Dec 062016

modelo-especialWhen wholesalers only represented one brand such as AB, Schlitz, or Coors, brand owners were always under the gun to produce the results expected of them by their brewery.  As the years passed, however, wholesalers, fearing termination for any reason, ensured franchise legislation was passed making termination by their supplier difficult, if not impossible.

Consolidation, at both the brewery and the wholesale levels, has done more to ease the influence of any one supplier than could, in past years, be used to force a wholesaler to do something for which they did not agree.  The recent craft beer rise, coupled with the merging of the major suppliers, has abated that, giving the wholesaler more control of the discussions.

The declining sales of the top two companies, ABI and MolsonCoors, have again changed this model.  Where initially AB, Coors, Schlitz, and later Miller, drove their wholesalers through threats, intimidation, withholding of funds, pulling back of p-o-s, crew drives, and other means of intimidation, there is now a new 400 lb. gorilla on the block.  That gorilla is Constellation Brands.

For decades, under the leadership of Bill Hackett, both Barton Beers and Constellation Brands, have led their wholesalers by developing a friendship formed by the vendor. In addition, Hackett has another policy, whereby he does not change the effective marketing strategy of the brand.  Bill took Barton Beers from a small western importer to a national, major brewer.  First by consolidating the Gambrinus Modelo territory and next, overseeing the changing model from importer to brewer. This was accomplished at the same time ABI had purchased Modelo, but divested it in the U.S. market.  Bill did this while continuing to see Modelo trends grow at double digit rates.

Few, if any, major heads of importers had the wholesalers’ respect more than Bill Hackett!  But like all things in life, Bill has now stepped aside and turned over the keys to new leadership.  Recent IRI numbers show that Constellation is now the number one high-end company with a 25% share followed by ABI with now a 24% share.  Remember too, that the entire Constellation portfolio is considered high end.

Constellation believes that it will soon be the number-one gross profit vendor in 40% of their volume with distributors who are 70% MolsonCoors and 24% ABI and 6% other.  Constellation is open and upfront with their method of approaching distributors. Their EVP recently stated: “We can get more out of this, we can get them to invest more, co-op more, and give us more priorities on a monthly basis.”  The beer industry has heard these statements before, word for word, from other fast growing brewers.

So the question becomes: will Constellation go the path of other suppliers before them with increased demands on wholesalers while riding the success of the wholesalers? Or will Constellation continue their current model that brought them the success they are experiencing today?  One way will endear them to their wholesalers, the other way will eventually turn the wholesalers elsewhere.  It is a road well-traveled, but by whom?

Hogs get fat, pigs get slaughtered.

 Posted by at 6:00 am
Nov 292016

women-golf2Viewership for this season’s NFL games is reportedly down by 10% year-to-date.  Some of this decline has been attributed to the “cutting the cord” on cable TV due to high costs.  ESPN has reportedly lost over four million subscribers. Another cause for the decline in viewership has been the length of the games, both college and pro, which frequently exceed four hours.  Whatever the reasons, this decline must be very concerning to all advertisers, especially the beer companies.

Given the fact that many colleges have recently started selling beer during the games, or even sold concession rights directly to brewers, like ABI and Texas A&M have done, the decline in the number of fans watching the games has continued.

A recent study revealed the intertwining of alcohol and sports for those who watch sports live in the stadium, or at home on their television.  This study broke-out consumption by sport within the following sports: football, basketball, hockey, baseball, car racing, soccer, golf and tennis.  Of the eight sports studied, with the exception of football, increased alcohol consumption occurred at the event versus while watching the event at home.  Only while viewing football at home, was the viewer more likely to consume more alcohol.  The difference as a percentage is not much, four to five percent by sport, but that must translate into a great deal of volume.

So what happened to the 10% of viewers who once watched football and now are no longer watching?  And into how much volume does that 10% translate?  What are the demographics of those who are no longer watching football?

And will this trend be the beginning of declined watching, or just a glitch?  What if the downward spiral continues, signaling a major shift in the way males spend their free time?  If that becomes true, how will the beer industry adjust?

Many pundits in recent years have written and discussed the “woosification” of the American male.  The personification of this term can be seen in the so called “safe zones” now provided by many American colleges.  Much of this was brought to light after the recent election and the way college “snowflakes and cupcakes,” many of whom are males, are handling the election results. To many, these males do fit the demographic of the once typical NFL fan.  It is hard to visualize these snowflakes and cupcakes drinking a Bud, munching on wings and supporting an NFL team!  Perhaps they are more likely drinking white wine and eating brie.

In the future, beer advertising and marketing will be targeted toward specific demographics and more careful attention will be made as to where discretionary marketing dollars will be spent.  The NFL has been the bell-cow for decades, but the changing U.S. culture is causing major upheavals in all types of marketing, not just with beer as we are seeing with the NFL and college viewing.

Three things men always talk about – women, sports and cars…

Beer Fodder;

 Posted by at 6:00 am
Nov 222016

pilgramsThanksgiving week is the time of the year we all step back and remember just how blessed we are to be living and working in this country.  Once again, our country has gone through a long and trying election process with a new administration taking over in January.  Regardless of anyone’s political stance, our system works.

I often think about how fortunate I have been to have spent my entire professional career in the beer industry and rest assured; I will be thinking just that this Thursday as I take my family to visit a start-up brewery Thanksgiving weekend!  A couple of weeks ago, during the World Series games, I was with former colleges who reminded me of our good fortune.

Living in the DFW area, where many key wholesalers and retailers are located, ensures many industry professionals passing through the area, thus creating opportunities for us to meet and catch up.  During the sixth game of the series, two of my former key directors at Warsteiner were in town and we met at a pub, joined by a third former director.

While enjoying a beer and watching the baseball game, we reminisced about the old times at Warsteiner. We talked about the great year we had in 2008 when the company achieved record volume sales and profit.  We all agreed that we had momentum and a solid plan.  Based on our success and our team, we were looking at double digit growth for the coming years.  All the key components were in place, but the most important component was the professionalism of the team and the culture of the company.

Soon, however, our conversation took a downward turn when we began to discuss the brewery’s decision to raise the price points by four levels, and decrease the head count and the marketing budget.  That killed all the momentum and the company lost almost 40% of their business; business which has not returned almost 10 years later.

What struck me as ironic is that all three of these highly qualified key managers are no longer in the beer industry, they are, however, in the wine business and all are quite successful.  Their track record speaks volumes and yet they sell wine.  Does anyone really want to know why beer sales lag behind in growth verses wine or spirit sales?  Could it not be more obvious?

Any beer company, whether a startup or one that is established, should understand that it is not only talent, but talent that will and can work hard to achieve their company goals.  It is not simply the fact of knowing what to do, as much as it is knowing what not to do that really matters.  We are not seeing that in all segments of beer today.  Thus the negative numbers.

There comes a point in everyone’s life when you are able to recognize when you are in a good place professionally verses when you are not in a good place.  It always changes. But when it is good, it is great, and that stays with you throughout your career.  To Mike, Paul, and Ron, it was great to catch up and thanks, I will be thinking about our time together and our friendship.  To all out there, have a blessed Thanksgiving and I will be toasting you on Thursday.

Talent without working hard is nothing…




 Posted by at 6:00 am
Nov 152016

abi-sabmiller-mapOn can certainly attest that for the past 50 years the beer industry has been an industry of consolidation.  Beginning with Philip Morris’ acquisition of the Miller Brewing Co. it seems more breweries are selling.  Once the top tier started, it facilitated consolidation at the middle tier, and the movement continues today.

Philip Morris-Miller notwithstanding, take a look at some of the other consolidations and identify the ones that have been even partly successful.  Stroh/Schlitz?  Nope!  All the G. Heileman breweries under their umbrella?  Nope, that one ended in the US bankruptcy courts.  Pabst? Look what they ended up with and how many times have they been sold?  In all fairness, the Pabst brand has, in recent years, seen some revival, but not enough to place them at the level Pabst enjoyed in the 1960s.

The consolidation at the middle tier has been much more successful in terms of survival.  Even in this tier, the industry is seeing new, small craft distributors becoming a factor, as the consolidation by the wholesalers has opened the door for this model.

We have watched how InBev’s acquisition of AB, and the JV acquisition of SABMiller and Molson Coors affected the sales of those breweries.  With Molson Coors now independent of SABMiller, just how MC does in the future will soon be known.  We all, however, know what ABI’s course of action.

One could say that the recent U.S. election, combined with all of the rhetoric and promises given by the various politicians, may be similar to the rhetoric we see from the ABI leadership.  It is clear that 10 years after InBev’s take-over of AB, share growth and organic volume growth is not a reality.  For ABI to survive, it must continue to acquire more brands and more companies.

ABI’s recent announcement of their acquisition of the highly successful brewery, Karbach of Houston, has come right on the heels of closing the SABMiller deal. This again brings up this question: how many times does ABI make commitments, but proceeds to do exactly what they want to do?

Does anyone believe that this Karbach deal was just recently made?  This deal had to have been negotiated and agreed upon long before the announcement date.  The agreement, however, was kept quiet so both the industry and the DOJ would not object.  Now with the election over, and the change in government, what better time to announce such a deal?  Anticipate the deal to close before the end of the year, if not sooner. With the Obama administration on the way out, and the Trump administration incoming, there should be no expectation of DOJ objections.

Once again, Brito and his ABI team have played their cards with a winning hand.  Karbach is one of the craft industries incredible success stories.  Karbach might make 80K bbls. this year in only its fifth year in business. Yet they only sell in Texas!  Now, it will be in ABI’s portfolio.

ABI has shown, time and again, it will do what it needs to do to win.  It will not change, no matter what.

“Winning isn’t everything, but wanted it is.”

Arnold Palmer



 Posted by at 6:00 am
Nov 082016

beer-brands-1070Relax, this week’s post is not about today’s election!  It is about…. Beer!  In 1970, the Jos. Schlitz Brewing Co. sold 15,129,000 bbls. making them a strong second place brewery behind AB.  Even by 1980, Schlitz sold over 12,000,000 bbls. that year but the loss of more than three million bbls. was due to the quality issues they were beginning to experience.

In the early 80s, I had around a 40% share of market with Schlitz, but as the trend worsened, the Schlitz wholesalers became worried.  Schlitz ultimately returned to brewing the quality of beer they had brewed prior to the QA issues.  Unfortunately for Schlitz, by that time it was too late, and Stroh purchased the Schlitz Brewing company.  Although this was initially well received by the wholesalers, it soon came apparent that even Stroh could not, or would not, be able to save the brand.

Obviously, Schlitz wholesalers were very nervous as they watched their businesses die.  Almost all had to make a decision:  buy or sell.  Many, including Schlitz wholesalers in big markets like San Antonio, Dallas and Austin, sold out, feeling it was time.  Other Schlitz wholesalers, especially those in south Texas where Coors had expanded, but had not become a market success, went after those Coors houses. Pundits can make a case that the death of Schlitz created the beginning of the consolidation of the beer industry.

Even today, it is difficult to believe that Schlitz lost all that volume!  More than 15 million bbls. of beer is huge, but put that number in perspective, and consider that since 2008, ABI and MC have lost over 17 million bbls.!  That is more beer lost than Schlitz sold at its peak!

Just last week, both ABI and MC reported their third quarter results and the numbers have shown that their declines are not only continuing, but appearing to accelerate.  ABI and MC were both down about 4% in depletions.  Bud Light depletions were down 3.8%, resulting in their worst quarter of the year.

For MC, the numbers indicate that their premium lights gained segment-share, while Lite was down mid-single digits and Coors Light was down low-single digits.  AB had previously published that Bud Light share was down 65 bps.  All three leaders in the light segment were down.  All three beers lost a great deal of volume.

It took Schlitz 20 years to become an insignificant brand after being the number two brewery.  Both MC and ABI have now been on the losing end for 10 years.  Wholesalers for both must to be concerned about the future of their businesses.  Compared to the Schlitz wholesalers of the 70s, both MC and ABI are in a much better situation and, based upon their portfolio diversity, are positioned for survival.

There have been, however, a number of wholesalers selling out in recent months.  The continuing AB negative trends must be part of this emotional decision-making process for these wholesalers.  As long as the senior brewery executives continue to be highly compensated on increasing shareholder value, their focus will not be altered.  Similar to the Schlitz wholesalers, is it time to throw in the towel?

We have been hearing so much political spin in recent months that maybe we are numb to the spin the brewery executives are spouting.  Gaining share, while losing volume from another brand, who is losing more volume and increasing dollars, is a formula that will eventually hit a wall.  Wholesalers see exactly what is happening.

We live in a world of denial, and we don’t know what the truth is anymore….



 Posted by at 6:00 am
Nov 012016

1959-world-seriesConsolidation in the middle tier began to kick-up in the early 1980s when Schlitz started the journey, which would ultimately led to the death of this top selling brand. Of course, in non-Stroh markets, Schlitz wholesalers worked to pick up the right to distribute Stroh as the beer expanded across the U.S. into Schlitz –held houses.  This expansion, at least for a short while, gave these Schlitz wholesalers the hope of additional volume.

During same time, the G. Heileman Brewing company was also adding brands and expanding across new markets.  Most states had no provisions for either line extensions or dueling, which worked in favor of Heileman’s business model.  A model which provided for a number of wholesalers in each major market with the idea that by competing against each other, the brewery was the ultimate winner.

One year, Heileman planned to launch their super premium, Special Export, into Texas.  They sent a request for proposal (RFP) to all wholesalers.  These RFPs were much simpler than today’s RFPs.  As it turned out, my Schlitz distributorship was awarded Special Export for our market.  During the winter, our market was home to thousands of mid-western winter Texans, which provided an automatically built-in market for Special Export.  We had some initial success, but the excitement soon died, and so did sales.

Coors also was expanding across the mid-west and heading east, and wholesalers saw Coors as a life-saver, especially if they carried Schlitz. What wholesalers were most interested in was market spending and pricing.  What they were not concerned about was the quality of the product.  Heileman, Stroh, and Coors all made good beers with no QA issues.  Even Schlitz, in an effort to save the brand, reverted back to its original recipe formula, although by that time it was too late to save the doomed beer.

This past week, while addressing the wholesalers in West Virginia at their annual conference, the topic arose concerning the on-going issue of the quality today’s craft breweries.  The troubling part was that these craft brewers, who were making beer of suspicious quality, were some of the most outspoken critics of access to market and franchise laws.

Why would any wholesaler want to represent a craft brewery who was producing a poor quality product?  Such craft brewers either are choosing to ignore this problem or are completely unaware of the problem.  In any case, because of this issue of quality control, many brewers are spending time and money attempting to change state beer statutes in an effort to suit their own needs.

These brewers believe that eliminating franchise statues will provide them with access to markets and more control over the execution of their brands in the middle tier.  This alone has put the beer industry in a bind. No wholesaler wants to represent a brewery that has QA issues.

It goes without question that these craft breweries could eliminate much of their difficulties in getting to market if only they would spend their resources on building a lab and using trained and educated techs to oversee the quality of their liquids.  The QA manager should report only to ownership or the CEO, not to the brew master as this proves to be a conflict of interest.  The brew tech must have authority over all liquid and should be the determining factor as to whether or not the beer goes to market.

Schlitz and Heileman did not make it, one died due to QA issues brought on by management, while the other died because of management.  So, too, will these craft brewers perish, but not before damaging the industry.

If you win the rat race you’re still a rat!


Editor’s note:  A special thanks goes out to the West Virginia Wholesalers for inviting me to speak to them.  I enjoyed visiting with each of these professionals and hope to do so again in the future!

 Posted by at 6:00 am
Oct 252016

brookylnbrewery-svgAround 1980, Albert Cramer, managing director and owner of Warsteiner decided to build an international export department targeting business in North America.  At the time, Germany was still divided into two factions: east and west.  Albert knew that for the brewery’s long term survival, he had to expand Warsteiner’s international footprint.

What helped Albert make this decision was the fact that the exchange rate between the German Duetsch Mark the U.S. dollar was around .80.  Albert established Warsteiner Importers Agency, which allowed the brewery to sell beer made in Germany and receive payment in U.S. dollars.  The favorable exchange rate allowed Albert the ability to invest heavily in the U.S. market, subsequently growing Warsteiner to a volume that was, at one time, near 150,000 HL.

As we all now know, Europe’s transition to the euro, coupled with the change in the U.S. monetary policy, caused a reversal in the exchange rate.  At one time the rate was 1.50 euros to the dollar.  This new rate changed everything.  Some European beers, including Bavaria and Carlsberg, pulled out, or pulled back, on their support of their own brands. Due to the situation with the exchange rate, many breweries walked away from volume.  Warsteiner, in fact, lost half of their volume, mostly due to decisions tied to this rate.  Even today the exchange rate runs 1.10 to the dollar, and although this is much improved importers to continue to struggle with the monetary policy.

Last week, Stone Brewing Co. announced a five percent reduction of its workforce, adversely affecting almost 60 employees. Stone, one of crafts oldest and most successful brewers and distributors in southern California, recently built a brewery in Berlin and has been exporting beer for years.

As successful as Stone has been overseas, it is not nearly as successful as Brooklyn Brewery.  Brooklyn recently sold a minority position to Kirin Brewing of Japan, who is said to have purchased 25% of Brooklyn.   Brooklyn also announced that their beer would soon be brewed in Sweden by Carlsberg Brewing.  Currently half of Brooklyn’s annual volume of 300K bbls. are sent overseas!

It is obvious how the exchange rates drove this export business.  It made sense for Brooklyn, Stone and other breweries, including Rogue, to create an international business.  With the U.S. dollar worth 50% more overseas, where else could they get such a return on their investment?  Plus, these early breweries had little to no competition in the overseas craft industry.  Now these breweries have established their individual footprints around the world and they are growing.

As the U.S. market continues to experience slow down, or even push back from craft consumers, coupled with an additional 2,000 breweries coming on line soon, exporting could become a much bigger business.  On the other hand, successful breweries like England’s Brew Dog, are importing to the U.S. and building breweries so they, too, can by-pass exchange rates.  The success of these breweries remains to be seen.

Stone is reducing their workforce; while on the other hand, Rogue is expanding their sales force by 60%.  One builds in Germany, one expands back home.  Following these companies will be interesting. Warsteiner lost their number-one status in Germany some years ago, but remains that country’s number-one privately owned exporter of beer.  That, in itself, is the definition of a long-term vision.

A nickel ain’t worth a dime anymore!



 Posted by at 6:00 am
Oct 182016

logo-molsoncoorsFifty percent of my career in the beer industry has been working with or selling Coors in one way or another.  Initially, as a helper on a Coors truck in Dallas while in college, to stints at the brewery in Distributor Development, running the Coors branch in Ogden, Utah, to leading three Coors distributorships.  These distributors had market shares ranging from as high as 61% in Kansas to 13% in San Antonio while experiencing unprecedented growth.  Both Coast in Oregon, and Coors of Kansas, were top 10 volume distributors selling millions of cases annually.

I was involved with Coors in expansion markets, Coors Light test markets, overseeing financially troubled Coors distributors, and buying Coors operations.  On a couple of occasions, I even helped, and testified for, Coors brewery in court cases.  During these years I worked with Mel Lynn, Richard Franklin, Frank Spinosa, and Leo Kiely and even Pete Coors.  My time spent with Coors, in addition to my years at Warsteiner, were personally very rewarding.

One can argue that Coors has gone through even more changes in these past decades than ABI.  Remember, many years ago, Coors and Schlitz tried to combine, only to be rejected by the government.  Finally, there was the Molson fit, that combined two family-owned companies with similar cultures and a long successful history.  This was followed by the SABMiller JV which happened for reasons that today seem to have been somewhat premature, or in some circles, even unnecessary.  With the ABI acquisition of SABMiller, MolsonCoors is back where they began, now with the Miller portfolio included.

Wall Street is coming out with their recommendations, mostly with a buy rating for TAPS.  They see this new company as a very good investment, with some pundits seeing cost savings from $400 million to as high as $900+ million.  These numbers make one question. If these savings are there, why did MillerCoors not act on them?

No doubt, the company will restructure, and announce millions in savings, but most inevitably, the sales department will also restructure.  The new MillerCoors will be either a decentralized model or a centralized model.  Decisions will be made in the field or at corporate.  Take a pick.  More feet on the street and/or more chain effort.  It will be nothing we have not heard or seen before.  Same song, different verse.

What will change, and what will change for the best, will be the company culture.  How that change translates to performance will dictate the future of this company.  There will, again, be changes in ad agencies. Considering that there have been five different agencies for Miller Lite in the past five years, how can any brand get traction when there is a new theme every year? Now, however, with this new company, expect to see some consistency in Lite marketing.  Finally.

Given the ABI model, and ABI’s performance history, MolsonCoors is in a position to become the leader in the US if, and only if, they stop operating like ABI and operate like MolsonCoors.  It very well could be their best and last chance.

Only you can control your future….


 Posted by at 6:00 am
Oct 112016

pearl-breweryWhen Coors expanded into South Texas in the mid-1970s, the brewery required each distributor to refrigerate their warehouse and, at a minimum, insulate or refrigerate every delivery truck.  Coors was delivered to each warehouse from Colorado on refrigerated trucks or heavily insulated railcars.  The beer was immediately put into the cold storage warehouse.

In those days, for Coors, it was all about quality, and nothing less. The beer had to be in a temperature controlled environment and constantly rotated.  Out of date beer was to be picked up immediately and destroyed.  No questions asked.

With the exception of one retailer, this stringent code of quality control was not an issue when we opened the San Antonio operation.  That retailer, Hipp’s Bubble Room, a small hole-in-the-wall restaurant/bar located in the shadow of the Pearl Brewery that featured Pearl draft, took exception to Coors QA demands. Hipp’s put his weekly order of five cases in the un-air conditioned metal storage building behind his bar.  Needless to say during Texas summers, the temperature in that building was excessive.  Attempts were made by many Coors management visits to convince the owner to store the beer inside the bar, but he refused.  Coors, having no other choice, stopped selling beer to Hipp’s.  Consumer demand forced the owner to get Coors from the bar next door, Little Hipps, owned by his son.  Neither Coors nor Hipp’s relented and Coors continued to stand by its quality standards, even if it meant losing a good account.

Recent visits and discussions with multiple beer distributors have revealed that their number-one issue is with the quality of the new craft beers.  Without exception, multiple issues have arisen concerning the acquisition of a new brewer, quickly followed by quality issues.  The story is the same: One batch of beer was good; the next batch was off-taste.  In almost every case, the wholesaler soon discontinued these brands.  Like Coors in the mid-1970s, they had no choice.

Charlie Papazian, former head of the Brewers Association, wrote a commentary last month in the New Brewer, stated that a major issue for beer is quality. His solution, however, was to create a mandate that all crafts be shipped, stored, and sold cold.  No more retail warm-shelf placements.  Papazian, further advocated for reduction of redundancy in major brands, thus providing cold-space openings for crafts.  By getting the retailer to so, it would enhance the consumer’s experience with fresh craft beer and, thus, in-turn, grow the segment.  What would a cold box look like if all the Bud Light, Miller Lite, and Coors Light packages were on the warm shelf, replaced by crafts in the cold box?  Where would imports go?

Craft brewers continue to make access into the marketplace, and franchise laws are top issues for this middle tier.  Wholesalers continue to push back with QA issues.  Perhaps, if crafts put a priority on QA over access to market it would not have become the issue it is today.  High quality beer is much easier to sell, (e.g. New Belgium or Boston Beer), if the consumer knows the beer they are purchasing is the freshest possible. Fresh beer leads to repeat buyers.

Charlie Papazian’s ideal retail setting is not going to happen anytime soon, however, increasing quality for crafts should be the industries’ priority if crafts are to continue to grow.

Quality is not an act; it is a habit.

Beer Fodder;  cp-article

 Posted by at 6:00 am
Oct 042016

unnamedAt last week’s NBWA convention in Chicago, much of the talk among distributors and speakers centered around the current performance of the craft segment.  Both the scan numbers and data show a slowdown in craft volume sales and, the numbers show that the slow down seems to be accelerating during this second half of the year.  Yet, there are still craft sales that go unreported, such as brewery tap rooms.  Getting a handle on just how the craft segment is doing is difficult, at best.

At one time, defining beer segments was easy.  There was the premium segment, mostly made up of Budweiser, Coors, Miller, Schlitz, and Pabst.  There was the price segment, dominated by Busch and Old Milwaukee and malt liquors, dominated by Schlitz Malt Liquor. Rounding out the segments, one must not forget the imports, predominantly Heineken, Beck’s, the Canadian selections, and a few Mexican beers.  Regional or local brands fit into one of the-afore mentioned segments, slipping into a price segment that allowed them to compete against the big national brands.

These days we have a number of segments: light beers, FMB’s, and many others, even segments within segments.  It is hard to keep up with whom, or what, is in any particular segment… just look at crafts.  Several years ago, the industry consultant, Mike Mazzoni, presented a graph at a convention which analyzed the product life-cycle of Budweiser.  The graph was a classic bell curve.  It is safe to say that Mike was showing all that every product has a life-cycle.  So the question is, do segments have life-cycles, too?

The industry’s largest segment for decades has been the light beer segment, but light beers have been declining for some time now.  Yet within this segment the hottest brand with the best numbers is Michelob Ultra.  The light beer segment has lost millions in barrels yet Ultra is growing at an eye-popping rate.  MillerCoors just announced that it will be testing an Ultra type product. Goldwing, a low carb, low caloric beer will be in a couple of states soon.   Miller Lite positioned as a low carb, low caloric beer not long ago, was it not?

The light beer segment is not dead, not by a long shot, but there are brands that are going through the product life-cycle like the Budweiser graph mentioned earlier.  Coors banquet has been growing in the domestic segment for years, while Budweiser, which had been declining, now shows signs of a comeback. The point is, perhaps the segment is healthy, but there are brands that are not healthy.

The craft segment is no exception as there are many brands growing at unbelievable rates, while others are, or have, gone negative.  The segment is not the issue; it is brand(s) in the segment.

I learned the hard way about positioning in business, about catering to the right segments…

Beer Fodder;

 Posted by at 6:00 am