USA: Heineken strives to persuade American drinkers to switch to Heineken Premium Lite in a battle with market leader Anheuser-Busch
The U.S. is the world's most profitable beer market. Anheuser-Busch Companies Inc. is its king (they control a whopping 49%), while with 3.5% market share, Heineken is just a pawn (they control 8% of the global market). They're hoping to change that with their new Heineken Premium Light [HPL], which hit shelves in March.
HPL aims for the weight-conscious consumer; half of U.S drinkers prefer lite beer. With a $50 million "tastefully smooth" marketing campaign, Heineken is trying to persuade drinkers of domestic lite brews to "upgrade" to HPL, creating a luxury-lite segment.
Currently Heineken controls just 0.5% of the U.S. lite market; analysts feel HPL could boost this figure to 4% over the next year. Anheuser, who control 49% of the market, says it has seen no impact on their sales, which leads some analysts to believe HPL sales are cannibalizing Heineken's Amstel Light, whose volume has slipped 6% this year.
Heineken hopes a 'halo effect' surrounding its new offering will boost sales of other lines; lager volume is up 11% this year. Heineken would be well-served to take a page out of BUD's history; last year's highly-touted Budweiser Select fizzeled once the company stopped aggressively marketing it. Lesson learned: Continue promoting your product if you want it to stay hot.
Barron's forecast: "Heineken's new premium light beer could help lift the company's shares 10% to 15% within a year, and lead to long-term double-digit earnings growth."
Jim Cramer has gone on record saying he would not buy BUD, because, "there is little growth potential" since they already command half of the U.S. beer market. This doesn't seem to bother Warren Buffett though; recent filings reveal Berkshire Hathaway Inc. has accumulated $1.88 billion worth of its shares.
John Bethel, who holds Molson Coors Brewing Co., feels it is the better of the two major U.S. breweries; Buffett, he proposes, is forced to work with such large sums of money that it makes investing in TAP unfeasible. Eddy Elfenbein wonders if BUD will gain anything from its recent EU Budweiser trademark victory. The largest potential growth market for beer is China.
Wstecz
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