Going Mainstream?

Imports are a big part of the U.S. beer business -- and theyre going to get bigger.As recently as 2004, full-calorie mainstream domestic beers commanded more share in supermarkets than imports. Thats not the case now. Imports in 2007 represented more than 14 percent of supermarket beer sales, according to beer sales statistics from Nielsen. Mainstream full-cal domestics, meanwhile, accounted for just over 11 percent.That stat highlights how imports are an increasingly important part of the U.S. beer business. And that trend is only going to continue. The latest issue of Brew took an in-depth look at how imports have transformed -- and will continue to transform -- the U.S. beer business. From the issue:How big is imported beer? Consider: Two of the countrys top five beer suppliers are importers. Corona Extra and Heineken the two brands that have driven import growth are among the countrys top 10 beers, according to figures from Beer Marketers Insights. Corona is No. 6 and Heineken is No. 9. Imported beers share of total beer volume more than doubled between 1996 and 2006 to 13.8 percent of industry shipments, according to figures from BMI. Imports command a leading part of the industry revenue pool and their share is forecast to grow, according to Miller Brewing Company estimates.In short, imported beer is a big business and its going to get bigger. Powerful consumer and cultural trends are driving it.Importers are better positioned to push their brands than ever.And while imports might experience hiccups Corona Extra volume slipped modestly for the first time since 1991 amid transition issues their current and future significance is undeniable. And imports success is likely to continue to come at the expense of mainstream domestics.Imports will continue to take share from domestics for a good period of time, says Kaumil Gajrawala, an analyst who follows the beer industry for UBS.Says Justin Hott, an analyst for Bear Stearns: Its going to be a long-term trend where imports are going to grow faster than the industry.The domestic brewers are trying to respond. Theyre trying to tap into the growth of imports with their own entrants. But at the same time they need to find a way to market their core brands in a new era or risk losing more share.What might the future hold for the mainstream domestics? In an August 23 interview with Beer Business Daily, Boston Beer Company founder and Chairman Jim Koch said, In 1992, I predicted that better beer [imports and crafts] would get to 15 percent of the market and people thought I was crazy. Now, I will confidently predict that its going to get to a third of the market.Is it realistic? The revenue picture already is moving in that direction.According to Miller estimates, imports represented about 17 percent of the industrys revenue pool in 2006; they are projected to claim nearly 22 percent in 2012.Over the same period, craft share is expected to increase to more than 10 percent from the current 6.4 percent.Meanwhile, premium light share is expected to be flattish. And full-calorie premium share is predicted to slide to less than 10 percent from about 15 percent.Projections can always change. If Anheuser-Busch manages to turn around Budweiser, for instance, the full-calorie premium trend line would improve dramatically given the sheer size of that brand. (Interestingly, the new ad campaign that positions Bud as The Great American Lager takes a shot at imports.)But imports clearly pose a challenge to domestic brewers.Read the rest here. If you would like a subscription to the print version of Brew, please drop a line with your name and mailing address here.