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Large Wine, Beer & Spirit Brands Losing Share

by | Nov 6, 2013 | alcohol beverage law

The largest alcohol brands that accounted for approximately 25% of category volumes at the beginning of 2012 have all lost share since then, according to GuestMetrics. Here are excerpts of a press release released November 3rd. The full release can be viewed at: http://www.guestmetrics.com/2013/11/04/largest-brands-losing-share-three-alcohol-categories-though-holding-better-wine-spirits/

  • Beer: is the most concentrated category, with just three brands (Bud Light, Miller Lite, Coors Light) accounting for 25% of on-premise beer volumes. However, comparing the first 9 months of 2013 versus the first nine months of 2012, the roll-up of those three brands has seen share contract, from 27.4% to 25.5% for a loss of about 2 share points.
  • Spirits: is also a very concentrated category, with just six brands (Grey Goose, Jack Daniels, Ketel One, Patron, Absolut, Crown Royal) accounting for 25% of on-premise spirits volumes. However, comparing the first 9 months of 2013 versus the first nine months of 2012, the roll-up of those brands has seen share contract, from 25.1% to 24.3% for a loss of 0.8 share points. Comparing the growth performance of those 6 brands versus the long tail of brands that account for the remaining ¾ of category sales, the top six saw volumes fall 5%, while the tail’s volumes only declined 1%. Pricing does not appear to be the main driver of this, since price/mix for the top brands increased 3.2% versus the 4.2% increase from the tail. However, given the top brands have a 31% price premium to the tail, part of the share loss could be due to price sensitivity among consumers. Additionally, while less dramatic than in beer, one of the other drivers of the share loss may be the proliferation in the number of brands sold, up 8% YTD.
  • Wine: is significantly more fragmented category, with 150 brands accounting for 25% of on-premise wine volumes. However, comparing the first 9 months of 2013 versus the first nine months of 2012, the roll-up of those brands has also seen share contract, from 26.1% to 25.3% for a loss of 0.8 share points. The top wine brands had seen share hold up a bit better earlier in the year, but lost ground in 3Q13. Comparing the growth performance of those brands versus the long tail of brands that account for the remaining ¾ of category sales, the top brands saw volumes fall more than 4%, while the tail’s volumes declined only 0.5%. Pricing could be one of the drivers of this, since the price/mix for the top brands increased 4.8% versus the 2.7% increase from the tail, resulting in near price parity between the top brands and the tail brands. Proliferation in the number of brands does not appear to be an incremental driver (given the high degree of fragmentation is already the status quo), with the total number of wine brands sold in on-premise holding generally flattish compared to yago levels.

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The foregoing was prepared as general information. It is not meant to provide legal advice granting any specific matter and should not be acted upon without professional counsel. If you have questions or require additional information regarding these or other related matters, please contact Malkin Law, P.A. This material may be considered attorney advertising under certain rules of professional conduct.