BEER FUTURE IS SEEN BUBBLING UP

ST. LOUIS -- The beer category has a good future, thanks to increased disposable income along with a greater number of people turning 21, Anheuser-Busch officials said at an editorial briefing here.

The adult population is increasing more rapidly, so that by the year 2000, the population aged 21 and over will be about 0.8% higher than the previous year. This rate of change will be almost as high as it was in 1985, when it was a little more than 0.8% -- the high-point of the 15-year period.

Disposable income is also forecast to continue growing. It has been increasing since 1993, and that is predicted to continue into the year 2000. These two factors, along with the fact that beer prices are increasing at a modest rate, should translate into healthy beer sales up until the turn of the century, Joe Patti, senior director of retail planning and category management, said at the meeting held last month.

As for other category statistics, Patti said that in 1996, the industry sold 201.8 million barrels of beer, which was a 1% increase in volume over the previous year. The lion's share of volume was in the premium segment, which sold 113.3 million barrels. This represented a 1.4% increase over 1995 and 56.1% of the overall beer category.

"The excitement is in the specialty market," said Patti, noting that microbrew/specialty volume was up 22.2%, with 8 million barrels sold in 1996. Specialty brews accounted for 3.9% of the beer category.

The industry sold 12.7 million barrels of imported beer (up 11.7% and accounting for 6.3% of the category) and 8.8 million barrels of malt beer (up 0.3% and accounting for 4.4% of the category).

Volume was down in the super-premium and subpremium categories, by 6.3% and 1.3%, respectively.

Super-premiums made up 3.3% of the beer category, while subpremiums accounted for 25% of all barrels sold.

Patti predicted that products on premise will become less of the business, and packaged liquor stores will also decline over time.

In other news, the company plans a number of promotions, including cross merchandising with Frito-Lay in the summer and fall and "create mega in-store events."

One such program will be cross merchandising beer with French's mustard, Frito's Rold Gold pretzels and Kingsford charcoal.