The Year of the Sub-Premium 30 Pack Can

FILED DECEMBER 7, 2009

Dear Client:

For going on two decades now, there is one package in the beer industry that has carried the day. It is the work horse, the money maker, the grandaddy of all packages, the one package that has payed more salaries and financed more capacity and filled more route trucks than any other: the domestic premium 12 pack can. Since the early 1980s the 2/12 can has ruled the cold box.

Today, less so. It's premature to declare the death of the 12 pack can, but several trends over the past few years have put a dent in it. One is the rise in glass as a preference, giving 2/12 and 20 pack LN NRs a rise in prominence, even in c-stores. The other is the rise in 18 packs, the 24 pack suitcase "flats", and the 30 pack can.

As we begin to close the books on 2009, these trends have continued. Premium 2/12 cans were down another 3% this year in all-scan IRI sets. Interestingly, 18 packs were also down 3% (premium 18 pack cans increased the most in price in 2009). Both packages lost a half a share point in dollar market share. Premium 24 packs were up 7% while 30 pack cans were up 5%. Yes, together they gained half a share point. So there was a 0.5 share shift to larger can packages in premium beer, which isn't too surprising and is just a continuation of a trend that's been going on for several years.

What's different this year is that sub-premium 18 pack cans were up 30%, gaining half a share point in dollars. It shouldn't surprise you that sub-premium 18 pack can pricing was up the least of the major packages. In other words, if you believe there is trading down from premium to sub-premiums, it's strikingly apparent in 18 packs, where the price gap has widened the most.

But while sub-premium 18 pack cans have gained a half a share point, there's one package that has gained the most: the sub-premium 30 pack can, which gained a full share point this year, according to IRI. In fact, of all the segmented package types, sub-premium 30 pack cans gained the most share (premium 18 packs lost the most share).

Let's turn our attention to brand-packs. The biggest case share gainer for 2009 is -- drum roll please -- Natural Light 30 pack cans, gaining 0.4 share points in IRI food-drug-convenience scans (YTD to November 1). The second largest share gainer was Keystone Light 30 pack cans, up 0.3 points. Natty Light 30 packs were up 60 cents a case in price, while Key Light 30s were up a big 83 cents a case. The third largest gainer was Bud Light 24 pack cans. (The eighth largest gainer was our favorite, Bud Ice 24oz singles). In fact, of the top 20 fastest growing brand-packs, the only 12 packs to be found were both Yuengling and Bud Light Lime, both 2/12 glass. There were no 12 pack cans in the top 20 share gainers. One must look all the way down the ranking to the 22th fastest growing package to find a 2/12 can, and that was Modelo Especial, a newer package with a lower price.

Of the brand-packs that lost the most share in 2009, all of the top five were A-B products: Bud Light 12 pack NRs, Bud Light 20 pack NRs, Natty Light suitcases, Bud 18 pack cans, and Bud 12 pack cans. Next comes Corona 12 pack NRs.

So in summary, 2009 was the year consumers looked for value, and larger pack sizes delivered. This trend coincides with consumer shopping in larger format stores, which tend to offer larger pack sizes. It's not an ideal situation, but at least the industry is offering something, while in most other CPG categories the branded suppliers are getting squeezed out by private label store brands.

Until tomorrow, Harry

"Whoever is happy will make others happy too."
-Anne Frank

--------- Sell Day Calendar ----------
Today's Sell Day: 5
Sell days this month: 22
Sell days this month last year: 22
This month ends on a: Thur.
This month last year ended on a: Wed.
YTD sell days Over/Under: 0



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