E-Malt.com News article: USA: Imported beer sales rise as things get better for Hispanics in the USA

Growth in sales of imported beers, especially popular with Hispanic and African-Americans, is surging ahead of mainstream ale – suggesting to brewers that some of those worst-hit by the downturn are now bouncing back, ft.com reported on October, 21.

US beer sales slumped alongside the broader economy as stalwarts of the bars found themselves jobless and sitting in homes worth less than they paid for them.

Minorities were hit especially hard. Many Hispanics worked in industries such as construction, blacks were hit by cutbacks in the public sector, and both groups were under-represented in professional jobs where there were fewer lay-offs.

Unemployment rates generally are marginally better this year, but remain skewed at 14.2 per cent for blacks, 9.9 per cent for Hispanics and 7 per cent for whites, according to government data.

But the brewers’ read suggests confidence – manifested in willingness to spend – is rapidly strengthening. Imports, half of which are sold to non-whites, show “the biggest trend reversal”, according to Dolf van den Brink, who heads up the US operations of Heineken, the number three brewer by sales.

“No other segment is skewed so much to those most affected by the crisis in terms of unemployment,” he said. “As things get a bit better, those consumers are starting to spend again resulting in the huge trend in import beers.”

Imports make up around one-tenth of the overall beer market, according to Nielsen, the global market research consultancy. Last year sales were broadly flat; so far this year, sales are up 6.5 per cent. Overall, beer sales dipped 1 per cent last year and are up about 2 per cent year to date.

Other food and drink companies are also eyeing growth in these markets, with the likes of Kraft, General Mills and PepsiCo of the US increasingly targeting their advertising efforts at the US Hispanic population and tailoring recipes to cater to their tastes.

Tony Vernon, Kraft’s new chief executive, said earlier this year that the US grocery company will increase its spending on Hispanic advertising by “double-digits” this year, after tripling its investment in 2011.

Analysts say that Hispanics’ incomes are growing and that the group tends to spend a greater amount of their disposable income on food and groceries.

“In many ways, Hispanics are the ideal staples consumer: they spend more time and money per trip to the grocery store than the national average, they bring more family members with them to shop, and they tend to be more brand loyal,” Robert Moskow, analyst at Credit Suisse, wrote in a recent report on the subject.

For brewers – and the host of food and beverage manufacturers wooing these groups – the appeal lies beyond rising employment among today’s workers and their children.


24 October, 2012