In the beer category, light and low-calorie beer sales are poised to overtake those of regular beer, which have been ailing as diet-conscious beer drinkers opt for lighter versions, according to a new report from Mintel International's office here.
The popularity of lower-cal beers is reflected at the shelf, where they're taking over more display space, retailers said.
"Low-carb and light beers are beginning to drive the category," said Rick Damke, vice president, Discount Foods, Anniston, Ala., where those beers account for about 45% of beer sales. "They're taking market share every day."
Discount Foods, with 11 stores in Alabama and Georgia, merchandises low-carb beers in one of four displays reserved for new products, which replace slower-moving items.
"Low carb seems to be going pretty steady," said Mike Parrish, a liquid sales associate at Big Y Foods, Springfield, Mass., which carries about five low-carb beer choices, mostly on the shelf, in its 52 stores in Massachusetts and Connecticut. As their popularity picks up, low-carb versions may get a better presence in coolers, he said.
Sales of U.S.-produced beer in retail channels grew a scant 1%, in constant 2003 prices, from 1998 to $40 billion in 2003, and are expected to grow at the same rate through 2008, Mintel researchers forecast. With regular beer sales declining, the category owes its growth to light and low-carb beers, along with the smaller, but fast-expanding, malt liquor drink subcategory.
Sales of light and low-calorie beer grew 13% at constant 2003 prices from 1998 to 2003, when it accounted for 45% of the domestic beer market. Mintel predicts light beer sales will exceed those of regular beer by 2005, increasing 26% at constant prices to $21.6 million from 2003 to 2008, when light beer is expected to account for 54.4% of total domestic beer sales.
While total beer sales are essentially flat as of late, consumption trends also point down. Per capita consumption slipped to 21.6 gallons in 2003 from 22.1 in 2000, according to the consulting firm Beverage Marketing Corp., New York.
Nevertheless, nearly 30% of Americans drink light or low-carb beer, compared to 27% who drink regular beer, according to Mintel. Beer producers have responded to the popularity of low-carb diets by emphasizing light beers' lower carb levels or launching extensions to target carb-watchers. Anheuser-Busch was an early mover, introducing Michelob Ultra in spring 2002. Ultra's volume hit 2.7 million barrels in 2003, making it the 10th most popular beer that year among the leading domestic brands, according to Beverage Marketing.
With 95 calories and 2.6 grams of carbs, Ultra has become a favorite of beer drinkers, retailers said.
In Big Y stores, 12- and 30-can packs get coveted stack displays in the beverage aisle. M&E Food Mart, with 37 Market Basket and Lucky Seven stores in Louisiana and Texas, gives Ultra stack or endcap display space in most of its stores, said Keith Dauterive, vice president of advertising, merchandising and buying for the Nederland, Texas-based chain. In Louisiana, where Ultra is more popular than in Texas, stores discount Ultra more heavily; in Texas, it's priced in line with other Michelob beers.
"It's almost been a category of its own," Dauterive said. "The Ultra's been a phenomenon. Others are not catching on quite as fast. [Coors'] Aspen Edge is still relatively new."
As a channel, supermarkets are holding their own in terms of sales and market share in the battle with liquor and convenience stores. Supermarkets' beer sales advanced 2% from 1998 to $9.6 billion in 2003. Their share stood at 24.5% in 2003, up slightly from 24.3% in 2001, while liquor and convenience stores garnered 30.9% and 26.8%, respectively. While supermarket operators benefit from convenience as well as planned buys, giving them an advantage over liquor stores, they also have less shelf space than liquor stores, leaving less space for specialty products. In some states, supermarkets face the additional obstacle of laws banning them from selling beer.