Coors Light Passed Bud in 2011 to Become #2 Brand

Coors Light ended 2011 about ½ mil bbls ahead of Bud, and new #2 brand in US if you include Puerto Rico and exports (as we always have). Even in 50 states, looks like Coors Light passed Bud to become #2 brand by end of 2011. This is the first time in almost 20 years, since 1993, that AB didn’t have top 2 brands.

Coors Light gained 150,000 bbls, 0.8% to 18.225 mil bbls in 2011, INSIGHTS estimates. But Bud down 4.6%, 850,000 bbls, to 17.7 mil bbls, we figure. Both #s include Puerto Rico and exports, about 800,000 bbls of Coors Light and a little over 500,000 bbls of Bud. Even if you factor that out, INSIGHTS estimates Coors Light at 17.35 mil bbls in 50 states, likely just ahead of Bud at around 17.2 mil bbls.

Despite this big switch in rankings, Bud had its lowest dropoff rate in yrs in 2011. But it was still nowhere close to even. Its 4.6% dropoff pace represents a significant improvement from 2009, when brand fell nearly 10%. Still, Bud brand has declined 7.1 mil bbls, 29% in last 5 yrs alone, including 4.4 mil bbls last 3 yrs. It has lost more than 60% and over 32 mil bbls from its 50 mil bbl peak in 1988, when it was over 1/4 of the industry.

Coors Light has gained 1.5 mil bbls, 9% in last 5 yrs, a period of slow steady growth. So swing between Bud and Coors Light totals about 8.5 mil bbls just in last 5 yrs. Yet Coors Light up 1% or less each of last 3 yrs and just flat in Symphony IRI Group food/drug/convenience data for 13 weeks thru Nov 27. That compared to a 2% gain in SIG data yr-to-date. Bud dropoff is 4% in SIG for 13 weeks, compared to 3.6% YTD. So each of Bud and Coors Light doing less well overall than in SIG data. Interestingly, Bud brand ahead by 4.4 mil cases in SIG data; 101.3 mil cases to 96.9 mil cases. But that includes AB’s c-store dominance and doesn’t factor in Bud weakness in independents and on-premise. Coors Light also down in Northeast strongholds. But it still gained overall in difficult environment for megabrands and achieved longstanding goal to become #2 brand.

Beer Stocks Have Mixed Year: Hedge Funds Shifting to Beer

Beer stocks came back to earth in 2011 for most part, following solid 2009-10 gains. AB InBev did best among world’s top brewers, but its gains decelerated from 18% in 2010 to still solid 10.5% in 2011. SABMiller stock price finished yr up just 0.4%, compared to gains of 24% and 48% previous 2 yrs. Heineken stock fell 14% in 2011, following 10% gain in 2010. Molson Coors shares dropped 13% in 2011 after stock had rebounded with 11% gain in 2010. With late yr surge, Boston Beer shares up double-digits for the yr (+14%). But they had more than doubled in 2010. Craft Brewers Alliance shares fell 7% after more than doubling in each of previous 2 yrs. Diageo shares had another strong gain, up 18% in 2011 following 10% gain in 2010 and 11% gain in 09. Constellation Brands shares declined 18.5% in 2011, losing about half of its gain from previous yr. Meanwhile, Hansen Natural (Monster) soared 76% in 2011.

One other interesting development at play with beer stocks: hedge funds showed increasing preference for beer co’s over spirits, noted Seeking Alpha. Hedge funds “moved away” from spirits cos like Diageo and Brown Forman in 3d qtr while “investment increased significantly in breweries across the board,” noted blog. Hedge fund investment in ABI “increased by roughly 50%” from Jun to Sep while Boston Beer “was also popular” among funds, adding about $3.5 mil to funds invested at end of 3d qtr.

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