Category Archives: Sales & Profits

Coors Light has had a rough year, but not as bad as Bud Light

Dave blog 2

By Greg Trotter
http://www.chicagotribune.com/business/ct-biz-miller-coors-light-beer-decline-20171026-story.html

Coors Light, the second-best-selling beer in the U.S., is having a rough year.

The amount of Coors Light sold in stores in recent months has declined at a faster rate than even its slide of recent years, according to scan data and industry experts. The good news for Chicago-based MillerCoors? At least for now, Bud Light, the top-selling beer in the country made by competitor Anheuser-Busch InBev, is in even steeper decline.

Premium light beer, as it’s called in the industry, peaked in 2007 and 2008. Since then, many American drinkers have turned toward craft beer and Mexican imports; others have drifted into wine and spirits.

Make no mistake: MillerCoors and Anheuser-Busch InBev still sell an enormous amount of light beer in the U.S., just not as much as they once did. Combined, the two beer giants — which sell the vast majority of light beer in the U.S. — are down about 26 million barrels in shipments to wholesalers since 2008, according to figures provided by Beer Marketer’s Insights, an industry trade publication.

“They’re getting hit from all over. They’re really taking a lashing,” said Vince Trunzo, co-owner of Affiliated Marketing, a managing company of about 350 liquor stores in the Chicago area, including Armanetti, Miska’s and Cardinal stores.

Trunzo estimated that sales of premium light beer have been down about 4 to 5 percent a year in his stores. Meanwhile, sales of wine, spirits and craft beer have increased. Customers who used to buy a 24-pack of Coors Light are now getting a 12-pack — along with a sixer of craft beer, Trunzo said.

Trunzo said he’s not devoting any less shelf space to MillerCoors products just because the light beer is in decline.

“MillerCoors has been a good partner for many years. We’re not going to kill ’em because they’re going through a little struggle,” Trunzo said.

MillerCoors executives declined to comment during the quiet period leading up to parent company Molson Coors’ Wednesday earnings release.

But in a recent post on the company blog, MillerCoors noted that Coors Light case volume was down 3.4 percent year-to-date through Sept. 30, according to Nielsen data, compared with Bud Light, which was down 5.7 percent over the same period. Chief Marketing Officer David Kroll called it a “challenging year” for Coors Light in the blog post but said he expected next year to be better because of improved marketing and packaging.

To help offset such sales declines, Anheuser-Busch and MillerCoors have both acquired craft breweries and introduced new brands in recent years. MillerCoors plans to roll out Two Hats, a fruity light beer aimed at millennials, and Arnold Palmer Spiked Half and Half early next year. MillerCoors also recently struck a 10-year deal to import and market Sol, the company’s first Mexican import beer.

There are obvious success stories in MillerCoors’ vast portfolio: Blue Moon keeps rising despite an overabundance of craft competitors. Leinenkugel had one of its best summers ever. Coors Banquet continues to grow. Hamm’s is going great as the hipster beer of the moment.

Still, it’s unclear at this point how MillerCoors will reach its publicly stated goal of revenue growth by 2019 if its two top-selling beers continue their slow descent.

Together, Miller Lite and Coors Light represent about 57 percent of the company’s business, said Eric Shepard, executive editor of Beer Marketer’s Insights.

“The numbers are the numbers. They’re going to have a very, very difficult time making up that volume,” Shepard said.

The future for light beer doesn’t look much brighter in bars and restaurants than it does in stores. On-premises sales of domestic light beer are projected to decrease another 1.2 percent this year, following five straight years of decline, according to data from Beverage Marketing Corp.

One exception to the domestic light beer fizzle: Michelob Ultra Light, owned by Anheuser-Busch, has been quietly blowing up, growing sales by double-digit percentages.

“To some degree, growth of one is coming at the expense of the other. It’s hard to grow two struggling brands in a shrinking category,” David Henkes, senior principal at Technomic, a Chicago-based market research firm, said of Miller Lite and Coors Light.

At Nisei Lounge, a beloved Wrigleyville dive bar, Miller Lite remains the top-beer, said Nisei Lounge beer buyer Pat Odon.

But what’s selling most on draft reflects how times and tastes have changed.

“Consumers at this specific bar have no interest in macro beers on draft, except Miller High Life,” Odon said. “On draft, people want IPA, IPA, IPA.”

Advertisements

Leave a comment

Filed under Alcohol, Beer, Craft Beer, Revenue, Sales & Profits, Uncategorized

Global restaurant scene leaves U.S. market in the dust

left-behind_1509634835http://www.restaurantbusinessonline.com/consumer-trends/global-restaurant-scene-leaves-us-market-dust

By Peter Romeo on Nov. 02, 2017

Although overseas expansion rates have slowed, the global foodservice market is still growing at a clip that makes the U.S. piece of the business look like a minivan chasing a Maserati, according to a just-released snapshot.

Overall, global sales are increasing at an annual pace of 5.6%, compared with the U.S. rate of 3.4%, according to the study, conducted by Technomic for The Coca-Cola Co. and presented at the Global Restaurant Leadership Conference this week.  The figures are nominal and not adjusted for inflation.

The researcher pegged the current size of the international foodservice market—U.S. sales included—at $3 trillion, of which the American market contributes about $872 billion. Nearly two-thirds of that amount, or 60%, is generated by restaurants, with the remainder coming largely from so-called noncommercial facilities.

The figures verify that the U.S. remains the globe’s biggest restaurant market in terms of sales, outstripping China’s $624 billion in annual intake. But Technomic noted that China’s restaurant revenues are surging at the rate of 10.9% per year, the highest in the world by far.

It already sports more restaurants than any other nation, with nearly 9 million outlets.

Many of the trends driving U.S. sales are also boosting business abroad, according to the picture presented by Technomic. Delivery and takeout, for instance, are universal phenomena, noted Joe Pawlak, a managing principal of the research company. On a global basis, “dine-in visits are the minority,” he said.  The one exception to that new world order among the major markets tracked by Technomic is France, where dining in a restaurant is an entrenched part of the culture.

Similarly, from the North Pole to Antarctica, “the availability of healthy items is becoming as important as affordability and variety,” said co-presenter David Henkes, Technomic’s senior principal. Globally, 69% of consumers cited the availability of healthy options as being a very important factor in choosing where to buy a meal.

Henkes stressed that the sensitivity is now literally universal; in every market monitored by Technomic, more than half the consumers spoke of being profoundly influenced in their choice of restaurants by health considerations.

And that quest isn’t just for healthful food options, Henkes added. “Consumers are asking for better-for-you beverages, and what they’re asking for is changing,” he said.

Henkes explained that the definition of “healthy” continues to evolve.  “We asked consumers what healthy actually means,” he said. “The No. 1 attribute among the consumers that we surveyed was ‘natural.’ Forty-four percent of consumers say that is the leading way to define healthy.”

Another universal sales driver is snacking, Pawlak observed. “In all countries save two, over 70% of consumers snack daily,” he revealed.

The exceptions: China, where three-meal-a-day dining is still the dominant pattern, and France, where eating is regarded as a celebration best reserved for a full meal.

The Global Restaurant Leadership Conference drew some 1,233 restaurant leaders from around the world to Dubai for three days of discussions on tomorrow’s opportunities. The conference is presented by Winsight, the parent company of Technomic and Restaurant Business.

Leave a comment

Filed under Delivery, Global Foodservice, Health, Sales & Profits