After yesterday's sunny editorial about how higher priced beer and FMBs are carrying the day for the beer industry, my friend Jeff Nowicki at Bump Williams Consulting decided to put pen to paper and see just how pricing and consumer trade-up has added considerable value to the industry. If you look at Symphony IRI scanned off-premise volume and dollar trends -- and the difference between the two -- from January 2010 through August 5, 2012 -- the industry has lost 3.3 million cases, but gained $1.7 billion in revenue. By any measure, that's a pretty good trade.
But wait, there's more. So far in 2012, we've replaced almost the entire case volume losses from the past two years while continuing to build incremental revenue. Looking back to 2010, the year ended with a gap between the revenue trend and the volume trend of 2.2 points. In 2011 we see marginal improvement as the gap increased to 2.8 points. However, 2012 has seen a much larger increase with the gap currently at 3.7 percentage points, meaning the percent change in revenue is 3.7 points above the trend in volumes.
So what has changed in the past year to drive such a significant increase? The pricing of domestic premiums. That's right. Domestic premium pricing for the first time in over two years is actually stepping up now, up 2.2% YTD, says Jeff. We know that the growth of super premiums and crafts have provided a nice umbrella for premiums to grow pricing. Super premium volumes are up 31.6% and dollars are up 34.9% (for a big 3.3 gap), while import volumes are up 6.9% and dollars are up 8.2% dollars (for a 1.3 gap). Then add in craft volume growth of 12.6% and dollars up 17% (for a big 4.4 gap). All those segments ombined collectively represent a 32.3 dollar share of the category, which is an increase of 2.3 share points so far in 2012.
Jeff makes one last point: The sub-premium segment, the red-headed step child, is now seeing volumes down 1.9%, a much better trend than the past two years performances of being down 3.4%. But it's still holding price above the 3% range. Says Jeff: "The bottom line to all of this: Over the past two plus years, the category has improved pricing overall at 8.2%." With only nominal volume losses, that's a pretty strong performance.
KEVIN McADAMS JOINS PABST AS VICE PRESIDENT OF SALES
Pabst announced that Kevin McAdams has joined the company effective immediately as it's new vp of sales. Kevin was formerly with Red Bull North America as the Head of Distribution and In-‐Store Execution. Before that, he was VP of Sales and Delivery Operations for North America at Odwalla, Inc./ The Coca-‐Cola Company. He graduated from Iowa State University in 1993. Pabst says they've added 35 new people in the past few months.
A-B HAS extended its MLB sponsorship for Bud until 2018. More later...
EXTRA: CHECK OUT JIM KOCH on CBS This Morning. Greatest quote: "There's something wrong with you if you can't have fun making beer." http://www.cbsnews.com/video/watch/?id=7418836n&tag=strip
Until tomorrow, Harry
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