Bud Ale: “A New Style of Ale.”

“Distinctly American.”

Budweiser American Ale, due for release in October, will be billed as “a new style of ale.”

That’s the language used on the label, based on filings with the federal government.

The predominantly red label -- which includes an image of the Anheuser-Busch eagle, the A-B compass and hops – bears this legend: “Budweiser American Ale defines a new style of ale – The American Ale – created by Anheuser-Busch brewmasters to deliver robust ale taste that’s full-bodied, but not too heavy nor too bitter.”

The neck ringer further plays up the “American” angle: “Budweiser American Ale. An ale that’s distinctly American in character. Savor the difference.”

InBev European Imports Up 17 Percent

Led by Stella Artois.

The United States was a bright spot for InBev during a rough first quarter.

European imports, led by Stella Artois, grew by 17 percent during the quarter, InBev reported. That strong performance drove a 2.9 percent increase in volume for North America.

(Canada, where InBev markets Labatt, represents two-thirds of its North American volume and grew by 1.6 percent).

Anheuser-Busch started handling InBev’s European brands last year. Recall that imports helped minimize A-B’s decline in sales-to-retailers during the first quarter and drove the increase in shipments.

Worldwide, Stella Artois volume grew by 7.2 percent, thanks to higher volumes in the United Kingdom, the United States and Argentina. Beck’s grew by 0.7 percent worldwide.

InBev’s earnings fell by a greater-than-expected 11 percent during the first quarter amid rising costs and soft performance in Brazil.

Here’s InBev’s earnings release.

Here’s the Wall Street Journal’s coverage of InBev’s earnings.

Here’s Brew Blog’s coverage of A-B’s earnings.

Beer Marketer's Insights (subscription required) has more on InBev's earnings.

Brew News

Brew Blog’s picks of news stories from the beer business and beyond.

Supermarket beer volume fell 0.4 percent during the four weeks ended April 26, according to beer sales statistics from Nielsen. Miller volume share fell 0.5 points while dollar share fell 0.3 points. Anheuser-Busch volume share declined 0.1 points and dollar share dropped 0.4 points. Coors volume and dollar share both increased by 0.8 points. Imports gained 0.1 points of volume share but dollar share slipped by 0.2 points. Craft volume share was up 0.3 points and dollar share was up 0.7 points.

The entry price for a Super Bowl commercial will be $3 million next year, the Wall Street Journal reports. But longtime buyers won’t necessarily have to pay that much. From the story: “Anheuser-Busch, for example, has locked in a rate of about $2 million for each of its spots, according to a person familiar with the matter.”

The St. Louis Post-Dispatch explores the potential impact of an economic slowdown on the beer business.

Brew News

Brew Blog’s picks of stories from the beer business and beyond.

A new report from Deutsche Bank is more sunny about Heineken USA’s prospects than one mentioned yesterday from UBS. While noting currency issues and problems with Amstel Light, the report listed five reasons Heineken’s prospects remain strong: distributors and retailers want to grow imports; consumer trends favor the growth of imports; the Femsa portfolio is doing well and helps with Hispanic and African-American consumers; Heineken Premium Light appears poised for continued growth; and the addition of Newcastle Brown Ale (thanks to Heineken NV and Carlsberg’s partitioning of Scottish & Newcastle) should give a lift.

Jones Soda Co. posted a bigger-than-expected first quarter loss. Commenting in a report, Stifel Nicolaus analyst Mark Astrachan said: “And while the company has committed to a number of initiatives to improve performance, we believe results are indicative of weak end demand. ... We maintain our Hold rating on the share despite our cautious outlook. We do so because we believe the company has a viable product lineup that may still resonate with consumers given improved marketplace execution and product support programs.” The report can be seen here.

The Wall Street Journal reports that Coca-Cola Co. and PepsiCo Inc. bottlers are experimenting with different bottle sizes – including pint and 24-ounce bottles – as alternatives to the 20-ounce bottle.

Consumer spending barely budged in March. From the New York Times.

Brew News

Brew Blog's picks of stories from the beer business and beyond.

Starbucks saw a 28 percent drop in profits during the first quarter as same-store sales slid, Ad Age reports. "While we are not going to use the economy as an excuse, it is important to keep in mind that our second-quarter results do reflect the sharp weakening U.S. consumer environment," said CEO Howard Schultz. "Like most other retailers and restaurants, we are experiencing a downturn in customer traffic demonstrated in reduced frequency of customer visits that we believe tie to a real reduction in consumers' discretionary spending habits." On tap: An array of non-coffee beverages.

Beer Marketer’s Insights Express (subscription required), detects a trend of Anheuser-Busch branch distributors buying independent distributors. “Owning all or part of a distrib is increasingly AB's preferred option. This looks more and more like strategic shift. It's almost as if while AB's distribs become increasingly non-exclusive, AB simultaneously seeks more control of its system thru increased ownership.”

Beer Business Daily (subscription required) notes that a recent report from UBS says Heineken USA faces “many challenges.” From BBD: “UBS says that Heineken USA faces many challenges, including the growth of crafts and big brewers interesting in getting into the high priced beer segment. UBS says that if HUSA doesn't address brand Heineken's brand image, “it could end up being perceived as stale or merely mainstream, which would result in consumers being less willing to pay an 48% premium to the mainstream beer category. The Heineken brand’s market share in the US has not improved significantly since 2001, when it first broke the 2% share mark.’”

Corona Preparing for May 5 Showdown

New advertising, promotions on tap.

Coming off its first down year in more than a decade and facing a new challenger from Anheuser-Busch, Corona Extra is gearing up for a critical Cinco de Mayo holiday.

Brandweek has the details about Crown Imports’ efforts behind the brand, which include a new Cinco de Mayo TV commercial as well as radio support, countdown calendars in bars and nightclubs and “themed online invitation templates on Evite.com.”

Corona is facing challenges as it heads into the holiday season. From Brandweek:

Corona Extra shipments declined 0.8% last year after growing steadily since 1991, per Beer Marketer's Insights, West Nyack, N.Y. The slump continued into the first quarter where case sales—in supermarkets, c-stores and drug stores—declined 5.9% for the 52-weeks ended Feb. 23, compared to the year-ago period, per Nielsen. However, Corona Light's case volume increased 3.2%, while imported beer sales overall slipped 0.8%. Measured media spending in the U.S. last year was $60 million for Corona Extra and $9 million for Corona Light (excluding online), per Nielsen Monitor-Plus.

Corona faces fresh competition this Cinco de Mayo as A-B prepares to roll out Bud Light Lime. Again, from Brandweek:

Corona Challenges Continue

Can’t top soft comp in supermarkets.

Corona Extra continues to face challenges in supermarkets.

Corona lost 0.3 points of share during the four weeks ended March 15, according to beer sales statistics from Nielsen.

That’s despite a fairly soft comp -- flat -- from one year ago. And despite weighted average prices being up just 1.6 percent.

Overall, weighted average beer prices were up 2.6 percent during the period.

Heineken, meanwhile, posted flat share performance. The average weighted case price was up 0.5 points.

Is Corona Getting Aggressive on Price?

Not getting volume lift.

Corona Extra’s sales decline last year – the first in 16 years – has been blamed in large part on big price increases.

But Corona is continuing to struggle even as it’s showing signs of aggressive pricing in supermarkets.

Corona’s volume share in supermarkets slipped by 0.2 points during the four weeks ended March 8, according to beer market analysis from Nielsen.

Relatively higher prices aren’t the issue, according to Nielsen’s beer sales statistics. The average weighted case price for Corona was up only 1.6 percent during the period.

Changing of the Guard in Imports?

Is a “generational change” taking place?

Are Corona Extra and Heineken now “my father’s beer?”

That’s the provocative question raised by industry consultant Mike Mazzoni last week in an investor meeting covered by Beer Marketer’s Insights. From Friday’s BMI Express:

[Mazzoni] Notes imports up 1%, Corona down slightly, Heineken up slightly, while Heineken Premium Light, Stella, Modelo Especial, Corona Light and Dos Equis each up double digits. Wonders if this is "simply a changing of the guard." Calls Corona and Heineken (over 45% of segment) "mega-imports" and wonders if this is "generational change" where they have become "my father's beer." Notes that many other formerly top 10 imports continued down in 07, including Beck's, Foster's, St Pauli Girl, Amstel Light.

Brew Blog would not be surprised if Corona and Heineken wind up posting stronger numbers this year, given last year’s relatively soft performance was at least partly driven by price increases.

That said, there are plenty of signs that a new generation of imports is emerging. The latest issue of Brew Magazine looked at some of these rising brands, including Modelo Especial, Tecate, Dos Equis, Stella Artois and Peroni Nastro Azzurro.

To subscribe to the print version of Brew, please shoot an email with your name and mailing address here.

From the issue:

Imports Increase Presence in Supermarkets

Distribution driving volume gains for some items.

The latest issue of Brew Magazine explores the growing importance of imports in the beer industry -- and explains why they’re going to be more important.

Indeed, recent beer market analysis by Nielsen shows that imports are literally taking up more space in supermarkets’ beer aisles.

The average U.S. supermarket stocks 47 import items, two more import items than it did just 10 months ago.

This is happening despite recent pricing-related softness with imports. The reason: The image of imports as being high end lines up nicely with many retailers who wish to present an upscale image.

The top 20 growth import items over the last 13 weeks all have used distribution to build their volume gains. Three of the top five items are from Heineken. The top growth item: Heineken’s draught keg.

Not surprisingly, Heineken’s case share has increased by 2.2 points during the 13 weeks ended February 23.

The latest issue of Brew can be seen here. If you'd like a free subscription to the print version of Brew, please drop a line with your name and mailing address here.

Why Do People Drink Imports?

A matter of personal taste and occasion.

Imports have grown to become an important part of the beer business.

Which begs the question: Why are people buying them?

Given that literally hundreds of imports are available, no single answer exists to that question.

Miller Brewing Company recently conducted research to understand why people pick up the imports they choose. The latest issue of Brew Magazine takes a look.

If you would like to receive a free subscription to the magazine, drop a line with your name and mailing address here.

From the issue:

For some people it’s a matter of sophistication.

For others it’s a question of discernment and picking out the best.

And for a lot of people, it’s a matter of picking up something special for a big occasion – from parties to vacations.

Corona and Heineken’s Balancing Act

Juggling cachet and ubiquity.

Corona Extra and Heineken are far and away the biggest imports.

They’re so big, in fact, that the increasingly act like mainstream beers. They have big ad budgets, they have light extensions and they’re coming out with bigger pack sizes.

Both brands still command a premium. But observers say balancing “specialness” and their mass appeal presents a challenge…even if it’s an enviable one. And it’s a challenge that’s going to continue now that a new generation of upstart imports, such as Dos Equis and Stella Artois, are on the rise.

The latest issue of Brew magazine explored Corona and Heineken’s challenges. If you would like to receive a free subscription to Brew Magazine, drop a line with your name and mailing address here.

From the issue:

How big can Corona Extra and Heineken get before they lose their specialness?

A decade ago, the brands had mystique. They were widely known, to be sure. But they weren’t available in every store. They weren’t seen much on TV. They played in a distinctly different space from the mainstream domestic beers.

That’s less true now. They’re well-established in the Top 10 beer brands – Corona at No. 6 and Heineken at No. 9. They’ve upped their ad budgets significantly. They’re both aggressively marketing light extensions. They’re coming out with bigger pack sizes.

And they’ve increased their presence in convenience stores. Corona and Heineken had 4.5 percent share in C-stores in 2007, up from 3.8 percent in 2005, according to Nielsen.

“They are just about mainstream brands,” says Peter V.K. Reid, editor of beer industry trade magazine Modern Brewery Age. “These brands are within the brand set of a pretty huge percentage of consumers.”

Going Mainstream?

Imports are a big part of the U.S. beer business -- and they’re going to get bigger.

As recently as 2004, full-calorie mainstream domestic beers commanded more share in supermarkets than imports.

That’s not the case now.

Imports in 2007 represented more than 14 percent of supermarket beer sales, according to beer sales statistics from Nielsen. Mainstream full-cal domestics, meanwhile, accounted for just over 11 percent.

That stat highlights how imports are an increasingly important part of the U.S. beer business. And that trend is only going to continue.

The latest issue of Brew took an in-depth look at how imports have transformed -- and will continue to transform -- the U.S. beer business.

From the issue:

Heineken: No U.S. Price Increase

Reports strong results for Femsa.

Heineken NV doesn’t plan to raise prices in the U.S. in 2008 following last year’s increase of 3.5 percent.

That’s according to remarks by Heineken chief financial officer Rene Hooft Graafland on Wednesday while discussing the company’s 2007 performance.

“Seeing that the domestic brands are not following that, we have not planned a price increase in the USA for 2008," Graafland said.

Rumors of InBev-A-B Deal Surface – Again

A-B declines comment.

The Wall Street Journal on Friday reported that the long-rumored combination of InBev and Anheuser-Busch is once again on the table.

From the story:

“InBev and Anheuser already have held discussions, say people in the industry familiar with both brewers' thinking. Although reports of the talks surfaced as long as a year ago, they have become more serious, and a deal is possible this year, people in the industry say.”

The report came on the heels of A-B reporting fourth quarter earnings that missed Wall Street estimates. Equity income from A-B’s stake in Grupo Modelo, which long has buoyed A-B’s profits, declined during the quarter.

Scottish & Newcastle Agrees to Sale

Heineken would pick up U.S. operation.

After months of drama, Heineken NV and Carlsberg A/S are poised to take over Scottish & Newcastle.

Scottish & Newcastle, the brewer of Newcastle Brown Ale, McEwan’s and Strongbow cider, has agreed to a $15.3 all-cash offer, the companies announced Friday.

As noted by Conde Naste’s Portfolio, that price is 10 percent higher than Heineken and Carlsberg’s earlier – rebuffed – offer last fall.

Assuming the deal goes through, Heineken would take over S&N’s operations in the United States and the Americas and in other markets including the United Kingdom and India.

Carlsberg, meanwhile, would gain control of Baltic Beverages Holding and S&N’s French, Greek and Chinese operations.

Corona Extra Mainstream?

“The strategic direction on Corona worries us,” analyst writes.

Will the launch of Corona Extra 12-pack cans undermine the image of the No. 1 import?

That’s the question raised in Tuesday report by Bear Stearns analyst Justin Hott.

Commenting on recent reports that Grupo Modelo would not be taking pricing on Corona, Hott writes:

“However, we are less enthusiastic about the launch of Corona into 12-pack cans, a format that does little to build brand equity. … This move by Modelo may help short term volumes, but we doubt it helps the status of the brand.” 

Constellation Cuts Outlook

Acquisition costs a factor.

Constellation Brands -- which markets brands including Svedka vodka and Robert Mondavi wines and owns a stake in Corona Extra’s importer -- on Tuesday cut its earnings outlook for its fiscal 2008.

Constellation cut its outlook to $1.06 to $1.11 per share. Previously it had forecast earnings of $1.16 to $1.24 per share.

The reduction was largely driven by costs related to its recent acquisition of Fortune Brands Inc.’s wine business.

Constellation reported third quarter earnings of 55 cents per share, in line with Wall Street estimates.

Beer Marketer’s Insights focuses on the performance of Crown Imports, the U.S. marketer of Corona and other Grupo Modelo brands (Crown has a stake in Crown). While sales-to-retailers were up low single digits, third quarter revenues slipped and fourth quarter comps were described as “difficult.”

A-B Core Brand Sales Fall

Imports drive growth.

Imports kept Anheuser-Busch growing in 2007.

Anheuser-Busch’s sales to retailers grew by 1.3 percent during the year, A-B reported on Monday. But backing out imports -- particularly the InBev European brands -- A-B’s STRs slid by 0.3 percent.

A-B’s shipments increased by 2 percent during the year, but that was largely driven by imports. A-B’s core brand shipments increased by 0.3 percent.

"Anheuser-Busch achieved increased shipments in 2007 due to the success of our initiatives to broaden the company’s beer portfolio, including the addition of InBev European brands,” A-B CEO August Busch IV said in a press release.

Noted Beer Marketer’s Insights Express:

"Including exports, looks like AB shipments edged over 105 mil bbls. Take out Euro brands tho, and AB volume basically the same in 07 as it was in 03."

The A-B press release can be seen here.

The BMI home page is here.

Miller CEO Cites Price Leadership

Miller also looking for new craft opportunities, Long tells BBD.

Miller Brewing Company led beer industry pricing in 2007 as it worked to transform its portfolio, Miller CEO Tom Long told Beer Business Daily in a wide-ranging interview.

Long told BBD in an interview Thursday that “the idea of transforming our portfolio has brought such a big swing in our economics.” Citing Nielsen supermarket data for the year 2007 through December 8, Long said:

"Miller Brewing average pricing was up 4%, including Chill, A-B was up 1.9%, and Coors was up 2.5%. When you take Chill out of the equation, Miller [Brewing] is still up 2.8%. So even without Chill, we are still leading pricing and mix up."

The Jacob Leinenkugel Brewing Company, which is owned by Miller, played a role in Miller’s improved performance in the higher end of the beer business. And while Leinie’s will remain Miller’s man craft play, Long said Miller is keeping its eyes open for other opportunities.

Heineken Splits with Ad Agency

Hires Wieden & Kennedy.

Heineken USA last week dismissed its lead ad agency.

Heineken USA confirmed to Adweek that it had dismissed Berlin Cameron United. Berlin had handled Heineken Premium Light since its launch. It added duties for Heineken only nine months ago.

The parting of ways follows the departure earlier this year of Heineken CEO Andy Thomas.

Heineken USA has moved the brands to Wieden & Kennedy, which previously worked for Miller Brewing Company on Miller High Life and other brands.

Adweek says the account represents about $100 million in media spending.

Ad Age notes that the switch comes amid slowing sales trends:

"But the shift comes as Heineken has seen its sales growth slow amid its effort to raise prices this year."

Big Thanksgiving for Crafts

Imports regress.

Craft brewers had plenty to be grateful for this past Thanksgiving.

Craft beers gained 0.9 points of volume share in supermarkets for week ended November 24, according to beer sales statistics by Nielsen. They also gained 1.4 dollar share points.

Sam Adams and Coors Brewing Company’s Blue Moon led the way during the holiday, gaining a combined 0.4 volume share points.

The Jacob Leinenkugel Brewing Company (owned by Miller Brewing Company) gained 0.1 points of case and dollar share.

Seasonals -- largely driven by Sam Adams and Blue Moon brands -- also were a big factor in craft growth, according to Nielsen’s beer market analysis.

Fully 87 percent of all measured markets recorded craft beer volume gains.

SABMiller to Acquire Grolsch

Deal valued at $1.2 billion.

SABMiller plc today announced it has entered into an agreement to acquire the nearly 400-year old Dutch brewer Royal Grolsch NV.

The deal is valued at $1.2 billion.

SABMiller sees opportunities to develop the brand in a number of regions around the globe. From the release:

"SABMiller sees significant potential across Africa and Latin America, where the premium segment is still in its infancy, and in the more developed markets of Central and Eastern Europe. South Africa represents a key opportunity and with the addition of Grolsch, SABMiller will have a particularly strong portfolio of highly differentiated premium brands in that market."

No changes to existing distribution arrangements in Australia, Canada, the United Kingdom or the United States are anticipated at this time. Anheuser-Busch last year acquired distribution rights for Grolsch in the U.S.

In a conference call following the announcement, however, SABMiller Chief Financial Officer Malcolm Wyman said SABMiller "would seek to enter into discussions with [A-B] after the deal is closed."

A-B this morning sent a memo to distributors about the deal. Beer Business Daily characterized the memo as saying it was "business as usual."

InBev’s U.S. Shipments Dip

Big brewer has tough quarter.

InBev’s European brands – which include Stella Artois, Beck’s and Bass – showed a decline in shipments to the U.S. during the third quarter, the world’s biggest brewer by volume reported on Thursday.

InBev, which struck an importing and marketing alliance last year with Anheuser-Busch, in an earnings release said:

"Although shipments of our European import brands into the US to Anheuser-Busch (“A-B”) were lower during the third quarter, depletions, while still slightly negative yoy, improved compared to the previous two quarters, led by Stella Artois."

Speaking of its overall North American performance (InBev owns Canada’s Labatt), InBev said:

"Tight cost management in North America helped drive margins higher in a challenging environment."

InBev shares slid 10 percent as the company failed to meet analysts’ estimates. InBev fell victim to general industry weakness in western Europe, as Stella Artois and Beck’s posted lackluster results in the UK and Germany, respectively.

An analyst said the weak showing could hurt InBev’s ability to potentially do a deal with Anheuser-Busch, the subject of much speculation in recent months.

From a story in Bloomberg:

``This set of results does not help the possible negotiating position of InBev,'' given Anheuser's stronger recent results, Gerard Rijk, an analyst at ING Wholesale Banking, said in a note today. He said he's likely to lower his forecasts.

The InBev release can be seen here.

Bloomberg's coverage can be seen here.

Trader Joe’s Pushing into Mexican Beers

Receives label approvals for “Trader Jose” brands.

In another sign of the growing trend of Latinization, Trader Joe’s appears to be pushing into private label Mexican beers.

Over the course of the year, Trader Joe’s has filed label applications for “Trader Jose” branded beers.

Last month it received a label certificate from the Treasury Department's Alcohol and Tobacco Tax and Trade Bureau for Trader Jose Dark Premium Lager. Earlier in the year it received approvals for Trader Jose Premium lager.

For years Trader Joe’s has marketed a variety of private label beers, including a hefeweizen, Bohemian and Vienna lagers, bocks and Oktoberfests. Beers for the eastern half of the United States are brewed by Chicago’s Goose Island Brewing Company; the west is handled by Gordon Biersch Brewing Company in California.

The Trader Jose beers are made in Mexico.

Trader Joe’s move makes sense given the growing popularity of Mexican beers. Corona Extra was the country’s sixth biggest beer in 2006 and other leading Mexican imports, including Modelo Especial and the Femsa brands, are posting robust growth.

The leading domestic brewers are trying to capitalize on this trend as well. Miller Brewing Company launched Miller Chill, a chelada style beer, in recognition of the Latinization trend. And Anheuser-Busch is preparing a national rollout of its chelada product.

The label application for Trader Jose Dark Premium Lager can be seen here.

A label image can be seen here

.

Heineken Trying to Regain “Specialness”

Changes in advertising looming.

Heineken USA executives told distributors they plan to take steps to ensure Heineken keeps its cachet, according to coverage of the importer's sales meeting last week.

While Heineken has posted good numbers -- sales were up 6.6 percent last year and up 3 percent in the first half of this year, according to Beer Business Daily -- the importer is seeking a marketing fix to burnish the brand’s image.

Andy Glaser, the brand’s marketing chief, told distrbutors at a meeting last week that “balancing Heineken’s mass appeal with its prestige can be difficult, and perhaps Heineken was leaning too far toward mass appeal, and a 'loss of saliency' with consumers has resulted. 'We must refocus on Heineken’s specialness,'"according to a report in Beer Business Daily.

Said Beer Marketer’s Insights:

“…with Heineken brand at "inflection point" in US, co has 'reappraised' and is moving to new campaign, brand mktg chief Andy Glaser announced. HUSA made final 'it's all about the beer' spot for holidays 2007. Moving on to new campaign around presenting brand as 'world class' (beyond 1st class) and Heineken as the 'inspired choice.'"

It appears Heineken USA is trying to address a phenomenon Brew Magazine has identified as the mainstreaming of the two leading imports, Corona Extra and Heineken.

From the December 2006 issue of Brew:

"Indeed, the brands (Corona and Heineken) are so large that they increasingly resemble mainstream beers, which trade on image instead of traditional import hallmarks such as quality or heritage. Signs of this mainstreaming include their expanded presence in convenience stores; their growing TV advertising and sports sponsorships; and large pack sizes. And – bowing to U.S. consumer tastes – both Corona and Heineken are offering light brand extensions.

"The behavior of Corona and Heineken shouldn’t be surprising: Critical mass leads to mainstream behavior. The key question for these two brands is what happens on pricing. As the brands’ volume numbers get bigger, increasing price gets tougher. So they need to strike the optimal balance between volume growth and price increases relative to mainstream beer. That’s how they generate the optimal profit."

New advertising from agency Berlin Cameron United (tapped earlier this year after a lengthy review) is coming early next year, the reports said. Work will highlight the “brand’s prestige and worldliness,” BBD said. The creative also will play off of brand iconography such as the logo, star and bottle.

(It will be interesting to see what direction this work takes. Recall that in the mid-1990s Heineken tried to turn the red star into an icon.)

(Another question: One has to wonder if the future direction of Heineken was an area where former Heineken CEO and the company did “not share exactly the same perspectives on the business,” as Thomas said in the release last month announcing he was leaving the company.)

The Beer Marketer's Insights home page can be seen here.

The Beer Business Daily home page can be seen here.

The December 2006 issue of Brew Magazine can be seen here.

Coverage of management changes at Heineken USA can be seen here.

Corona Volume Hurting On Higher Prices

Recovery on the horizon?

Constellation Brands said on Thursday that volume was likely down by low single digits in the latest quarter for its Crown Imports unit, which handles Corona Extra and other Modelo Group brands.

The decline follows significant price increases.

Beer Business Daily and Beer Marketer’s Insights both weighed in on the news.

From BBD, which calls Crown an “example in patience”:

What strikes me about Rob's comments are that Constellation doesn’t seem too concerned over Corona’s volume softness after the price increase. Why? Says Rob: “There is a pattern to this in the beer business, as to how the volume leans after you take a price increase, and how it gradually comes back over time as retailers and consumers adjust to it.”

From Beer Marketer’s Insights:

Modelo brands, "continue to experience" some "short-term retraction" in IRI data because of price increases, acknowledged Constellation ceo Robert Sands in conference call. Though hesitant to provide much detail on beer volumes, he said with prices up "around mid-single digits," volume "was probably down low-single digits," for qtr. Price increase was the "right long-term decision" for Modelo brands, he added.

The Constellation release can be seen here.

The BBD home page is here.

The BMI home page is here.

No Bud-Budvar Deal?

Czech PM dismisses speculation.

The Czech Republic’s prime minister threw cold water on speculation that Anheuser-Busch will acquire its longstanding trademark foe, Budejovicky Budvar.

Prime Minister Mirek Topolanek said that in an address to the country’s Chamber of Deputies.

From the Prague Daily Monitor:

He also dismissed speculations that his adviser Marek Dalik is in talks with US brewing giant Anheuser-Busch on the privatisation. Budvar and Anheuser-Busch lead a number of trademark lawsuits.

Topolanek also said a tender will be issued for the transformation of state-owned Budvar in October. The transformation of the brewer into “a joint stock company would take about 12-18 months,” the story said.

Rumors have been rife that the government has been in talks with A-B about selling Budvar. The two brewers have been locked in trademark disputes around the world over the use of the name “Budweiser.”

By buying Budvar, A-B could put an end to expensive litigation.

A-B imports the Budvar brand in the U.S. under the name Czechvar.

The Prague Daily Monitor story can be seen here.

Previous Brew Blog coverage on the rumored deal can be seen here.

Miller Chill Third-Fastest Growing Beer in C-Stores This Summer

Miller High Life is No. 4.

Miller Chill was the third-fastest growing beer in convenience stores this summer, according to beer sales statistics from Nielsen.

For the 16 weeks ended September 8, Miller Chill racked up 0.3 volume share, according to Nielsen. It scored 0.4 dollar share.

Miller High Life, meanwhile, was the fourth-fastest growing brand, ranked by incremental case volume. During the 16 week period its case volume picked up 9 percent over the year-earlier period.

Five other Miller brands made the top 25 list in C-stores this summer: Steel Reserve (No. 8), Olde English (No. 11), Sparks Plus (No. 14), Miller Lite (No. 21) and Icehouse (No. 24).

Coors Light was the fastest growing beer in C-stores, with its volume up 5.3 percent. Other Coors brands on the top 25 were Keystone Light (No. 5) and Blue Moon (No. 19).

Anheuser-Busch had 10 brands on the top 25 list: Natural Ice (No. 6), Bud Light (No. 9), Bud Light & Clamato (No. 10), Hurricane High Gravity (No. 13), Bud Ice (No. 15), Michelob Ultra (No. 16), Budweiser & Clamato (No. 17), Tilt (No. 18), Bacardi Silver (No. 23) and Landshark (No. 25).

Three Mexican imports cracked the top 25: Modelo Especial (No. 7), Tecate (No. 12) and Dos Equis (No. 22).

Pabst Blue Ribbon came in at No. 20.

Smirnoff Ice came in at No. 2. However, that was driven by the use of previously used UPCs and the renaming of some products to fall into the Smirnoff Ice umbrella.

Miller Chill Fastest Growing Beer of the Summer

Miller Lite also cracks top 10 list.

Miller Chill was the fastest-growing beer of the summer in supermarkets, according to beer sales statistics from Nielsen.

Miller Chill, which was launched in test markets in February and launched nationally over the course of the summer, moved 896,968 cases in supermarkets during the 13 weeks ended September 8, according to Nielsen.

That amount exceeds the incremental gain of No. 2 Smirnoff Ice by more than 100,000 cases (though there are caveats to Smirnoff Ice’s ranking; see below). Miller Chill’s volume exceeded Bud Light’s incremental gain by more than 370,000 cases, according to Nielsen.

Miller Lite was the 10th fastest growing brand of the summer, in order of incremental volume increase. Its case volume was up 0.9 percent.

Anheuser-Busch had three brands in the top 10: Bud Light at No. 3, Michelob Ultra at No. 4 and Bacardi Silver at No. 9.

Coors Brewing Company also had three brands in the top 10: Coors Light at No. 5, Keystone Light at No. 6, and Blue Moon Belgian White Ale at No. 8.

Femsa’s Tecate was the only import to crack the top 10 list. It came in seventh.

The second-fastest growing brand of the summer was Smirnoff Ice, but that was driven in part by re-issued UPCs and the renaming of some existing products.

Heineken USA Shakeup

CEO Andy Thomas resigns.

Andy Thomas, the CEO of Heineken USA who oversaw the recent launch of Heineken Premium Light, is leaving the company effective October 5, the brewer disclosed today.

He will be replaced by Don Blaustein, Heineken USA’s senior vice president of sales.

Massimo von Wunster, regional president of Heineken Americas said in a release:

"Andy's decision was clearly not easy, but we both agree it is the right one. Over 12 years with Heineken, Andy has made a valuable contribution in each of his roles. In his most recent two years with Heineken USA, his leadership of the Heineken Premium Light launch and the negotiation of the ten-year agreement with FEMSA are important milestones for the business. He leaves Heineken USA performing strongly and with a great platform for future growth."

Thomas commented in the release:

"This decision has been difficult for me. However, it has gradually become apparent that the company and I do not share exactly the same perspectives on the business. We have therefore mutually and amicably concluded that this is the best way forward. I know that Heineken USA will continue to enjoy success and I look forward to starting a new stage in my career."

The release quoted Blaustein:

"It will be a genuine privilege to lead the Heineken USA organisation. We have a great team, strong plans and the right strategy. When you combine this with the strength of our brand portfolio and our positive partnership with FEMSA, I believe we are well on the way to unlocking the true potential of our business. I look forward to continuing to build on the Heineken USA success story."

From a March 2005 Modern Brewery Age story about Blaustein joining Heineken USA:

"We are extremely pleased and proud to welcome Don to Heineken USA," said Frans van der Minne, Heineken USA President. "His extensive industry experience and extraordinary track record, both in sales and management, convinced us that he is the one to lead our sales team as we continue to grow Heineken USA."Mr Blaustein said of his new job, "I have always admired the Heineken portfolio and Heineken's ability to protect the integrity of its flagship brand, while consistently growing its business." At Molson, Mr. Blaustein expanded the export presence of Molson's portfolio, including launches in the U.K., Australia and New Zealand. Mr. Blaustein spent 16 years at Diageo/Guinness. He held a number of posts including: managing director of Guinness Australasia; president, Guinness Caribbean & Latin America; president, Guinness Canada; and v.p., sales & marketing. He started his career in the beverage industry at Kraft. He is married to noted art historian Roni Feinstein, and has two children."

The release can be seen here.

Miller, Coors Boost Dollar Share During Labor Day

A-B share slides on weak Bud Light showing.

Miller Brewing Company and Coors Brewing Company both managed to gain dollar share in supermarkets during a two-week Labor Day holiday period that showed solid volume and pricing, according to beer sales statistics from Nielsen.

Anheuser-Busch lost more than a point of dollar share as Bud Light slipped, according to Nielsen.

Overall, the category performed well during the two-week period ended September 8. Volume during the period was up 1.9 percent and weighted average prices were up 4.9 percent, according to Nielsen.

Miller’s dollar share increased by 0.3 points during the period, according to Nielsen. That was driven by the rollout of Miller Chill -- which achieved 1 percent dollar share -- and a 0.2 point gain by the Leinenkugel’s franchise.

While Miller’s dollar share increased, case share dipped by 0.1 points. Miller Lite’s case share slipped by 0.2 points but its average weighted case pricing -- up 4 percent -- was the strongest of the leading domestic lights.

Coors, meanwhile, increased dollar share by 0.5 points during the period. Coors Light and Blue Moon each increased share by 0.2 points. Keystone Light increased share by 0.1 points.

Coors’ case share increased by 0.7 points. That was driven primarily by Coors Light, up 0.3 points.

A-B’s dollar share slid by 1.4 points, according to Nielsen. The Bud franchise slid by 1.4 points, with Budweiser down 0.8 points, Bud Light down 0.4 points, and Bud Select down 0.3 points.

The brewer’s case share slid by a full point, according to Nielsen.

Craft beer continued its run, with case share up 0.8 points and dollar share up by 1.1 points.

Imports showed renewed strength, with case share up 0.5 points and dollar share up 0.6 points.

Is Coors Preparing an Import?

Files label application for new brew Maclachlan’s.

Is Coors Brewing Company preparing an import as part of its announced push into higher-end brands?

Coors European Properties GmbH, a related company, earlier this summer filed a trademark application with the U.S. Patent and Trademark Office for a beer called Maclachlan’s.

That brew was launched this past May in Scotland by Coors’ sibling Carling. It’s a dark beer that goes head to head with the likes of John Smith’s.

The trademark application was submitted under a filing basis that means “the applicant declares it has a bona fide intention to use or use through the applicant’s related company or licensee the mark in commerce or in connection with the identified goods and/or services.”

Just because a company files a trademark application doesn’t mean it will launch a new product. But an import such as Maclachlan’s would fit in with Coors’ recently announced high-end beer incubation group. The goal of that group is to introduce new brews through a slow build -- similar to the approach used to grow Blue Moon.

Apart from the Molson brands, Coors currently doesn’t market a true import in the U.S. Its Killian’s Irish Red is brewed in the U.S.

Coverage from the newspaper the Scotsman about Maclachlan’s can be seen here.

The trademark application can be seen here.

Previous Brew Blog coverage about Coors’ high end incubation unit can be seen here.

HPL Won’t Hit Goals

Heineken says it was a “little too bullish.”

Heineken Premium Light will miss its ambitious volume targets and won’t turn a profit in 2007, Heineken NV said today.

The disclosure came as Heineken reported earnings for the first half of the year.

From the Financial Times:

"One blemish on the performance was Heineken premium light, a low calorie and low carbohydrate beer, that will not turn a profit in 2007 in the US, where it was launched last year.

"While volumes rose 30 per cent in the first half, Heineken admitted it had been 'a little too bullish' in setting a goal of selling 1m hectolitres, blaming the weather and higher prices."

Heineken has said previously it’s spending about $70 million marketing HPL this year, up from $55 million last year.

Heineken also said the HPL launch has hurt sales of Amstel Light, which has seen a 10 percent slide in sales. It is now working to revitalize the brand.

The Financial Times story can be seen here.

Heineken’s earnings release can be seen here.

Craft Beer Grows, Imports Fall on Rising Prices

Inverse relationship?

Rising prices appear to be hurting sales of imported beers in supermarkets.

But higher prices can’t slow down sales of craft beer.

What’s going on?

Imported beers suffered their worst share performance in at least three years in supermarkets during the four weeks ended July 28, according to beer sale statistics from Nielsen.

Import share slid by half a point during the period, according to Nielsen. The losses are directly attributable to No. 1 import Corona Extra -- which has an average weighted case price 5.9 percent higher than in 2006.

Crafts, meanwhile, gained seven-tenths of a point of share during the period, according to beer market analysis by Nielsen. This is despite prices being 4.1 percent higher than a year ago.

Why the difference?

Jim Koch, the chairman of Boston Beer, offered a possible explanation during comments about the Sam Adams brewer’s strong second-quarter performance.

From Beer Business Daily:

Jim also points out that imports and crafts have been through several 10 year inverse relationship cycles. Remember when imports (Corona mainly) crashed in 1987, which coincided with the birth of the craft renaissance which ran through 1998, then softened as imports again took off until 2006. Today imports are soft and crafts are on fire. Obviously, it has a lot to do about pricing, but Jim says he’s “cautiously optimistic that we have growth ahead of us, but not sure if it will be double digits.”

To see Boston Beer’s earnings release, go here.

To see Beer Business Daily, go here (subscription required).

A Tale of Two Mexican Imports

Corona, Tecate going in different directions.

Corona Extra is absorbing the impact of a pricing increase that affected some markets nine months ago.

Tecate’s national average weighted case price in supermarkets is below last year’s level, according to Nielsen.

Guess which beer is growing in supers?

Tecate, with an average weighted case price 1 percent below last year’s level, gained two-tenths of a point of case share in supermarkets for the four-week period ended July 7, according to beer sales statistics from Nielsen. Volume-wise, that’s an increase of 21.5 percent, or 92,000 cases.

Tecate -- which sells at a much lower price point than Corona and targets a different consumer -- drove three-tenths of a point share increase for Heineken USA. The company's three leading Dutch beers (Heineken, Heineken Light and Amstel Light) all had flat case share performance.

Corona, as reported earlier this week in Brew Blog, saw its case share drop by three tenths of a point during the four-week period, according to Nielsen.

Corona’s average weighted case price was up 5.8 percent compared to the year-earlier period, according to Nielsen.

Corona has hit sales bumps after previous price increases and always recovered.

Analyst Scales Back Heineken USA Forecast

Downgrades volume estimates.

Citing a widening price gap for imported vs. domestic beers and weak supermarket sales trends, an analyst is lowering her 2007 volume forecast for Heineken USA.

Writing on July 5, UBS Investment Research analyst Melissa Earlam lowered the volume growth estimate for brand Heineken to 1.8 percent from 3.0 percent.

Heineken Premium Light’s growth forecast, meanwhile, was lowered to 12 percent from 15 percent. She notes that her volume estimate of 1.2 million hectoliters (just more than 1 million barrels) is above “company guidance of ‘over one million.’”

“Heineken reported 5% growth for Heineken USA excluding FEMSA for the first four months of the year,” she wrote. “We believe that this has potentially slowed in May and June.”

She cites a number of reasons. HPL faces tough comps as it goes against its launch numbers. Import growth has slowed in supermarkets. She also says “we believe pricing in the import category has had some impact on volumes as the price gap between domestics and imports has widened.”

UBS upped its volume growth assumptions for the Mexican Femsa brands, which include Tecate. Femsa brands are now forecast to grow by 13 percent compared to the previous assumption of 8 percent.

Overall, volume for Heineken USA is forecast to grow by 8.2 percent vs. a previous estimate of 8.7 percent.

Corona Slide in Supers Continues

Will it take action this summer?

Every price increase by Corona Extra in recent memory has been greeted by consumer push back … followed, of course, by the brand setting new sales records.

There’s no reason to believe that trend won’t continue in wake of the price increase that went into effect last year.

That said, Corona Extra has continued losing share in supermarkets well into the summer, according to beer sales statistics from Nielsen.

For the four week period ended June 23, the brand lost a tenth of a point of case share and two-tenths of a point of dollar share. For the 13-week period ended June 23, it lost two tenths of a point of case and dollar share.

The Corona franchise, which includes Corona Light, saw volume in supermarkets slip by 2 percent during the four-week period, according to Nielsen.

So will Corona begin to promotional “spend back” some of its price increase to recapture lost volume? If so, when?

Can Innovation Drive Heineken?

Mini Keg gaining distribution.

Heineken, which has been struggling lately in supermarkets following a price increase, seems to be getting a boost from increased distribution of the 5-liter Heineken keg can.

Increased distribution of the can was a key reason that Heineken’s share held steady during the four weeks ended June 16, according to beer sales statistics from Nielsen.

The popularity of the can underscores the importance of innovation, the focus of the latest issue of Brew Magazine. Packaging innovation can get retailers and sales forces excited and pique consumer interest.

Near-flat pricing appears to be another factor in Heineken's performance. Both Heineken and Heineken Premium Light have been getting an increase in feature support for six pack cans and 18 packs of bottles.

Heineken’s share in supermarkets was flat for the latest four-week period, according to Nielsen. Heineken Premium Light, meanwhile, lost a tenth of a point of share.

To see the latest issue of Brew, click here (PDF).

To receive a free subscription to Brew Magazine, drop a line with your name and mailing address here.

Miller to Brew Foster’s in U.S.

Cost savings to go to marketing and sales support.

Foster’s Group Limited and Miller Brewing Company today announced an agreement under which Miller will start brewing Foster’s Lager and Special Bitter for sale in the United States.

Currently, the Foster’s beers sold in the United States are made in Canada by Molson Coors Brewing Company. In November that production will shift to Miller's breweries in Ft. Worth, Texas, and Albany, Ga.

The move to domestic brewing will reduce freight time and expense. The savings will go toward marketing and sales support.

“The decision to shift Foster’s brewing to Miller builds a foundation for more robust growth in the United States,” says Scott Weiss, managing director of Foster’s Amricas.

Says Tom Long, president and CEO of Miller: “Today’s announcement is a critical step as we partner with Foster’s Group to position this brand as an appealing trade-up for mainstream beer drinkers who want a truly unique beer experience. Foster’s has great growth potential and we’re excited about the opportunity to maximize Foster’s growth in the U.S.”

The new brewing deal is a 10-year agreement.

Interestingly, August Busch IV touched on the topic of brewing foreign brands in the U.S. during a recent presentation to analysts.

From Beer Business Daily’s coverage of Busch’s remarks:

"August put forth the possibility of brewing imported beer brands at their breweries here in the U.S. (like they are currently doing, successfully, with Kirin, brewed in Los Angeles). August thinks it can be done. 'With the possible exception of Mexican and Canadian brands, I think imports could be brewed and made here in the US, just like Mercedes is made here. … .Question is, will the consumer buy into that proposition…… In ‘92 or ‘93 you never would have thought that those import cars would be made here.'"

The BBD coverage of Busch's remarks can be seen here (subscription required).

InBev Attacks Penn. Franchise Law

Seeks to overturn restrictions on out-of-state suppliers.

As reported by Beer Marketer’s Insights, InBev is challenging a Pennsylvania law that it contends treats out-of-state and local brewers differently in their relationships with distributors.

Pennsylvania law says out-of-state suppliers must have good cause to terminate arrangements with distributors and can’t unilaterally move brands. In-state brewers are exempted from these and other provisions.

Invoking the Supreme Court’s Granholm decision, as well as the Costco ruling in Washington state, InBev is arguing these laws are unconstitutionally discriminatory.

As reported by Beer Marketer’s Insights, the action springs from a legal dispute between a Pennsylvania distributor and InBev. InBev terminated the distributor in October 2006; A-B became a part of the suit after picking up the InBev brands.

This action comes in the wake of legal efforts by A-B to pick up distribution of InBev brands in other states. Brew Magazine explored this topic -- and the implication of brand shifts for distributors -- in April with a story called “OutBev." The story looked at A-B’s efforts to shift as much as 75 percent of InBev volume within a year.

To see the April issue of Brew Magazine, click here.

Beer Marketer's Insights' home page is here.

Will HPL Slim Cans Mean Big Sales?

Heineken spending big to avoid sophomore slump for light brew.

Heineken USA this week breaks TV advertising touting the new 12-ounce slim can for Heineken Premium Light, according to a report in Brandweek.

From the story:

"The 12-oz. HPL can … is a key ingredient in the Dutch brewer’s mission to sell 270,000 more barrels of th low-calorie brew this year. HPL sold more than 570,000 barrels in 2006, the year it was introduced."

The ads from agency Berlin Cameron United will feature HPL cans in settings such as beaches and pools. Keeping with the use of hip music in previous HPL ads, the new ads feature the song “Can I Have It Like That” by Gwen Stefani and Pharrell Williams.

As reported previously, Heineken USA plans to spend $70 million marketing HPL this year.

HPL has seen sales in supermarkets slow recently, according to beer sales statistics from Nielsen. During the four weeks ended June 9, the brand lost a tenth of a point of case share in the channel. Volume declined by 12.1 percent.

The lead Heineken brand lost a tenth of a point of share in the same period and saw volume decline by 2.9 percent.

The Brandweek story can be seen here.

Previous Brew Blog coverage of HPL can be seen here.

The February issue of Brew Magazine explored how importers are making a run at the light beer category, the biggest grower in the American beer business. A PDF of that issue can be seen here.

Can Sapporo Break Out of Sushi Bars?

Brand tries to tap into hip-hop crowd, report says.

Advertising Age today writes that the marketers of Sapporo beer are trying to break out of sushi bars and position the brand as a new hip-hop icon.

From the story:

"Through a series of nightclub and fashion events in major markets, the brand is partnering with top urban designers such as Zero Halliburton, Jungle Gurl and New Era to transform its trademark oversized steel can into a status symbol."

Can this makeover work? As the story notes, about 70 percent of the brand's 2.4 million cases are sold on premise, with 80 percent of that at Asian-themed restaurants.

But executives note that sushi restaurants in major cities are “morphing into trendy nightspots.”

Ad Age quotes one exec as saying that last year, when Sapporo started its hip-hop push, it gained distribution and sales increased by 15 percent.

See the Ad Age story here (subscription required).

Crafts Charge, Imports Hit a Wall in Supers

Import trends flatten while crafts surge.

Last year the big story in supermarket beer sales was the growth of imports, driven in large part by the launch of Heineken Premium Light.

Now imports are flagging while crafts have taken the lead.

Crafts picked up sixth-tenths of a point of case share in supermarkets during the four weeks ended May 5, according to beer sales statistics from Nielsen. Crafts have been gaining share for more than three years.

Boston Beer, the brewer of Samuel Adams and the biggest craft brewer, saw share grow by a tenth of a point during the latest period, according to Nielsen.

Import share, meanwhile, was flat during the period, according to Nielsen.

The group was dragged down by negative trends by the two biggest imports, Corona Extra and Heineken. Corona lost three-tenths of a share point during the period; Heineken.

Heineken Premium Light, which drove imports’ share growth last year, was flat.

Tecate, a Mexican import that’s priced near mainstream levels, gained two tenths of a point of share. Tecate is brewed by Femsa and marketed by Heineken USA.

Looking ahead, imports face some softer year-over-year comparisons in the coming weeks. But it won’t be until October before imports cycle against share gains of less than a full point.

Corona Advertising Goes High Tech

Departure from long-running campaign.

Corona Extra’s advertising has long stood out from the pack.

While the big domestic brewers emphasized partying or special effects, for more than a decade Corona showed people doing little more than sitting by the ocean and looking at the waves. The work fit in perfectly with Corona’s positioning as the beer for sun, beach and fun.

Now it appears Corona -- which has been acting more like a mainstream beer is it has gained scale over the years – will depart from that formula in a 60-second ad running this Sunday during the season finale of “Survivor: Fiji.”

Chicago Sun-Times advertising columnist Lewis Lazare wrote about the ad, called “Finishing Touch,” on Thursday:

"Without any tipoff, "Finishing Touch" plunges us into the middle of a massive underwater volcanic eruption. A lot happens very quickly, with waves crashing all around and boulders being hurled hither and yon. What look to be palm tree trunks spring suddenly out of the ground, and plant tendrils sprout and curl.

"… As a final palm tree or two take their comforting form after all this sturm and drang, we wind up where we have so often before in Corona commercials -- gazing on an idyllic beach where two people whose faces we never see are sitting in beach chairs surveying the serene scene and enjoying Coronas."

It will be interesting to see if this is a one-shot effort or a sign of things to come from the No. 1 import.

The Sun Times story is here.

New Ad Agency for Amstel Light

Former Corona Extra agency takes brand, report says.

Heineken USA has tapped the Richards Group as the new ad agency for the struggling Amstel Light brand, according to a report in Adweek.

The Richards Group has plenty of beer experience, having worked on the Corona Extra account for years for former importer Gambrinus Co.

Richards’ job now is to help turn around Amstel Light. The beer’s shipments dropped nearly 9 percent to 649,000 barrels in 2006, according to figures from Beer Marketer’s Insights. A possible factor in that decline was the launch of Heineken Premium Light, which shipped 579,000 barrels after being on the market for less than a year.

Amstel Light previously was handled by Publicis.

Heineken USA earlier this year moved the Heineken account from Publicis to Berlin Cameron United, which handled the launch of Heineken Premium Light. To read Brew Blog coverage of that review, go here.

The Adweek story can be seen here.

Imports Lose Momentum in Supermarkets

Heineken Premium Light lapping comps.

Imported beers are showing signs of slowing down in supermarkets, according to beer sales statistics from Nielsen.

Import share trends have been weakening since early March when Heineken Premium Light began cycling against its year-earlier launch numbers.

For the four weeks ended April 21, imports gained a mere tenth of a point of case share in supermarkets, according to Nielsen.

Indeed, the two leading imports showed a decline in case share during the period. Corona Extra, apparently still suffering from the effect of last year’s price increase, lost three tenths of a point of case and dollar share in the four-week period, according to Nielsen.

Heineken lost a tenth of a point of case and dollar share, according to Nielsen.

Tecate gained two tenths of a point of case share, as did Heineken Premium Light.

The weakening performance in supermarkets raises a big question going into Memorial Day: Will Crown Imports, which handles Corona, and Heineken USA engage in aggressive pricing activity? Such a move almost inevitably would have an impact on the support retailers give to mainstream light beers.

Femsa Sees Beer Sales Soften in Mexico

Weaker demand, cool, rainy weather took toll in first quarter.

Mexican beverage company Femsa suffered from slowing demand for beer in Mexico during the quarter ended March 31.

Femsa -- its full name is Fomento Economico Mexicano SA -- said its beer sales volume in Mexico grew at a 2.6 percent rate. The slowness reflects softer demand, cool temperatures and rainy weather in northern Mexico, the company said in a release.

Demand improved as the quarter progressed, said the company, which brews Tecate and Dos Equis.

The company said it had "limited ability to take price" during the first quarter. Grupo Modelo, the country's biggest brewer, kept pricing flat during the period.

But Femsa execs said that the company should be able to raise prices now that Modelo (in which Anheuser-Busch has a 50 percent equity stake) has started to move with increases, Bloomberg reported.

Export sales volume increased at a 5.8 percent rate due to growing demand for Tecate and Dos Equis in the U.S. and for Sol in the United Kingdom.

The beer unit’s operating income is expected to be “in line” with 2006 performance, the company said.

Overall, Femsa’s first quarter net income fell by 12 percent as it was hit by high aluminum prices and increased marketing costs.

In a release, José Antonio Fernández, Chairman and CEO of FEMSA said:

“FEMSA delivered mixed results in a very tough first quarter. Most notable was the weakness at the beer division due to a softer demand environment in Mexico, a seasonal increase in marketing expenses in Brazil, and increased raw material pressure, as expected. Additionally, negative weather trends and a weak pricing environment further complicated matters. While we are not pleased with the first quarter results, we are as confident as ever that we are executing on the right strategy to maximize value creation over the long-term."

To see Femsa's earnings release, click here.

To see the Bloomberg story, click here.