industry in 2004. The flavored malt beverage sector continues to depend upon new flavors and offerings being introduced to the market. For the overall category to grow, crafts and flavored malt beverages will need to post positive gains...
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