Mar 012016

KukkoModelo’s rise started in the early 1980s at the same time that two key strategic decisions were made by the company.  The first decision was to go to the clear bottle, still used today, and the second decision was to create two importers: Gambrinus, located in San Antonio and designed to serve the eastern half of the US and the other, Barton Beers, out of Chicago, to serve the western half of the US.  Even though both companies distributed Modelo for only half the US, both companies added critical mass by bring in imports with national footprints to their portfolio.

Barton added St. Pauli Girl and Tsingtao, and Gambrinus, which already distributed Shiner, added Moosehead, and later Pete’s Wicked Ale.  These brands gave both companies the opportunity to sell product in non-Modelo markets.  Their footprint was the entire US market.  When Modelo left Gambrinus and went to Barton (now called Crown), for their entire US market, Barton already had a sales force in place with knowledge of key markets outside of their Modelo footprint.  Obviously, they had to ramp up dramatically due to the Modelo volume, but they were familiar with the new markets.

Today, Crown no longer imports St. Paul Girl.  Moosehead left Gambrinus to go out on their own, but now they are part of the portfolio of United States Beverage.  As has been previously written, both Moosehead and Warsteiner attempted to merge into a JV which would have created a competitive importing company.  Unfortunately, for both companies, this JV did not happen.  Today, Warsteiner remains an independent operation.

Recent statistics have shown that imports now are at a 15% share, driven by Mexican imports and Stella.  Given the growth of the craft segment, some imports are doing extremely well.  Some are not.

For those imports who are struggling, a recent statement by one of the owners of Good Life Imports, sums up the struggles.  The owner eluted to the fact that the US was supposed to be a capitalistic and free market society, which should make success possible, however, he was surprised at the difficulty Good Life Imports had in getting their gluten free beer, Kukko, from Finland into the US market.  He noted that it was more difficult to import into in the US than in many other markets in the world.  Good Life is importing Kukko as an independent importer.

Two other crafts, Victory and Southern Tier, recently announced a merger.  Once again, the two companies were driven by critical mass, backroom savings, extra capacity, new footprints, and expanded talent base that the merger would create, thus improving their business. Crafts are creating companies together, just as distributors have been doing for years.

The question is: what is next?  With Crown and Heineken getting involved in crafts, anticipate imports joining these craft JV’s.  Independent imports, struggling to get focus, could become a member of these models.  The imports would benefit from the obvious:  critical mass, feet on the street, focus, chain emphasis, on premise growth and many other areas that are out of their reach.  In return, the craft partners would have doors open for them in overseas countries through their import partners.  Why start from scratch?

The future will see imports and crafts getting together.  It works for both.  It is all about attitude.  Attitude is a little thing that makes a big difference.

Beer Fodder;

 Posted by at 6:00 am