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Sinking Subpremiums; 9 of Top 10 Down; Off 1.4 Share; PBR, The Big Exception

There's been some much better news this year on beer industry volume overall, but one segment is still sufferin': subpremiums. That's by design. Subpremium volume squeezed in recent yrs as AB took larger price increases on subpremium brands, attempting to narrow gap between subpremium and premium pricing. Subpremium/malt liquors lost over 4 mil bbls last 2 yrs to 50 mil bbls and likely down 3% or so again this yr, another 1.5 mil bbls.

All below premium beers dropped 3.3% in Nielsen food/drug/convenience data through 8/11 and they lost 1.4 share to 27.6 of off-premise volume (but just 20.4 share of $$). Nine of top 10 subpremium brands declined. AB has top 3 brands that are 44 share of segment volume. Natty Light down 6%, Busch Light down 0.8% and Busch down 4.8%. MillerCoors has brands # 4&5, both down mid-single digits: High Life down 5.5% and Keystone Light down 6.3%. Natty Ice down 7.5%. Top 6 subpremium brands over 2/3 of segment volume, but accounted for all of share loss; down 1.4 share between 'em yr-to-date.

There's only one shining light among subpremiums: Pabst Blue Ribbon. PBR continues to rock. Up 26.7% in Nielsen f/d/c YTD. PBR presently has best below-premium image, especially among young adults. Each of brands #8-10 are smaller MC brands, Icehouse, Steel Reserve and Mil Best Ice. All 3 down; Steel Reserve and Best Ice down less than 1%.

Avg Natty Light prices up 64 cents, 4.3% per case compared to Bud Light up 38 cents, 1.9% yr-to-date. All below premium pricing up an avg 49 cents, 3.3%, while premium prices up 36 cents, 1.85%. As AB launches another round of above-inflation price hikes on subpremium brands, subpremium declines likely to continue. Interestingly, Pabst among highest-priced subpremium brands, just over $16 per case, tho its avg prices up just 2%. Other below premium with best trend: Steel Reserve, highest-priced of any of 'em.

Publishing Info

  • Year: 2012
  • Volume: 43
  • Issue #: 16
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