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Beer: The Market - US - December 2010

In this report, the second part of a two-part report on beer, Mintel takes an in-depth, market-centric view of the market. The consumer-centric view is covered in Mintel’s Beer: The Consumer—U.S., November 2010. The beer market faced numerous challenges in 2009, the recession being the key impediment to growth. Consumer demand for beer declined; dollar growth in the market came as brewers decided to increase prices despite a low-key economy. In order to provide purveyors with a clear picture of this multi-faceted market, Mintel conducted a comprehensive analysis of beer performance. The core themes explored in this report include, but are not limited to:

  • How the market has performed in the last five years and the growth outlook for the next five years
  • Detailed analysis of various beer segments; which segments promise growth and which ones will find it challenging to find growth in the next five years
  • How the current recession has affected consumer brand choices
  • The consumer movement from on-premise to off-premise channels
  • Major trends in new beer products
  • A detailed analysis of advertising strategy, including digital marketing

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Table of contents

  1. Scope and Themes

    • What you need to know
      • Definition
        • Data sources
          • Sales data
            • Advertising creative
              • Abbreviations and terms
                • Abbreviations
                  • Terms
                  • Executive Summary

                    • Beer volume declines in 2009; dollar sales growth through price inflation
                      • Domestic beer outperforms imports
                        • Domestic light declines for the first time since its inception
                          • Domestic premium cedes share to domestic popular
                            • Craft beer continues to shine; super-premium suffer from trading down
                              • Imports suffer from the recession, competition from craft beer
                                • Marketing budget stable despite weakness in the economy
                                • Insights and Opportunities—a Market-centric View

                                  • Growing choices in craft beer—pros and cons
                                    • Social media—a risqué marketing tool or a medium to court consumers
                                      • Organic beer may require organic hops by 2013—ups and downs
                                      • Inspire Trends

                                          • Trend: Extend My Brand
                                          • Market Size and Forecast

                                            • Key points
                                              • Beer demand declines; price increases fuel dollar sales growth
                                                • Sales and forecast of beer
                                                  • Figure 1: Total U.S. retail sales and forecast of beer, at current prices, 2005-15
                                                  • Figure 2: Total U.S. retail sales and forecast of beer, at inflation-adjusted prices, 2005-15
                                                  • Figure 3: Total U.S. volume sales of beer, 2005-10
                                                • Fan-chart forecast
                                                    • Figure 4: Fan-chart forecast for beer, at best-, worst-, and central-case scenario, 2005-15
                                                    • Figure 5: Fan-chart forecast for beer, at best-, worst-, and central-case scenario, 2005-15
                                                • Market Drivers

                                                  • High unemployment rate continues to impede consumer spending
                                                    • Figure 6: Employment status of the civilian non-institutional population 16 years and over, 2000-10
                                                  • Key beer consumers—men, Hispanics, and blacks, hit hard by unemployment
                                                    • Figure 7: Unemployment status among civilian non-institutional population, by gender and race/Hispanic origin, October 2009-October 2010
                                                  • Obesity rates steady, but still a cause of concern
                                                    • Figure 8: Percentage of population aged 20 and over who are overweight or obese* or extremely obese, 1988-2008
                                                  • Male population growth important to the market
                                                    • Figure 9: Population of men aged 21 or older, 2005-15
                                                  • At-home beer consumption on the rise due to the recession; on-premise consumption declines
                                                    • Figure 10: Influence of the recession on drinking behavior, by age, March 2010
                                                  • Alcohol consumption at bars/restaurants, by age
                                                    • Figure 11: Alcoholic beverage consumption at bars/restaurants compared to last year, by age, January 2010
                                                  • Hispanics and blacks offer growth opportunities
                                                    • Figure 12: U.S. Hispanic population aged 21+, 2005-15
                                                    • Figure 13: U.S. black population aged 21+, 2005-15
                                                • Competitive Context

                                                  • Spirits boast the biggest consumer base, outpaces beer in 2010
                                                    • Figure 14: Trends in beer consumption versus other alcoholic beverages, May 2005-June 2010
                                                • Segment Performance

                                                  • Key points
                                                    • Domestic brews take share from imports
                                                      • Domestic beers continue to raise prices; imported brews keep prices stable
                                                        • Figure 15: Price of domestic and imported beer in FDMx, 2005-10
                                                      • Total volume sales of beer, by segment
                                                        • Figure 16: U.S. volume sales of beer, by segment, 2005-10
                                                        • Figure 17: U.S. sales of beer, by segment and sub-segment, 2008 and 2010 (est.)
                                                    • Segment Performance—Domestic Beer

                                                      • Key points
                                                        • Total volume sales of domestic beer
                                                          • Figure 18: U.S. volume sales of domestic beer, 2005-10
                                                        • Domestic beer—light beer
                                                          • Light beer volume declines; suffers from trading down and economic woes
                                                            • Innovation necessary to stimulate growth
                                                              • Total volume sales of light beer
                                                                • Figure 19: U.S. volume sales of light beer, 2005-10
                                                              • Domestic beer—premium beer
                                                                • Premium beers suffer from “death of the middle” trend
                                                                  • Lack of innovation and decline in ad budget exacerbate segment’s woes
                                                                    • Blacks, Hispanics, and young adults can be targeted through innovation
                                                                      • Total volume sales of premium beer
                                                                        • Figure 20: U.S. volume sales of premium beer, 2005-10
                                                                      • Domestic beer—popular beer
                                                                        • Unfavorable economy favors popular beer
                                                                          • Figure 21: Top 10 domestic beer brands, by volume growth rate between 2008 and 2009
                                                                        • Total volume sales of popular beer
                                                                          • Figure 22: U.S. volume sales of popular beer, 2005-10
                                                                        • Domestic beer—super-premium and craft beer
                                                                          • Craft beer growth makes up for the decline in super-premium
                                                                            • Craft has yet to tap women, blacks, and Hispanics
                                                                              • Super-premium beers suffer from trading down, competition from craft
                                                                                • Total volume sales of super-premium and craft beer
                                                                                  • Figure 23: U.S. volume sales of super-premium and craft beer, 2005-10
                                                                                • Domestic beer—ice beer
                                                                                  • Ice beer volume sales decline owing to the economy and lack of advertising
                                                                                    • Growth potential by marketing to young adults and blacks
                                                                                      • Total volume sales of ice beer
                                                                                        • Figure 24: U.S. volume sales of ice beer, 2005-10
                                                                                      • Domestic beer—malt liquor
                                                                                        • Lack of universal appeal and advertising contribute to volume decline
                                                                                          • Blacks and young adults offer growth potential
                                                                                            • Total volume sales of malt liquor
                                                                                              • Figure 25: U.S. volume sales of malt liquor, 2005-10
                                                                                          • Domestic beer—flavored malt beverages

                                                                                            • Segment fades amid distressed economy
                                                                                              • New FDA ruling may further bleed sales from the segment
                                                                                                • Total volume sales of flavored malt beverages
                                                                                                  • Figure 26: U.S. volume sales of flavored malt beverages, 2005-10
                                                                                              • Segment Performance—Imported Beer

                                                                                                • Key points
                                                                                                  • Total volume sales of imported beer
                                                                                                    • Figure 27: U.S. volume sales of imported beer, 2005-10
                                                                                                  • Imported beer—regular imported beer
                                                                                                    • Regular imports continue to dominate; face competition from craft
                                                                                                      • Total volume sales of regular imported beer
                                                                                                        • Figure 28: U.S. volume sales of regular imported beer, 2005-10
                                                                                                      • Imported beer—light imported beer
                                                                                                        • Light imports fail to sizzle despite strong obesity trends
                                                                                                          • Innovation in premium domestic light poses stiff competition for light imports
                                                                                                            • Total volume sales of light imported beer
                                                                                                              • Figure 29: U.S. volume sales of light imported beer, 2005-10
                                                                                                          • Retail Channels

                                                                                                            • Key points
                                                                                                              • Figure 30: U.S. sales of beer, by retail channel, 2008 and 2010
                                                                                                          • Retail Channels—On-premise

                                                                                                            • On-premise takes a hit during the recession; craft beer offers growth
                                                                                                              • Figure 31: Total U.S. on-premise volume sales of spirits, 2005-10
                                                                                                              • Figure 32: Total U.S. on-premise* dollar sales of beer, at current prices, 2005-10
                                                                                                          • Retail Channels—Off-premise

                                                                                                            • Key points
                                                                                                              • Figure 33: Total U.S. off-premise volume sales of spirits, 2005-10
                                                                                                              • Figure 34: Total U.S. off-premise dollar sales of beer, at current prices, 2005-10
                                                                                                          • Retail Channels—Convenience Stores

                                                                                                            • Convenience stores face growing competition from drug stores
                                                                                                              • Craft brews offer growth opportunities
                                                                                                                • Figure 35: U.S. sales of beer at convenience stores, 2005-10
                                                                                                            • Retail Channels—Liquor/Packaged Stores

                                                                                                              • Organize events to educate/inform consumers; especially about craft brews
                                                                                                                • Website communication
                                                                                                                  • Figure 36: U.S. liquor/packaged stores dollar sales of beer, 2005-10
                                                                                                              • Retail Channels—Supermarkets

                                                                                                                • Craft brews selection and promotion can fuel growth
                                                                                                                  • Figure 37: U.S. sales of beer at supermarkets, 2005-10
                                                                                                              • Companies and Brands

                                                                                                                • Key points
                                                                                                                  • AB InBev commands nearly half of total volume; needs a craft in portfolio
                                                                                                                    • MillerCoors grows market share despite weakness in flagship brands
                                                                                                                      • Pabst Brewing Company set to receive new life
                                                                                                                        • Heineken buys FEMSA
                                                                                                                          • Crown Imports loses market share as many Mexican brands decline
                                                                                                                            • Figure 38: U.S. beer sales of leading companies, by volume, 2008 and 2009
                                                                                                                        • Brand Share—Domestic Light Beer

                                                                                                                          • Key points
                                                                                                                            • Top three brands post flat-to-declining sales
                                                                                                                              • Super-premium light brands suffer from trading down
                                                                                                                                • Value brands shine—take share from premium and super-premium brands
                                                                                                                                  • Ultra-light brands—MGD 64 and Select 55—show promising growth
                                                                                                                                    • Bud Light Lime posts strong growth despite the cut in ad dollars
                                                                                                                                      • Manufacturer and brand shares
                                                                                                                                        • Figure 39: U.S. brand sales by volume of domestic light beer, part 1, 2008 and 2009
                                                                                                                                        • Figure 40: U.S. brand sales by volume of domestic light beer, part 2, 2008 and 2009
                                                                                                                                    • Brand Share—Premium Beer

                                                                                                                                      • Key points
                                                                                                                                        • Budweiser continues the downward slide
                                                                                                                                          • Miller Genuine Draft—dismal performance
                                                                                                                                            • Land Shark, Budweiser American Ale, and Coors Extra Gold post growth
                                                                                                                                              • Manufacturer and brand shares
                                                                                                                                                • Figure 41: U.S. brand sales of premium beer, by volume, 2008 and 2009
                                                                                                                                            • Brand Share—Popular Beer

                                                                                                                                              • Key points
                                                                                                                                                • MillerCoors’ popular portfolio turns in mixed performance
                                                                                                                                                  • AB InBev’s Busch gains
                                                                                                                                                    • Pabst Blue Ribbon and Schlitz exhibit stellar growth
                                                                                                                                                      • Manufacturer and brand shares
                                                                                                                                                        • Figure 42: U.S. brand sales of popular beer, by volume, 2008 and 2009
                                                                                                                                                    • Brand Share—Super-premium and Craft Beer

                                                                                                                                                      • Key points
                                                                                                                                                        • Blue Moon continues to shine
                                                                                                                                                          • Yuengling maintains impressive growth
                                                                                                                                                            • Michelob faces stiff competition from craft
                                                                                                                                                              • Boston Beer and Sierra Nevada exhibit mixed performance
                                                                                                                                                                • “Other” craft brands exhibit impressive growth
                                                                                                                                                                  • Manufacturer and brand shares
                                                                                                                                                                    • Figure 43: U.S. brand sales of super-premium and craft beer, by volume, part 1, 2008 and 2009
                                                                                                                                                                    • Figure 44: U.S. brand sales of super-premium and craft beer, by volume, part 2, 2008 and 2009
                                                                                                                                                                • Brand Share—Ice Beer

                                                                                                                                                                  • Key points
                                                                                                                                                                    • Natural Ice and Bud Ice score big points
                                                                                                                                                                      • Keystone Ice continues its growth streak
                                                                                                                                                                        • Manufacturer and brand shares
                                                                                                                                                                          • Figure 45: U.S. brand sales of ice beer, by volume, 2008 and 2009
                                                                                                                                                                      • Brand Share—Malt Liquor

                                                                                                                                                                        • Key points
                                                                                                                                                                          • Steel Reserve—the leading brand declines
                                                                                                                                                                            • Most top brands do not get advertising budget
                                                                                                                                                                              • Manufacturer and brand shares
                                                                                                                                                                                • Figure 46: U.S. brand sales of malt liquor, by volume, 2008 and 2009
                                                                                                                                                                            • Brand Share—Flavored Malt Beverages

                                                                                                                                                                              • Key points
                                                                                                                                                                                • Diageo, MillerCoors, and AB InBev lose market share
                                                                                                                                                                                  • Mike’s Hard beverage shows impressive growth amid innovation
                                                                                                                                                                                    • Manufacturer and brand shares
                                                                                                                                                                                      • Figure 47: U.S. brand sales of flavored malt beverages, by volume, 2008 and 2009
                                                                                                                                                                                  • Brand Share—Regular Imported Beer

                                                                                                                                                                                    • Key points
                                                                                                                                                                                      • Dos Equis is the star brand of 2009; brand outpaces all imports
                                                                                                                                                                                        • Figure 48: Dos Equis TV ad, The Most Interesting Man in the World, 2010
                                                                                                                                                                                      • Corona Extra and Heineken continue the downward slide
                                                                                                                                                                                        • Modelo Especial shows impressive gain
                                                                                                                                                                                          • Manufacturer and brand shares
                                                                                                                                                                                            • Figure 49: U.S. brand sales of regular imported beer, by volume, part 1, 2008 and 2009
                                                                                                                                                                                            • Figure 50: U.S. brand sales of regular imported beer, by volume, part 2, 2008 and 2009
                                                                                                                                                                                        • Brand Share—Light Imported Beer

                                                                                                                                                                                          • Key points
                                                                                                                                                                                            • Tecate Light and Corona Light show gains
                                                                                                                                                                                              • Manufacturer and brand shares
                                                                                                                                                                                                • Figure 51: U.S. brand sales of light imported beer, by volume, 2008 and 2009
                                                                                                                                                                                            • Brand Qualities

                                                                                                                                                                                              • Blue Moon—a journey toward becoming the most popular craft beer
                                                                                                                                                                                                • Figure 52: Blue Moon TV ad, artfully crafted, 2010
                                                                                                                                                                                            • Innovation and Innovators

                                                                                                                                                                                              • Environmentally friendly packaging and seasonal brews top claims in 2010
                                                                                                                                                                                                • Figure 53: Claims in new beer products, 2010*
                                                                                                                                                                                              • Environmentally friendly packaging and brewing practices
                                                                                                                                                                                                • Seasonal and limited edition brews gain traction in new product launches
                                                                                                                                                                                                  • All-natural and no-preservative claims resonate with current health trends
                                                                                                                                                                                                    • Organic beer claims remain stable in 2010
                                                                                                                                                                                                    • Marketing Strategies

                                                                                                                                                                                                      • Choice of diverse media for brewers
                                                                                                                                                                                                        • Beer advertising budget remains stable
                                                                                                                                                                                                          • Figure 54: Total beverage alcohol advertising spending, 2008-09
                                                                                                                                                                                                        • Domestic brewers attempt to shore up declining light brands
                                                                                                                                                                                                          • Figure 55: Advertising expenditure on domestic beer, by brewer and brand, part 1, 2008 and 2009
                                                                                                                                                                                                          • Figure 56: Advertising expenditure on domestic beer, by brewer and brand, part 2, 2008 and 2009
                                                                                                                                                                                                        • Bud Light and Budweiser
                                                                                                                                                                                                          • Bud Light replaces MillerCoors’ brands as the NFL sponsor
                                                                                                                                                                                                            • Bud Light Port Paradise cruise sweepstakes
                                                                                                                                                                                                              • Bud Light offers good time
                                                                                                                                                                                                                • Figure 57: Bud Light TV ad, Swat team, 2010
                                                                                                                                                                                                              • Budweiser ads focus on young males and drinkability
                                                                                                                                                                                                                • Figure 58: Budweiser TV ad, Budweiser used as a currency, 2010
                                                                                                                                                                                                              • MGD 64
                                                                                                                                                                                                                • MGD 64 takes on Michelob Ultra
                                                                                                                                                                                                                  • Figure 59: MGD 64 TV ad, MGD 64 has less calories in comparison to Michelob Ultra, 2010
                                                                                                                                                                                                                • MGD 64 on Facebook
                                                                                                                                                                                                                  • Heineken’s advertising budget remains stable; Crown Imports’ down
                                                                                                                                                                                                                    • Figure 60: Advertising expenditure on imported beer, by brewer and brand, part 1, 2008 and 2009
                                                                                                                                                                                                                    • Figure 61: Advertising expenditure on imported beer, by brewer and brand, part 2, 2008 and 2009
                                                                                                                                                                                                                  • Heineken takes a humorous turn in TV ad
                                                                                                                                                                                                                    • Figure 62: Heineken TV ad, the guy ponders on hitting on bosses’ daughter, 2010
                                                                                                                                                                                                                  • Corona Extra continues with the beach fun
                                                                                                                                                                                                                    • Figure 63: Corona Extra TV ad, happy hour, 2010
                                                                                                                                                                                                                • Appendix—Trade Associations

                                                                                                                                                                                                                  Companies Covered

                                                                                                                                                                                                                  • Anheuser-Busch Companies Inc
                                                                                                                                                                                                                  • Bacardi U.S.A. Inc.
                                                                                                                                                                                                                  • Beer Institute (The)
                                                                                                                                                                                                                  • Boulevard Brewing Co.
                                                                                                                                                                                                                  • Brewers’ Association of America (BAA)
                                                                                                                                                                                                                  • Centers for Disease Control and Prevention
                                                                                                                                                                                                                  • D.G. Yuengling & Son, Inc.
                                                                                                                                                                                                                  • Diageo North America
                                                                                                                                                                                                                  • E.&J. Gallo Winery
                                                                                                                                                                                                                  • Facebook, Inc.
                                                                                                                                                                                                                  • Federal Trade Commission
                                                                                                                                                                                                                  • Food and Drug Administration
                                                                                                                                                                                                                  • Heineken USA Inc.
                                                                                                                                                                                                                  • Kantar Media
                                                                                                                                                                                                                  • Kirin Brewery of America
                                                                                                                                                                                                                  • Los Angeles Times
                                                                                                                                                                                                                  • Miller Brewing Company (USA)
                                                                                                                                                                                                                  • MillerCoors LLC
                                                                                                                                                                                                                  • Molson Coors (USA)
                                                                                                                                                                                                                  • National Basketball Association
                                                                                                                                                                                                                  • National Beer Wholesalers’ Association (NBWA)
                                                                                                                                                                                                                  • National Football League Inc.
                                                                                                                                                                                                                  • Organic Trade Association
                                                                                                                                                                                                                  • Pabst Brewing Company
                                                                                                                                                                                                                  • Pyramid Breweries Inc.
                                                                                                                                                                                                                  • Red Bull North America, Inc.
                                                                                                                                                                                                                  • Redhook Ale Brewery Inc.
                                                                                                                                                                                                                  • Seagram
                                                                                                                                                                                                                  • Sierra Nevada Brewing Company
                                                                                                                                                                                                                  • The Boston Beer Company Inc.
                                                                                                                                                                                                                  • The Conference Board
                                                                                                                                                                                                                  • Tsingtao Brewery
                                                                                                                                                                                                                  • Twitter, Inc.
                                                                                                                                                                                                                  • U.S. Bureau of Labor Statistics
                                                                                                                                                                                                                  • U.S. Bureau of the Census
                                                                                                                                                                                                                  • U.S. Department of Agriculture
                                                                                                                                                                                                                  • US Department of Commerce
                                                                                                                                                                                                                  • Walgreen Co
                                                                                                                                                                                                                  • Walmart Stores (USA)
                                                                                                                                                                                                                  • Widmer Brothers Brewing Company
                                                                                                                                                                                                                  • Wychwood Brewery Co. Ltd.
                                                                                                                                                                                                                  • YouTube, Inc.

                                                                                                                                                                                                                  Beer: The Market - US - December 2010

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