BOSTON ( TheStreet) -- St. Patrick's Day can be tough for beers that aren't Diageo's (DEO) Guinness or easily dyed green, but there's plenty of opportunity for brewers and brands to get a holiday push.
Last March, U.S. beer production increased nearly 15% from February 2009, according to the Treasury Department's Alcohol and Tobacco Tax and Trade Bureau. Though overall beer shipments in the first half of last year fell by 3% and dropped by 0.8% for the year, it was a sign that the bleeding that led to a more than 2% loss in 2009 was close to an end. It was also a better recovery than was reported in Ireland, where beer sales by volume fell 6%, according to Euromonitor International.
|Lower-end products such as Busch are selling more in recent years, cutting into sales of parent-company beers including Bud and Bud Light -- just as those beers face growing competition from imports and craft beers as well.|
That sounds small, but it's big news for American macrobrewers such as MolsonCoors (TAP) and Anheuser-Busch InBev (BUD), which saw their market share flatten out at 29.6% and 49% respectively from 2008 to 2009, according to Beer Marketer's Insights. By the end of last year, Euromonitor put A-B InBev's market share at 50%, while MolsonCoors crept up to a solid 30%.This doesn't mean everybody's happily sipping the dyeable fizzy yellow foam of Coors and Budweiser. MolsonCoors' volume was down 1.9% last quarter as the king of American lawnmower beers -- the tried-and-true standard lager -- saw sales fall 5% from fancier and more laid-back competitors taking big swigs of its market share. Euromonitor says such premium lagers as Boston Beer's (SAM) Samuel Adams brand saw sales increase 3%, while "economy lager" such as Drinks Americas' (DKAM) Rheingold and Miller-brewed Pabst grabbed 1% of Bud and Miller's spilled share. While Bud Light and Bud still maintained 21.2% and 10.2% of the market respectively last year, according to Euromonitor, that was down from 21.3% and 10.8% in 2009 and cannibalized by its own lower-end products, such as Busch, shares of which rose to 6.9% from 6.5%. The imports aren't cutting the big boys any breaks either. After the recession crushed imported beer sales by 3.4% in 2008 and sent them swirling to a 10% decrease in 2009, beers from abroad rebounded with a 4.9% jump in shipments last year. Perhaps no brand has bounced back better than fun-in-the-sun-fueled Corona, which saw sales diminish 1.7% in 2007, 4.6% in 2008 and a vacation-ruining 9.8% two years ago. As import sales bubbled, Corona's sales surged 4.2% in the first nine months of last year, with drinkers adding a lime-style twist by going through 5% more inventory last quarter than they did at the same time in 2009. Fans who pigeonhole Corona into summer and Cinco de Mayo are missing a much bigger, sunnier picture, as Corona's market share in Ireland itself -- never mind on St. Patrick's Day -- has grown from 0.3% in 2005 to 1.3% today (while Guinness' 31.1% piece of its home market fizzled to 26.6%). In the current beer economy, any big brewer could have their sales skunked by an import or upstart. When Boston Beer reported its earnings from last quarter, it wasn't notable for a 62.7% increase in earnings or an 8% increase in revenue, but because of a 16% increase in advertising to $32.9 million that seemed aimed at snagging some extremely vulnerable market share. With two brewers holding 80% of the U.S. market, that's share just waiting to be tapped. Constellation Brands' (STZ) Crown Imports, which distributes Corona, is the third-largest beer supplier in the country, yet holds only 5% of the market and is angling for more. The biggest craft brewers in the country, Boston Beer and Pennsylvania's Yuengling, hold little less than 1% of market share apiece despite their continued growth -- which, in Boston Beer's case, has been 12% annually. The Craft Brewers Alliance (HOOK) -- which includes regional breweries Red Hook, Goose Island, Kona and Widmer and is 35.6% owned by A-B InBev -- still only produces about a third of Boston Beer and Yuengling's output despite a distribution deal with A-B InBev and a deal with the big brewer last year that gave them more marketing money to throw around. The importers and little guys are all too aware of this and got a big taste of success last year when craft beer sales grew 9% by volume, even as U.S. beer sales on the whole dropped 3%. If a small brewer such as Lakewood, N.Y.'s Southern Tier brewing can make a big push by expanding brewery capacity, installing a bottle line that increases production to 200 bottles a minute from 60 and expanding the distribution radius for its Jah*Vah Imperial Coffee Stout and Unearthly IPA to Kentucky and North Carolina -- as spokesman Nathan Arnone says it did within the past year -- the big brewers and certain Irish stouts that lost about 10% of their market share before last year's St. Patrick's Day should expect other upstarts to be just as tenacious about making a pint of their beer the one in holiday revelers' hands. "There are certainly lots of great beers that can be summoned for that celebration," says Matt Simpson, better known as The Beer Sommelier. "But I don't know many, if any, brewers that are making special products for this day." -- Written by Jason Notte in Boston.
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