Heineken said Friday it would roll out Heineken Premium Light stateside this year after a test in select markets. The company declined to offer a more precise timeframe or details.
The Dutch brewing behemoth already makes Amstel Light, which got a 2 percent volume jump in the U.S. market during 2004, reflecting continued strength in both the light and import categories at the expense of standard American suds.
Heavily into light
Light beer accounted for more than 47 percent of the U.S. market in 2004, a gain of three percentage points since 2000, Heineken said. The company cited figures from the Beer Institute.
Light beers traditionally have outperformed the broader beer market since their introduction in the mid-1970s and are likely to continue to do so, according to Tiziana Mohorovic, research analyst with the Adams Beverage Group.
While Heineken and Amstel remain dominant in their respective niches, the company’s U.S. business has come under pressure from competitors — particularly from the resurgent distilled-spirits category — and a weak dollar that has put a tight squeeze on margins. The company already had announced a substantial increase in marketing spending behind its core brands.
One industry watcher said Friday that after years of believing a Heineken Light would be a bad idea, he recently changed his mind.
"I don’t think it will dilute the brand that much anymore because it is kind of expected by consumers," said Harry Schumacher, editor of Beer Business Daily. "The big problem is going to be cannibalization, but I think it is something they have to do if they want to compete with Corona Light and Sam Adams Light."
Sam Adams is produced by the Boston Beer Co., Corona is imported from Mexico by Constellation Brands.
Schumacher said cannibalization rates could reach 60 or 70 percent.
"[But] this will still get some incremental volume — and could bring some women to the brand," he added.
And Heineken’s superpowered distribution system — it is probably the most ubiquitous imported beer both in bars and off-premises — should add a hand, he said.
"This will probably gain [the company] net shelf space," Schumacher said.
Another industry expert was less hopeful about Heineken Light’s prospects.
"In more than one way, they are diluting the brand," said Tom Pirko, president of consultancy Bevmark. "Heineken has a very special position as an aspirational [higher end] brand. Once they start spinning things off, they begin to lose some of that luster."
"If they want to play around and really attack the light category, they would be better off doing it under another brand," he added.
Shares of Heineken fell 1 percent in Amsterdam, in part over concerns about the company’s potential interest in Colombia’s Bavaria, South America’s second largest brewer. Also, Heineken said separately said it’ll cut 240 jobs in France over three years.
Checking in with some other brewers, SABMiller lost 1.2 percent to $16.50, while Anheuser-Busch gave up 47 cents to $47.54. Molson Coors slipped 35 cents to $74.15, and Boston Beer gave up 10 cents to $23.38.
Constellation was down 87 cents, or 1.6 percent, to $52.13.