Coors Light to become number two beer brand in the U.S.

In Golden, Colorado, they will have celebrated this news with a cold one. In 2011 Coors Light surpassed Budweiser as the number two beer brand by shipments in the U.S., including Puerto Rico, and exports, the trade publication Beer Marketer’s Insights reported in early January 2012.

This marks the first time since 1993 that Anheuser-Busch didn’t control both of the top two beer brands, according to the publication. Bud Light remains the nation’s top seller.

Coors Light is distributed in the U.S. by MillerCoors, a joint venture between Molson Coors and SABMiller.

While Anheuser-Busch hasn’t yet released its own sales figures for 2011, the publication estimated that sales of Budweiser dropped 4.6 percentage points to 17.7 million barrels (20.7 million hl) while Coors Light shipped 18.2 million barrels (21.3 million hl), gaining about 0.8 percent over 2010.

Despite this switch in rankings, Bud had its lowest decline in years. Its 4.6 percent drop in 2011 represents a significant improvement from 2009, when volume sales of the brand fell nearly 10 percent.

Still, Bud brand has declined 7.1 million barrels (8.3 million hl) or 29 percent in the past five years, says Beer Marketers’ Insights, including 4.4 million barrels (5.2 million hl) in the past three years.

Beer Marketers’ Insights also reminded its readers that Budweiser has lost more than 60 percent in volume or over 32 million barrels (37.5 million hl) since its 50-million-barrel-peak in 1988, when it represented over a quarter of the industry’s beer sales.

Meanwhile, Coors Light has gained 1.5 million barrels (1.8 million hl) or 9 percent over the past five years, which were a period of slow but steady growth for the brand.

The U.S. beer industry in 2011 saw volume losses of about 1.5 percent or 3 million barrels (3.5 million hl), estimates Lester Jones, an economist at the Beer Institute.

The reasons for the decline, he says are: 1) increased competition from wine, spirits and non-alcoholic beverages; 2) stalled economic recovery with 21-27 year-old males getting especially hard hit; and 3) shift to higher-end brews that are more expensive but drive less overall volume growth.

The outlook for 2012 isn’t rosy as Mr Jones does not see anything on the horizon that suggests any recovery in volume. In fact, beer volume sales will remain under pressure and will not return to growth until 2014 said Judy Hong, an analyst with Goldman Sachs, in a research note dated 1 December 2011.