Amid summer’s busy selling season, a quiet revolution was underway in Nielsen’s weekly list of the top 10 growth brands in the beer industry.
Yes, spiked seltzer waters took the industry by storm and Mexican imports continued their torrid pace. But throughout the past few months, an unlikely segment of beers dominated the list, which tracks market share among the nation’s largest brands. Economy brands occupied at least four, and in some cases, five slots of the top 10 list for much of the summer.
MillerCoors’ Keystone Light, buoyed by a brand renovation and new 15-packs, consistently was the top economy brand on the list, holding down the No. 3 slot with case volume up 5.5 percent year-to-date and sales dollars up 0.8 percent, according to Nielsen all-outlet data. And its growth is accelerating: In the most-recent four-week period, the brand is up 16.8 percent in volume and 10.9 percent in sales dollars. The brand has picked up 0.5 percentage points of share in the economy segment this year, and 1.2 percentage points in the last four weeks, the data show.
Hamm’s, meanwhile, is riding a wave of nostalgia and increased distribution up 63.2 percent in sales dollars on a case volume jump of 75.9 percent year-to-date through Sept. 9, according to Nielsen. It too is accelerating: In the last four weeks, the brand is up 99.7 percent in dollars on a 113 percent increase in volume.
They joined Anheuser-Busch InBev brands Bud Ice, Busch Light and Rolling Rock among the economy brands that made an appearance on the top 10 list this summer. The reason? There’s no one simple answer. But a few key factors played a role: Increased investment in those brands, a thirst for nostalgia and authenticity and, perhaps, continued evidence of a growing income gap in the U.S. that has more consumers seeking value. A similar trend is playing out in spirits.
“With both Keystone and Hamm’s, we spent time understanding our drinkers a bit more and speaking to them,” says Matt Reischauer, director of brand marketing for the MillerCoors economy portfolio and Mexican imports. The company’s largest economy brand, Miller High Life, also has made an appearance on the fastest-growing list in 2017 and continues to perform well. The Champagne of Beers is up 2.1 percent in sales dollars on a 1.4 percent bump in volume year-to-date, according to Nielsen.
With Keystone Light, the company’s second-largest economy brand, the company invested money and time into consumer research, which led to refreshing and modernizing its packaging and messaging. The brand found that more of its drinkers were women than originally thought and its older drinkers were among its most loyal. On top of that, “what we heard from drinkers is they thought Keystone Light was a dying brand because we hadn’t spoken to them in a really long time” Reischauer says. “We were not connecting with the people who drank us the most, the people who were the most loyal.”
Based on its findings, it honed its message targeting those consumers, both through advertising and marketing and its packaging, which included the introduction of the 15-pack. That innovation, which is driving incremental sales for the brand, is now being mimicked by ABI’s Natural Light, which is set to release 15-packs of its own soon.
Still, Reischauer says, capturing the interest of consumers and forging a long-term relationship with them is “beyond just selling them beer at an opening price point or in a 15-pack.” Instead, “it’s about connecting with them in a real way, either through the refreshed brand world of Keystone Light or through the enchanting and charming brand of Hamm’s.”
Hamm’s, which recently snagged a best-in-class recognition from three craft brewers in a Chicago Tribune-organized blind tasting, is on a roll. Sold at an opening price point, the beer recently expanded from a mostly Great Lakes distribution to a national platform, siphoning up value drinkers as well as craft drinkers snapping back to the American heritage lagers they grew up drinking.
“There’s something refreshing about going back to a tried and true brand that maybe better reflects who you are,” Reischauer says. “They want something that’s easy-drinking, damn it, and there’s something to be said for that.”
The overall economy segment is down 1.6 percent in sales dollars and 0.8 percent in volume this year, per Nielsen. Other MillerCoors economy brands, including the Milwaukee’s Best franchise and Icehouse, have struggled. Each of those brands is down single digits for the year in part because of unexpected consumer reaction to a decision to raise the alcohol content in some of those beers. MillerCoors reversed course on that decision and restored the beers back to their original taste.
ABI likewise has put money behind its economy brands, shelling out the big bucks to land a major television commercial this year that aired during the professional football championship game with Busch Light, the first time it has elevated to that stage a brand not named Budweiser or Bud Light. With Rolling Rock, sales have surged as ABI has re-positioned the brand into a lower price-point ($1.15 less per case in the latest four weeks), which appears to be helping drive sales, according to Nielsen data.
More American beer consumers also may be reaching for lower-priced economy brands because of what Technomic’s David Henkes calls “an undercurrent of uncertainty” within the U.S. economy that’s also showing up in restaurant sales.
While unemployment is low and the financial markets are performing near record highs, there’s “some underlying consumer nervousness about the economy and the current (geopolitical) situation,” Henkes says, that has consumers cutting back spending. And if they perceive they can still get a quality beer for a lower price-point, they’re making that choice.