Budget Beers Growing

Published in CSP Daily News

Data shows 2.2% volume increase

SAN ANTONIO -- Budget-beer growth is accelerating in convenience stores, according to Harry Schuhmacher of Beer Business Daily, San Antonio. While the budget-beer category hasn't gained much, if any, share this year, its volume trends have certainly improved recently, while average case prices are down, according to IRI supermarket and c-store scans, Schuhmacher wrote.

More disconcertingly, budget-brand growth is accelerating in c-stores in particular, where demographics favor heavier beer drinking. While supermarket year-to-date budget-brand volumes [image-nocss] are down 1.5%, budget brands have grown 2.2% in c-stores, according to IRI scans to July 10.

This can be chalked up to several external factors, not the least of which are high fuel prices and heavier discounting on single serves. The 24-ounce can has been a very successful package in single-serve budget brands.

While much derided, the segment represents about a 25% of the business, a not insignificant percentage. Busch Light and Natural Light dominate in c-stores in the category, and have for a long time. A-B has always dominated in c-stores, as its high share allows for more frequent deliveries and service calls to the numerous low-volume, low-back-stock c-stores peppering the countryside.

One brand that is showing surprising growth in c-store scans is Milwaukee's Best Light, a historically poor-performing brand. Year-to-date scans show that Milwaukee's Best Light is up the most of the major subpremium brands, up 12% and gaining almost half a share point. When brands are up that much, Schuhmacher said he normally looks to pricing as the likely reason. But Milwaukee's Best Light hasn't been discounted any more than the others.

It may be the marketing. Miller has made this low-calorie line extension the flagship brand, and Milwaukee's Best Light is the brand sponsor of the World Series of Poker, which is hot. Miller has also more than doubled the marketing investment behind the Best franchise, with TV ads.

The only other budget brand to gain significant share this year in c-stores, (other than the Steel Reserve malt liquor franchise) is Keystone Light, which has always shown remarkable brand equity in supermarkets but is typically very weak in convenience stores. Coors has always suffered in c-stores compared to A-B and Miller. Share clearly offers a larger lever in c-stores than other channels.