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n e w s , n u m b e r s , c o m m e n t a r y , f o r e c a s t s
i n t e r v i e w s , b e s t p r a c t i c e s , s t r a t e g y , m o t i v e
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Home >> Sample Issue
**Sample Issue of Beer Business Daily**
Bud Light vs Coors Light vs Miller Lite
Filed November 18, 2003
Dear Client:
The three charts below tell an interesting story. They represent volume and pricing trends in food channels for the top three low cal brands, as scanned and syndicated by IRI.
As you can see, even slight changes in retail price cause volume spikes. As you can also see, for October, all three brands were promoted heavily and/or more value packs were sold (depressing mix and price), causing each brand to trend up.
But none trended up more than Miller Lite, with volume up almost 13%. Now, we can explain it away by talking about promotional 30 packs in Ohio until we’re blue in the face, but we spoke with several high-volume distributors from various parts of the country and most (though not all) said that their Miller Lite business was trending up in all channels, including on-premise.
In my experience, it’s hard to promote your way into positive on-premise trends. Typically, a positive on-premise trend indicates a broader consumer acceptance pattern.
However, I mitigate this analysis by pointing out that Lite had very easy comparisons with last year, while both Bud Light and Coors Light had tough comps. As such, I don’t expect Lite to continue double digit supermarket growth. As UBS analyst Caroline Levy pointed out in a note earlier this week, when you look two years back, Bud Light is still the share gain winner.
Anecdotally, distributors believe that Bud Light’s slowdown is more a function of Michelob Ultra’s share gains, while at least some of Coors Light’s lack of incremental growth may be attributed to Miller Lite’s rebound. Remember, the industry is not growing, and imports are growing again, so the volume has to come from domestics. Perhaps some of Lite’s gain is also coming from malternative fallout.
If that is true, it’s not great news for Miller/Coors combo houses, which are basically trading Coors Light and high margin Smirnoff Ice volume for Miller Lite volume. As one Miller/Coors/All Other distributor told me, “If we’re not taking share from A-B or Corona, we’re playing a shell game.” The only avenue of growth left is to induce retailers/consumers to trade up to their SPIM (specialty/import) brands.
LITE TREND LOOKS DIFFERENT. Honestly, a two and a half month spike does not a true trend make. Plus, their spike appears so large for the unhappy reason that their previous trends were so lousy…..it’s like Everest in the Everglades, while Bud Light’s trendlines are like Everest next to Kilimanjaro. But Lite’s volume spike truly is more than just a monthly blip. I believe that November IRI numbers will be very important in discerning a mountain from a molehill. Stay tuned.
PIPING ALL HANDS. I put forth the following important question to all BBD readers: Given what we now know about Costco's (and presumably other retailers') direct shipping desires, do you believe there will be some form of direct shipping in parts of the country by year end 2004?
Email your comments to hs@beernet.com, for publication in Friday’s issue (if you wish not to have attribution, let me know in the email).
Until tomorrow, Harry
MTD Sell Day: 14 ……. Sell Days This Month: 19 ……. Sell Days This Month Last Year: 20 YTD Over/Under Sell Days: 0 .. This Month Ends on a: Fri .. Last Year This Month Ended on a: Fri.
You can order the newsletter securely online by clicking here >> or give me a call directly at 210/805-8006 ext. 1#.
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