THE GIST
By definition, America’s imported beer category is as vast in brands as it is geographic origins. But in reality, most of what sells is not: Mexican beers make up 80% of all volume imported to the U.S., according to government data cited by the Beer Institute (BI). While the entire category has been a lone bright spot in terms of growth amidst beer’s slow decline, imports’ perceived success is essentially based on what’s shipped from one country, obscuring what’s happening with beers from Belgium, Germany, Japan, and elsewhere.
Corona Extra, Modelo Especial, and Pacifico make for exciting stories, but removing Mexican brands from the equation paints a more complicated picture of the category. Long-tenured brands from European countries are fighting to maintain relevance, while Asian breweries are trying to capture the same kind of excitement for their Lagers as the ones coming from Mexico. Success for the category as a whole, then, shouldn’t be misinterpreted as success for all its constituent brands and countries of origin.
WHY IT MATTERS
The complexity within imports is a product of larger trends within beverage alcohol. Drinkers are “trading up” to more premium brands—which European beers once typified—but now can choose spirits-based canned cocktails, hard kombucha, or any number of other high-end products that didn’t exist a decade ago. Similarly, where imports once offered U.S. consumers flavors they couldn’t find within domestically produced beer, craft beer now offers them every flavor under the sun. Today, imports are generally struggling to differentiate themselves—unless they’re Mexican beers, like Corona, that have become successful lifestyle brands stateside.
Today eight out of every 10 foreign beers sold in America are from Mexico, up from seven just three years ago. The next-largest exporter of beer to the U.S., the Netherlands (home of Heineken), exports just 11% of what Mexico does.
Mexican beer’s success is what’s propelled imports to become one of the brightest categories within beer, where sales are otherwise lagging this year:
Imports grew their sales-to-retailer volume (beer sold by importers and distributors to stores) by +6.4% this summer between May and August, as measured by the BI.
Total beer, including hard seltzers and flavored malt beverages, saw its sales to retailer volume drop -1.2% during that same period.
In the most recent 52-week period tracked by market research company IRI, imports increased their volume of beer sold by +1.7% while the entire beer category declined -5.2%. Only one other category—premium plus, which includes Michelob Ultra—showed any growth at +0.8%.
Victoria, a Lager brewed in Mexico, was the fastest-growing beer brand in August on alcohol e-commerce platform Drizly.
In essence, the category of imported beer is Mexican beer. This subsegment of beer has posted white-hot sales numbers this year, but those spoils have gone to a narrow group, most of which are owned by one company.
Generally, these Mexican beers’ U.S. sales belong to Constellation Brands, whose portfolio of Corona Extra (+10% in chain retail in the 12-week period ending Sept. 7) and Pacifico (+40%) and Modelo Especial (+17%) appears unbeatable. Those imports are bucking the overall beer trend, with Modelo Especial setting itself up for a generational change. Based on its growth rates—which have already made it the #2 beer by sales in chain retail—it stands to oust Bud Light and become the top-selling beer in the country by the end of the decade.
But heat isn’t just coming from immediately south of the U.S. border. This summer is further continuation of a long, hot burn for imports:
Adjusting for changes in brewing locations for some Belgian and Polish brands (more on that later), volume shipments for imported beer grew +4.4% in July 2020 compared to July 2021, and imports year-to-date are up +8.8%, according to government data cited by the BI.
Mexican beers again outpaced these larger trends, growing +12% year to date.
Japan is currently the 15th-largest importer of beer by volume to the U.S., behind South Korea and Poland, and its import volume is up +82% through early July versus last year’s total sales at that time. So far this year, the U.S. has imported 25,151 barrels of Japanese beer—equivalent to the total annual production of Durango, Colorado’s Ska Brewing Company last year. Five years ago, that figure was 29,772 BBLs. It’s not an encouraging trendline, or a vote of confidence in imports generally, to remain in the same ranked place while selling less beer.
This is broadly the story of Japanese imports; companies like Sapporo, Kirin, and Asahi have historically been minor players in the U.S. beer scene. But their influence in North America will soon no longer be dominated by exports, but beer they brew here. Eyeing rapidly declining consumption in their home country—7.8% of Japanese people in their 20s regularly drink alcohol today, versus 20.3% in 1999—the two companies envision the U.S. as a potentially lucrative market for their Lager-heavy portfolios.
They’re likely watching two trendlines in U.S. beer: a decades-long decline in market share for domestically produced macro Lagers, and a more gentle plateauing of craft beer. There would appear to be white space for the taking, but it’s not only going to be filled by Sapporo, Asahi, or Kirin’s standard Lagers. Instead, they’re also diversifying their portfolios to hedge bets:
Reuters reported last month that Asahi is weighing “a full-scale push” into North American markets; it currently has no production facilities in the region.
Sapporo—fresh off its acquisition of Stone Brewing—has set a goal of producing 360,000 BBLs of beer in the U.S. next year between Stone and Sapporo brands. That’s 40,000 more BBLs than all of what Stone produced in 2021, according to most recent data reported to the Brewers Association trade group. If accomplished, brewing that much would make Sapporo close in production size to what Artisanal Brewing Ventures produced in total last year through its portfolio of Victory Brewing Company, Southern Tier Brewing Company, Sixpoint Brewery, and Bold Rock Hard Cider.
Kirin, through its subsidiary Little Lion World Beverages, owns New Belgium Brewing and Bell’s Brewery—the latter of which opened two new territories of distribution this summer as it aims for complete national penetration. New Belgium, meanwhile, is showing tremendous growth, adding +16.3% in dollar sales in IRI’s most recent 52-week period while selling in chain retail the #1 IPA (Voodoo Ranger Imperial IPA), #1 new craft brand (Voodoo Ranger Juice Force), and #1 pumpkin seasonal (Voodoo Ranger Atomic Pumpkin).
The common thread: All three Japanese companies aren’t solely banking on U.S. drinkers’ thirst for Rice Lagers. Those brands are doing fine, with Kirin up +5.7% and Sapporo up +9.6% in chain retail in the most recent 52-week sales period. (With their parent companies making inroads via U.S. beer brands, that bump could also be explained by wholesalers paying greater attention to those companies generally, securing them wider shelf placements.) But Rice Lagers may just be one prong of a multi-angle approach. Sapporo can lean on Stone; Kirin has its two homegrown U.S. beer brands; and Asahi tells Reuters it would “consider brand acquisitions or working with start-up companies” in North America.
It’s likely that Japanese beers will remain a small subset of U.S. imports, while Japanese companies exert their influence on U.S. beer through brands more resonant stateside.
Before Mexican Lagers led the import pack, there was Stella Artois and Heineken. These Pale European Lagers dominated imported beer sales in the 1990s and early 2000s by convincing U.S. drinkers that they were more sophisticated, higher-end choices than Budweiser or Coors—but still tasted like the maco Lagers American drinkers frequently consumed. For some Americans, the idea of “imported beers” became synonymous with class during this period.
Major caveat, though: Stella Artois, owned by Anheuser-Busch InBev, has been brewed in the U.S. since 2021, meaning it lost its “import” status in U.S. government data. (That’s in part what created the abnormally large year-over-year declines for Belgian beer in the import data cited earlier.) The brand still boasts of its “time-honored Belgian recipe” but is transparent about its U.S. provenance. It’s unclear whether drinkers care about Stella Artois’ birthplace: 2020 and 2021 were the brand’s most successful sales years in chain retail, with 2022 plateauing back to 2018 and 2019 sales levels.
Over the past decade, Heineken and Stella have lost their European “je ne sais quoi” (or “ik weet niet wat” in Dutch) and taken a backseat to more popular Mexican beers:
From 2010 to 2015, Stella Artois was the second-fastest-growing imported beer brand behind Modelo Especial.
Stella Artois’ chain retail sales have hovered between $400 and $500 million since 2017.
Heineken’s imported brands earned $1.7 billion in the same stores last year.
Meanwhile, Modelo’s sales skyrocketed to more than $3.3 billion last year. As Scott Scanlon, executive vice president of beverage alcohol for IRI put it to Beer Business Daily in mid-September: “[Modelo’s] brand dominance sees no slowdown.”
Both Stella Artois and Heineken saw dollar sales decline in U.S. chain retail in 2021.
There are signs other European imports see an opening: Earlier this year, Peroni Nastro Azzurro (owned by Molson Coors Beverage Company) set an ambitious goal of doubling its volume by 2025 in part by competing directly with Stella Artois. Peroni would need to grow at an extremely rapid rate to meet this goal; essentially, it would have to become one of the fastest-growing beer brands, bar none. Still, its sales so far in U.S. chain retail are roughly 10% of Stella Artois’ sales.
Bright sales spots for Stella Artois and Heineken this year have both come from relatively new products:
Heineken was -5% in chain retail sales over the past 52 weeks, but Heineken 0.0—launched in the U.S. in 2019—was up +9% during that same time. (It’s still 12 times smaller in sales volume than standard Heineken.)
The Stella Artois brand family is down -6.5% in the past 52 weeks, but has recently introduced a variety pack and spinoffs including Midnight Lager and Solstice Lager that outperform the standard Stella Artois.
As U.S. drinkers have more premium options than ever—from spirits-based canned cocktails to craft beer—familiar “imports” like Stella Artois and Heineken perhaps have lost a bit of their elevated reputation. To combat this, the brands appear to act somewhat like smaller breweries, by introducing seasonal and limited-edition beers to give drinkers a new reason to return to familiar brands.
Specialty European imports that are considered some of the best versions of their styles—Hefeweizens, English Barleywines, and Helles Lagers—remain relatively low percentages of the overall import market:
German breweries ship just a fifth of what their counterparts in The Netherlands—essentially, Heineken—send to the U.S.
Beer that comes from the U.K. is a little less than 2% of what is sent by the Dutch.
Belgium’s numbers are thrown off for this period due to the U.S. onshoring of Stella Artois production.
But these specialty beers have, over the past three decades, played an outsize role in craft beer drinkers’ appreciation of global styles. Brands like Samuel Smith and Ayinger, for example, offered U.S. beer drinkers their first tastes of Oatmeal Stout or Doppelbock. Today, these are styles that U.S. breweries produce, and drinkers have orders of magnitude more beer style choices than they ever have before. That’s created a more modest market for specialty European imports, former Merchant du Vin marketing director Craig Hartinger said in 2020. (He has since retired from his role at that importer.) Year-to-date volumes from the U.K. and Germany are +3% and -8%, respectively, versus this time last year.
“A beer can be globally respected, but great beer doesn’t mean sales success [in the U.S.],” Hartinger said at the time.
He also cited distributor consolidation as especially hard for specialty European brands. These beers aren’t huge volume movers—compared to Budweiser or even Sierra Nevada—so their specialty nature often gets lost in a wholesaler’s wider portfolio.
“You’re a distributor sales rep with 200 beers, and you’ve supposed to sell beers down at the bottom of the [sales volume] list that you’ve maybe never even tasted? That makes it hard,” Hartinger said in 2020.
Success, then, for some very niche brands is quite modest. He gave the example of Traquair House Brewery, a Scottish brewery with history dating back to the 18th century. Increasing U.S. sales by just a few hundred cases per year, Hartinger said, would be considered “a win.” Compared to the millions of cases of Modelo Especial already sold in the U.S. this year, it’s a stark example of the wide gulf in scale among imported brands.
Words by Kate Bernot