With premiumization showing no signs of slowing, Anheuser-Busch InBev’s High End leaders are focusing on key import, lifestyle and craft brands in 2023.
“Premiumization in the beer category is an unstoppable trend, and even this year, 2022, where there’s a lot of noise around the economy and about inflation, premiumization continues,” VP of High End sales Nate Muszczynski told Brewbound. “This year, which is an interesting stat, will be the first year that over half of the beer volume in the U.S. will be above core.”
To meet the moment, A-B’s High End – which includes the Brewers Collective, the company’s craft division – is focused on three goals: “maximizing” Stella Artois, A-B’s largest High End brand; growing its premium lagers; and continuing to lead craft growth among its Brewers Collective brands, Muszczynski said.
Dollar sales of Stella Artois lager have declined -5.6% at multi-outlet grocery and convenience stores year-to-date through October 30, according to market research firm IRI. Next year, the High End team’s plan is to make Stella Artois feel “more modern” and “more approachable and enjoyable for consumers, but maintaining the pinnacle of quality,” Muszczynski said.
“It is our North Star in terms of quality and how we’re having consumers experience and enjoy beer,” he added. “Stella’s mission for the last few years and the evolution we’ve been on is about making every occasion special and not just being a beer for special occasions.”
A-B shifted Stella Artois production from its home country of Belgium to the U.S. in early 2021, which resulted in “virtually zero” disruption, Muszczynski said.
The High End’s second goal for 2023 is to grow its premium lagers, which includes Mexican import Estrella Jalisco (+30.1%, to $23.8 million YTD through October 30), Michelob Ultra Pure Gold (-5.7%, to $126.2 million), and Kona Big Wave (+5.9%, to $40.3 million). The latter is a golden ale, but Muszczynski explained the company believes it meets similar consumer needs.
“This is a space within the High End that is leading a lot of growth – think a lot of import lagers and whatnot,” he said. “But we define the space as this easy-drinking style.”
Sales of Estrella Jalisco, a 112-year-old Mexican brand A-B rolled out in the U.S. in 2016, are concentrated in an area that stretches from California to Texas.
To connect with Mexican and Mexican-American consumers, A-B has forged an official partnership with the Mexican national soccer team, which it has leaned into during the World Cup.
“We’re investing behind the brand and counting on the growth in that geography,” Muszczynski said. “Over time, when we’re ready, we’ll start scaling it further.”
Kona Brewing – along with Redhook, Widmer Brothers, Omission Beer, Cisco Brewers, Square Mile Cider, Appalachian Mountain Brewery and Wynwood Brewing – joined the Brewers Collective when A-B completed its acquisition of Craft Brew Alliance in 2020. To gain approval from the Department of Justice to close the deal, A-B divested of Kona’s Hawaii operations, which were sold to PV Brewing Partners, a partnership between former A-B president Dave Peacock and Overland Park, Kansas-based family office VantEdge Partners.
Kona Big Wave has become A-B’s No. 4 draft handle nationwide, according to BeerBoard data shared by Muszczynski and High End and Brewers Collective VP of marketing Carrie Shafir.
“We’re seeing that it’s really playing in that space with premium lagers, and when you compare it to all other non-lager styles, it had a better rate of sale on draft than all those other styles,” Muszczynski said. “So we truly believe this brand is ready to start to break out of craft and play as this mega brand, or this lifestyle brand, that we’re going to create it or evolve it to become.”
In 2023, the company plans to “keep the pressure” on Kona Big Wave’s on-premise presence, while focusing on “consumers in the off[-premise] and in the marketplace experiencing the brand in a new way.”
Craft Strategy: Lean Into Leading Styles
As the Brewers Collective enters its second full year under the leadership of president Andy Thomas, its 2023 strategy is all about focus, said Shafir, who was promoted to her role in July after serving as GM of the Blue Point and Cisco brands.
“We have 20 brands in our portfolio all across the country in different regions,” she said. “As we look to the future, if we’re not focused, it can get messy very quickly, so our strategy for the collective for next year is really mainly focused around leading with style.
“That’s again focused on continuing to gain share and lead across what we see as the top performing craft styles,” she continued.
Naturally, the main craft style the Brewers Collective plans to organize its 2023 plans around is IPA, which accounts for nearly 45% of all off-premise craft dollars year-to-date through October 30, according to IRI.
Key IPAs within the Brewers Collective include Elysian Space Dust IPA, the Goose Island Beer Hug IPA family (“an absolute monster for us”), and Wicked Weed Pernicious IPA, “which is absolutely on fire,” Shafir said.
Space Dust IPA is the ninth best-selling craft beer at off-premise outlets tracked by IRI. Its dollar sales have declined -4.2% year-to-date through October 30, but the brand made a slight share gain (+0.02%) and accounts for 1.58% of all craft dollars.
Dollar sales of Pernicious IPA, the 30th largest craft brand in IRI-tracked off-premise accounts, increased +26.3% year-to-date through October 30.
Goose Island’s Beer Hug family includes Hazy Beer Hug IPA (6.8% ABV), Neon Beer Hug IPA (7% ABV), and Tropical Beer Hug Imperial IPA (9.9% ABV), which is driving growth.
“Nationally we’re seeing Tropical Beer Hug is the No. 1 share-gaining brand in the last four weeks and No. 2 year-to-date,” Shafir said.
“We’re excited that we’re seeing Beer Hug have momentum,” Muszczynski added. “It’s not a one-year thing – it’s having a great sophomore year, and we’re excited for next year to continue to accelerate it.”
In addition to IPAs, the Brewers Collective is focusing on wheat beers, led by Golden Road Mango Cart (4% ABV). Within craft, wheat beers (+2.9% YTD through October 30, according to IRI) are one of only two styles to record growth this year, in addition to craft variety packs (+3.5%). Mango Cart is outpacing the style, with dollar sales +11.3% year-to-date.
“We’re seeing some really amazing momentum behind that brand, and really seeing it as the next generation’s wheat beer,” Shafir said. “When we look at the shopper data, we get really excited about the consumer that’s buying Mango Cart. It’s more female, it’s more diverse, younger, and that gives us a lot of positive momentum and encouragement.”
Other wheat beers across the Brewers Collective portfolio A-B will prioritize include Four Peaks Wow Wheat (5% ABV) and Cisco Grey Lady (4% ABV).
The Brewers Collective’s beyond-beer focus will be on Karbach Ranch Water (4.5% ABV), which is predominantly sold in its home state of Texas, but has expanded to Oklahoma, Utah, Tennessee, North Carolina, Louisiana, Missouri, California, South Carolina, New Mexico, and Florida.