Light Beers Poised for A Big Year

Think the U.S. leads the world in beer consumption? Think again.

Though America has a larger population than beer-drinking countries like Germany or Britain, the winner in this year’s beer sales sweepstakes is a brew many Americans have probably never heard of: A Chinese beer named Snow.

“SAB-Miller was going to roll Snow beer into the U.S. a few years back, but it never actually came into this market,” said Tim Cote, vice president of marketing for Beaverton, Ore.-based Plaid Pantries Inc. “It probably still will, but Chinese imports have gotten some cooties over the past year.”  

Cote also noted that Snow’s growth has been so dramatic its producer may well be having supply problems because the product’s sales growth has been so terrific.

Some brands can be successful in one country and not another, observed Dan Roane, category manager of alcoholic beverages for Circle K’s southeastern stores. “Twenty years ago, the dry beers were the rage in Japan,” he said. “Anheuser Busch came out and pushed hard with Bud Dry, but had little success.”

Light Beer Rocks
Meanwhile, back in the states, light beer is the new king. “As the old Miller Light commercial says, light beer is less filling and has fewer calories,” Cote said. “Besides, for the most part, people who want full-bodied beer have traded ‘up the box’ to an import or craft beer.”

The outdated image of beer drinkers as blue-collar bubbas tossing back “brewskis” with both hands died when the advertising department at Miller came up with the brilliant idea of using professional athletes as light beer spokespeople, Cote said. And while light beer became fashionable decades ago, it really hasn’t shown major growth in the market until the last four or five years, when Coors Light and Bud Light drove the market upward.

A public relations campaign making it hip to drink light beers was one of the key transitions that made it possible for light beer to become as big as it has, starting with Miller’s “tastes great, less filling” campaign in the 1970s, according to analyst Benj Steinman, head of Beer Marketer’s Insights.

“In effect, those guys said, ‘It’s OK for real men to drink light beer,’’’ Steinman said. “Then Anheuser Busch added to that by positioning Bud Light as a ‘young, fun and social’ drink, and that social component was another important marketing piece.”

Light Beer Suits Today’s Lifestyle
Light beer makes a great “workout beer,” Cote said. “When you’re thirsty, light beer goes down easier than regular beer simply because the taste is a little bit diminished, so you can drink it faster when you’re warm. One of the upsides of light beer is that you can drink more of it before you begin to feel full or bloated.”

Indeed, the very things that make beer taste good also make it fattening, Roane pointed out. As evidence, Roane cited strong growth in microbrew sales as well as in the light beer category. “Microbrews are generally full-bodied, full-calorie beers, and we’re seeing growth there,” he said.

Roane thinks the difference between light beer drinkers and microbrew drinkers is that microbrew drinkers are more closely aligned to wine drinkers, who are generally not as brand loyal. “They’ll taste different varieties from different wineries—they’ll shop around,” he said. “Microbrew drinkers are the same way, but when you get into the premium business, you find that the Bud Light, Miller Light or Coors Light drinker will drink the same beer every day.”

For others, content does matter. “I think it’s really a matter of light beers being lower in calories and alcohol and less filling,” Steinman said. “If you want to drink more than one beer, it makes sense as a way to consume, even for young men.”

While Steinman said the growth of Bud Light has actually slowed a bit in recent years, it has nothing to do with the beer’s popularity or the light segment. “There’s much more competition now and (the brand) is just so big,” he said. “How much bigger can you get?”

Many brewers have tried to bring light beer out of the premium category, Cote said, so far without success. “You look at the above-premium buyer. Those customers expect to get a lot of labor for the money they spend.”

Looking at below-premium beers, there’s some Busch Light volume out there and a little bit of Keystone volume, but for the most part low-end beers are full-calorie brews. Looking up the box it’s full-calorie, too. The customer who wants full-flavored beer has left the middle segment of the box, Cote said.

The demographics of light-premium beer appear to be more female than they are in other segments of the beer market, Cote and Roane concur. “Beer is a male category, but when you break it down by segment, the number of women drinking light premium beer—Sam Adams Light and Heineken and Corona Light—is probably higher,” Cote said. “Craft beer is like a meal-high calorie and filling, not a gal beer.”

Expect Light to Continue Leading
Where it’s carried, light beer is going to continue grabbing market share, particularly in smaller packages, which feeds the idea that females are driving the light beer phenomenon, Cote observed. “In a six-pack of 16-ounce cans, traditional Bud outsells Bud Light. But in all my 12-ounce can formats, Bud Light outsells traditional Bud,” he said.

Cheap beer sales in his region are growing a bit, Roane noted, as customers respond to tougher economic times by switching to less expensive beer. “The below-premium segment is doing much better than it has in years,” he said. “We actually are seeing growth there now.”

Still, beer sales vary greatly by region and are greatly affected by promotions and marketing.  “Over 35% of my beer category is imported craft, extremely high for the c-store industry because we’ve positioned our sets to capture local markets and craft-beer drinkers,” Cote said. “We get very ‘neighborhoody’ with our beer assortment offering and 30 different beer sets in 99 stores.”

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