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Fall Winds Brewin' Changes
November 9, 2007
– In September, the calendar said it was fall but the weather in New
York was holding onto summer. An unseasonably warm beginning to fall may
be the reason for the seemingly “odd” trends seen in the NY Home D
Retail Market for the four week period ending October 27. We say “odd”
because looking at the reports for the period left us scratching our
heads. Brews that were consistently increasing case share week after
week suddenly had little gain or significant losses. And the reverse was
also seen. “Odd” was the first thought that came to mind.
The oddest brew of them
all is Boston Beer. Beer Marketer’s Insights touted the growth in craft
beer as being driven by Boston Beer. Both IRI and Nielsen cited figures
showing Boston Beer is up in supermarkets, but the NY Home D market does
not reflect those results. Sam Adams has consistently been losing case
share in this market. For the four week period ending 10/27, Boston was
the biggest loser with an almost .46 case share loss.
Could the case share
loss be weather related and the seasonality of many of Boston’s brews?
Mentally, we
were ready for fall so a Summer Ale did not seem fitting,
yet an Oktoberfest on a 75 degree day would also
not satisfy. Perhaps,
the NY market is just looking for alternatives to such extreme beers and
finding it in other brews that may have more of a market focus.
And the alternatives
seemed to have faired well. Blue Moon’s case share was up almost .15 for
the four week period ending 10/27. Even Saranac and Brooklyn who have
been showing consistent case share losses month after month had
respectable gains. Sierra Nevada, who has been slowly increasing case
share, squeaked by with an increase while Blue Point continued its rise.
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To Rely on Depletions is to Deplete Your Knowledge
November 9, 2007 – In lieu of actual retail sales data, many brewers are
relying on their major distributors’ depletion data to supply them with
their sales information. Viewing Home D sales in this manner provides a
very distorted view of the market since the majority of Home Ds sell to
both wholesale and retail clients. How does this distort the sales
picture? When the Home D sells to wholesale clients, that sale may
turnover one, two or even three times before it reaches the actual
consumer. Depletion reports end their story at the Home D but the story
often continues and brewers do not see the story’s ending. And that is
why The BeerCounter™ reports, which provide Home D retail sales data
only are of such significance.
A
key executive at one well known regional brewer was baffled by the
inconsistency between the depletion reports his distributor provided to
him and the retail sales shown on The BeerCounter
reports. What this executive fails to realize is that depletion reports
don’t tell him how many times the beer has changed hands.
We
have discovered a direct correlation between the success of a brand and
their recognition of the depletion report’s limitations. Those brewers
who recognize the benefit of the Home D retail sales data are the same
brewers who are significantly increasing their case share in this
market.
And those same
brewers are using what they learn in this market to apply it to other
markets. How’s your view?
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Coors Wins New York Marathon
November 20, 2007 – We were curious to see the effects
of Coors’ sponsorship of the New York City Marathon on the New York Home
D Retail market and found their sponsorship was definitely a winning
play for them. Coors’ Light’s case share for the two week period ending
November 10 increased more than 1.10. Coors’ clearly stole some case
share from Bud Light which saw a decrease of more than .45. Since we’ve
been closely monitoring this data, we have never before seen Bud Light
have a losing period. Coors Light outsold Bud Light more than 2:1.
In
fact, of the seven top light brands in the NY Home D Retail market, only
Miller Lite was able to gain some of Coors momentum. Miller Lite has
consistently been losing case share but managed to increase share by .53
for the two week period surrounding the marathon, and ending November
10.
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Does A-B Know Something You Don’t?
November 20, 2007 – According to Beverage World, A-B’s US sales growth is less than 1% so far this year and that growth is due to
more recent acquisitions, such as the European brews it started
importing in the spring.
A-B announced that it has plans to put more
money into advertising its core brands—Budweiser, Bud Light, Michelob
and Michelob Ultra—and to reduce spending on smaller brands like Bud
Select and Rolling Rock. This announcement comes when its clear
consumers are seeking small-batch "craft" beers and imports.
Beverage World went on to say that August Busch, IV, focused on the fact
that their core brands are not growing, is seeking to combat their core
brand’s downward trend. As a result, A-B conducted extensive consumer
research into the changing habits of consumers. They concluded that they
may be able to target some of their mainstream brands, such as Michelob,
at consumers who favor crafts and imports.
A-B’s rationale to extensively market their core brands in the wake of
consumers seeking craft beers and imports reminds us of the sub-prime
mortgage debacle. We’re just not sure if A-B is playing the part of
Goldman Sachs who steered clear of sub prime mortgages, or if they are
like the herd of other bankers who couldn’t get enough of the sub-prime.
While A-B is certainly going it alone like Goldman Sachs and not
following everyone else to jump into the craft market, we’re wondering
if they’ve got their blinders on and not really seeing what’s going on
in the market. It will be interesting to see if consumers can be
convinced to view Michelob on par with a craft beer. Each of the
Michelob brands in the NY Home D retail market has had significant YTD
case share losses.
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