For beer importers, it should be the perfect
storm: consumers are still trading up for quality
products, but at the same time, they’re trying to
drop unnecessary calories.
So why are imported light beers still
struggling?
According to Global Information, Inc.,
imported beer sales increased 58 percent between
2001 and 2006. Consumers, the market research
firm reports, are shifting from the purchase of
domestic to imported beer, favoring its quality
and branding appeal.
“The trade-up factor that is everywhere in
consumer goods these days is definitely a part
of the beer phenomenon,” says Maryanne
Origlio, director of corporate communications
at Origlio Beverage, a distribution company
in Philadelphia, Pennsylvania. The onslaught
of specialty brands in almost every product
category is also coming into play. “Because
specialty brands are growing, I think people are
more aware of quality these days. Quality and
authenticity have become more important to
people.”
As consumers seek products perceived as more
sophisticated and of higher quality, imports have
gained ground. The beer category has been no
exception to this trend, demonstrating that more
and more, shoppers are turning to products that
aren’t produced on their own turf.
Still, statistics gathered by Nielsen show
that imported beer sales in supermarkets are
slowing. From March 21 to April 21, imports
gained a tenth of a point in case share, with
Corona Extra losing three tenths of a point of
case and dollar share, and Heineken losing one
tenth. Heineken Premium Light did gain twotenths
of a point of case share, but it’s hardly
the massive growth the product took on last
year, when it stormed onto the market to gain
nearly 3 percent of the category share. And a lot
of imports’ thunder has been stolen by the craft
segment, which has seen fast continued growth.
The light import segment has come to
encompass about 15 percent of the category’s
dollar share, but very little of that extends
beyond three brands: Corona Light, Heineken
Premium Light, and Amstel Light.
Nevertheless, beer industry insiders remain
confident that the trade-ups that have fueled import growth will continue to result in more
consumer uptake of light import brands.
“What is happening in the imported light
beer segment of the marketplace is very similar
to what is occurring with imports in general,”
says Don Blaustein, senior vice president of sales
at Heineken USA in Atlanta, Georgia.
“It’s no different from why people are
interested in imports,” he states. “People are
interested in imports because they are more full
flavored, they have a better image, and they have
more character. There is a trade-up going on in
society across a number of categories. The same
thing is happening with light beer.”
In fact, with the demonstrated success of
those three top import light brands, brewers
seem steadfast in their focus on this market.
Beck’s continues to sell its own light product,
while Heineken recently renewed its agreement
with FEMSA, resulting in its continued status as
importer of Dos Esquis, Tecate, Tecate Light,
Sol, Bohemia and Carta Blanca in the United
States.
That begs the question, however: With the
increase in imported light beers being introduced
into the marketplace, is there room for all of
these brands?
Industry insiders answer with a resounding
“yes,” citing consumer demand as the driving
force. “When Miller Lite started this whole
thing, people laughed at them, but the category
has been growing, and as long as the consumer is
obsessed with healthy living and how to become
better at eating and drinking, they will look
for alternatives – whether it’s low-carb or lowcalorie,”
says Tim Jacobi, former senior brand
manager at the Pabst Brewing Company, who
is currently working in procurement at a U.S.-
based grocery chain. “I believe that the light beer
category will continue to grow, and that growth
can be fuelled by imports.”
The growth of micro- and craft brews should
actually help light import growth, adds Origlio.
“I think by people being exposed to [craft
beer],” she says, “When they want to drink a
light beer, they will look for something that not
only represents not only more quality, but a little
bit more sophistication.”
So what’s holding light imports back from a
sustained take-off? A great deal of the problem is with execution, according to Jacobi.
Jacobi notes that most brewers – save for
Budweiser and Miller – treat their light beer
brands as extensions of their core brands,
which can pose a challenge to retailers. “A lot
of these brewers do not treat their light brand
as an independent brand with an independent
advertising campaign,” he says. “The packaging
is always linked. However, they attract very
different consumers. Not funding their
campaigns sufficiently to make that distinction
is causing a lot of problems.”
In stocking products according to sales,
brands like Bud Light, for example, usually
receive most shelf space in prime, eye-level real
estate.
“I would be interested to see if you put Bud
Light elsewhere, and put the smaller brands,
like Tecate Light, if that becomes a focus for the
retailer, smack in front of the consumer,” Jacobi
challenges. “Bud Light has a very loyal following.
The consumer will find that beer. They will look
for it, whether it is in the middle shelf, top shelf,
or lower right hand corner. At this point in time,
few consumers will seek out a Tecate Light or a
Heineken Light.”
But that might change, he says, with better
placement for light imports. It may be starting
to happen, but more slowly than is perceptible,
according to other experts.
“To their credit, more and more retailers are
increasing sales and profits by fully leveraging the
imported light beer category,” notes Bill Hackett,
president of Crown Imports. But, he adds, more
help needs to come from manufacturers, as
Jacobi argued.
Off-premise retailers recognize the importance
of carrying a wide variety of brands, but Hackett
believes that importers – and other channels
– can help stores sell the entire category, by
recognizing the brands that are driving sales,
and assigning space and promotion to them. “In
the off-premise, retailers who want to commit
to the category and its strong sales and profits
should consider offering a wider selection of
brands to the consumer. It’s not just about one
brand, but about offering a variety of brands to
the consumer.”
Aside from the attraction to drinking beer
comprised of fewer calories, a large portion of the consumer appeal behind imported light
beers is driven by image: driving a Porsche versus
a Mustang produces very different feelings, and
the same concept can be applied to beer. “People
are branded by what they drink, and besides the
taste, they like to stand and hold a product that
is perceived as higher quality,” Origlio says.
When brewers succeed in communicating
why their beer is special, different and of better
quality, Jacobi adds, people will pay for it. “That
means more margins for the brewer, more
margins for the distributor and more margins
for the retailer. People equate price with quality:
if it’s expensive, it must be good.”
The investment that both brewers and retailers
are making in the imported light beer category
will continue to drive its growth in the coming
years, Hackett believes. “There’s only one place
this category is going, and that’s up,” he declares.
“As retailers continue to focus on the imported
light beer segment, and consumers continue to
trade up to imported light beers, the category
is poised for great things in the short and long
term. The consumer is clearly embracing these
brands, and we expect that to continue, especially
as investment in the segment continues.”