Imported beer.(The Beer Market)

Publication: Beer Handbook

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COPYRIGHT 2005 Bev-AL Communications, Inc.

Imported beer continues to outperform domestic. Imports have grown every year since 1991. The decline in that year was due, in part, to the doubling of the Federal Excise Tax.

Total imported beer climbed 1.8% last year to reach 332.9 million 2.25-gallon cases. This compares with a 0.6% increase among domestic brands. Imports now account for 11.7% of the overall beer market, up from 4.2% in 1991. The trend occurring across the entire beverage alcohol industry of consumers gravitating to premium offerings is attributable for fueling growth among imported brews.

Favorable demographics are also playing a role. Corona Extra continued its growth last year rising another 1.9% to end the year at 97.9 million cases. The brand became the category leader in 1998 when it overtook Heineken and has not looked back since. The case difference between the two brands is almost 35 million cases. With a total of four, Mexico claims more imports in the top 10 compared with any other country. Mexican beer brands have benefited from the growth of the Hispanic market. Advertising expenditures have also equated to success for several Mexican beer offerings. More than $30 million a year is spent on advertising for Corona Extra. Other Barton/Gambrinus brands in the top ten include: Modelo Especial and Corona Light. The former rose 18.2% and the latter climbed 6.9% in 2004, despite price hikes. Mexican beer imports accounted for 44.7% of the overall import beer market last year.

Heineken has also enjoyed growth although on a smaller scale compared with Corona. The best-selling brand from the Netherlands grew 1.0% last year to 63.1 million cases. Another development in the import market is that as of January 1st of this year, Heineken USA will take over the sales, distribution and marketing rights for five Femsa Mexican brands--Bohemia, Carta Blanca, Dos Equis, Sol and Tecate--from InBev USA. The Femsa-Heineken deal is intended to help these five brands better compete against the aforementioned Barton/Gambrinus brands, although Corona Extra by itself outsells the Femsa brands in aggregate by approximately a five to one ratio.

Amstel Light, the other leading brand from the Netherlands, grew 4.2% last year. Despite these gains from the country's leading brands, the Netherlands accounts for 25.1% of the overall import beer market. The third-largest import brand, Canadian Labatt Blue, declined 5.9% last year to 14.2 million cases. The brand has lost cases for each of the past two years following its peak of 16.0 million cases posted in 2002. Although imports from around the world are having a more difficult time competing in recent years, brews from Canada have posted the most sizeable losses. Another beer brewed in Canada though hailing from Australia that lost cases last year was Foster's. The brand fell to 7.3 million cases for a drop of 14.1%.

A real bright spot on the imported beer market is Stella Artois. The brew from Belgium grew 50.4% in 2004 to 2.4 million cases, up from 15,000 cases in 1998. The brand has catapulted Belgium to the seventh largest importer of beer into the U.S. Imports from Belgium since 1999 have grown at triple digit rates.

Molson brands continued to decline with virtually every brand in the portfolio posting a decline in case sales. The merger of Molson with Coors, finalized early this year, catapulted the combined company to fifth-largest brewer in the world. The new Molson Coors is hopeful that they can reverse the recent downward trend across both company brand lines.

Two smaller offerings highlighted last year due to exceptional performance continued the trend in 2004. Red Stripe climbed 20.5% and Moretti rose 29.1% last year. Another niche brand that experienced annual growth until last years is Peroni. The Italian brand fell 4.0% last year following several years of annual growth.

Consumers in the 35-to-44 year age group are the largest consumers of import beer (24.8%). Followed closely by (24.0%) beer drinkers aged 25-to-34. This is slightly different from a few years ago when the 25-to-34 demographic was the larger of the two demographics.

As long as consumers keep gravitating toward premium unique offerings, imported beer will continue to prosper. The segment, however, is more vulnerable to consumers switching to various wine and spirit offerings, compared with other beer categories. With increased marketing due to the pressure from the premium craft segment, competition among craft brews and imports will become fierce.

Consumption of Imported Beer, 1997-2004 (000 2.25-Gallon Cases) '97 196,150 '98 226,059 '99 250,328 '00 278,284 '01 302,880 '02 321,000 '03 327,000 '04 332,900 Note: Table made from bar graph. Imported Share of Total Beer, 1997-2004 '97 7.5 '98 8.5 '99 9.2 '00 10.1 '01 10.9 '02 11.4 '03 11.6 '04 11.7 Note: Table made from bar graph. Consumption of Imported Beer by State, 1997-2004 (000 2.25-Gallon Cases) State 1997 1998 1999 2000 Alabama 1,038 1,290 1,447 1,516 Alaska 951 1,060 1,130 1,235 Arizona 4,868 5,630 6,150 6,797 Arkansas 1,089 1,250 1,400 1,601 California 36,396 42,800 47,200 52,301 Colorado 2,583 3,154 4,400 4,800 Connecticut 3,537 3,950 4,300 4,518 Delaware 1,032 1,170 1,253 1,366 Dist. of Columbia 773 840 920 960 Florida 12,444 14,701 17,386 19,475 Georgia 4,322 5,310 6,201 6,493 Hawaii 1,708 2,010 2,100 2,389 Idaho 483 530 580 631 Illinois 12,206 13,840 14,900 16,308 Indiana 1,060 1,290 1,400 1,599 Iowa 354 430 467 541 Kansas 549 630 683 774 Kentucky 750 830 900 1,045 Louisiana 1,247 1,625 1,838 1,914 Maine 687 780 847 953 Maryland 3,298 3,730 4,100 4,611 Massachusetts 6,891 7,746 8,323 9,457 Michigan 6,852 7,816 8,382 9,628 Minnesota 1,395 1,649 2,042 2,370 Mississippi 909 1,100 1,181 1,354 Missouri 1,116 1,358 1,492 1,768 Montana 410 470 520 587 Nebraska 300 330 400 457 Nevada 3,250 3,650 4,466 5,011 New Hampshire 1,276 1,452 1,620 1,813 New Jersey 9,113 9,930 10,784 11,309 New Mexico 1,394 1,570 1,710 1,914 New York 22,967 25,910 28,467 31,085 North Carolina 4,796 5,550 5,954 6,421 North Dakota 240 270 290 304 Ohio 4,904 5,673 5,925 6,302 Oklahoma 1,118 1,350 1,450 1,627 Oregon 1,144 1,576 1,846 2,155 Pennsylvania 11,387 12,000 12,777 14,993 Rhode Island 1,305 1,396 1,422 1,717 South Carolina 1,769 2,010 2,200 2,555 South Dakota 276 300 320 343 Tennessee 1,645 1,900 2,050 2,365 Texas 7,045 9,035 10,397 12,300 Utah 406 480 520 580 Vermont 888 952 1,005 1,075 Virginia 6,550 7,380 7,969 8,938 Washington 3,287 3,834 4,199 4,684 West Virginia 497 550 600 688 Wisconsin 1,455 1,762 2,185 2,396 Wyoming 190 210 230 261 Total U.S. 196,150 226,059 250,328 278,284 State 2001 2002 2003 2004 Alabama 1,600 1,640 1,660 1,640 Alaska 1,300 1,350 1,380 1,480...

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