Presidente beer takes on the import competition in South Florida
Dominican beer known for its white veil of ice is making inroads in South Florida
By Doreen Hemlock
South Florida Sun-Sentinel
April 13, 2008
SANTO DOMINGO, Dominican Republic
Ask for a cold one in this sun-drenched Caribbean nation, and chances are you'll get a Presidente beer. It likely will be "dressed like a bride," with white frost on a bottle stored nearly frozen.
The longtime Dominican sweetheart also has emerged as a favorite in South Florida. It now ranks among the area's top four best-selling imports — its strongest showing outside its homeland.
The story of Presidente's success features an unusual cast: an immigrant family from Spain that got its start in hand-rolled cigars; Americans who launched a tropical brewery; the conglomerate Philip Morris; and a beverage distributor from Pompano Beach.
Their combined efforts now have Presidente nipping at the heels of Heineken, Corona and Beck's in South Florida's import-dominant beer market, setting the stage for the largest Dominican brewery to expand across the U.S. east coast, into Europe and beyond.
"We hope to double our export revenues by 2012, building on our base in Florida," said Franklin Leon, vice president for exports for Cerveceria Nacional Dominicana, or Dominican National Brewery.
Presidente's tale began a century ago, when a Spanish family started a cigar business in the Dominican Republic. In 1969, U.S. tobacco giant Philip Morris partnered with the thriving Leon Jimenes clan to grow tobacco and make Marlboro cigarettes.
Philip Morris owned Miller beer and in 1983, the partners moved a factory from Alaska to the Dominican Republic to make brews there. They soon bought the biggest Dominican brewery, launched by U.S. businessmen in 1929 and maker of market leader Presidente.
The brewery had gained a mass following starting in the 1930s, largely because of iceboxes. Brewery owners had seen lines form at a chain that sold beer extra cold. With iceboxes costly for retailers back then, the brewers offered to finance them. Presidente sales soared, as clients sought out "the bride" or what some call "ash" frost on bottles kept at nearly freezing temperatures.
Exports were nary a thought until Dominicans began migrating en masse, especially to New York. Some would take cases of Presidente with them. The brewery launched a chubby bottle for export, but the effort failed as Dominicans in New York sought the original longneck.
Presidente tried again, this time selling the original in South Florida. The area has a preference for imported beers because of its large foreign-born population and position as an international trade hub.
Challenging the giants
Across the United States, imports last year accounted for 14 percent of beer sales by volume, up from about 7 percent a decade earlier, according to Beer Marketer's Insights, a newsletter based in Nanuet, N.Y.
But in Broward and Miami-Dade counties, imports now make up about 65 percent of beer sales, said Art Friedman, president of Gold Coast Beverage Distributors of Pompano Beach and Miami, Florida's largest beer distributor.
Presidente started out small in South Florida in 1991, using the same distributor as Miller and targeting mainly the Dominican community, a group of perhaps 30,000 people at that time, according to the U.S. Census.
Sales were roughly 40,000 cases the first year, with little spent on marketing, Leon said.
Competing head-to-head against leading imports Heineken and Corona was out of the question. The brewer could not afford multimillion-dollar outlays on marketing. It sponsored some Dominican festivals and later, bought a few radio spots on Spanish-language radio to crossover mostly to Cubans who lacked a beer in South Florida imported from their homeland, said Leon.
Export sales grew slowly — until Gold Coast acquired the company's Florida distributor in 2001 and sought to expand beyond Hispanics. It relied mainly on $1-off coupons to position the beer slightly cheaper than other imports and on big supermarket displays to boost visibility.
"They're a great trade up for a Bud drinker, but not as high priced as Corona and Heineken," Friedman said. Retailers expanded shelf space for what's promoted as "Caribbean beer," because higher-priced imports offer larger profit margins for vendors, he said.
Last year, Presidente sold about 1 million cases in Florida. The brewery's sales topped 41 million cases in the Dominican Republic, Leon said.
But competition is rising. In the Dominican Republic, the makers of Brazil's Brahma beer recently built a factory, seeking to steal some of the brewery's 90 percent market at home. And in Florida, it must keep pace with innovations. The brewery recently launched a light beer and cans and soon will introduce a draft and an 18-pack, Friedman said.
To compete, the Dominican National Brewery has built a larger, more high-tech headquarters in Santo Domingo, at a cost estimated at roughly $400 million. The complex spans more than six square blocks, with its own water treatment plant, electricity plant, computerized brewing operations and 31 beer fermentation tanks — each about five stories high.
Dominican partners in 2006 took over Philip Morris' stake in the brewery, swapping their share in Marlboro operations. To help fund the deal, the brewery is selling about $134 million in bonds, its first issue in the Dominican market.
Still, the gap between a family-owned brewery starting to export from a country of 9 million people and global leaders remains huge. In the United States last year, Mexico's Corona sold 8.3 million barrels and Heineken 5.3 million barrels — each containing 31 gallons. That compared with just 110,000 barrels for Presidente, which sold little outside South Florida and New York, said Beer Marketer's Insights.
Yet for South Florida consumers, there's no denying the allure of the Dominican bride.
Cuba-born waiter Luis Miguel Bedia, 47, said he serves plenty at trendy Miami restaurants and also drinks it at home — chilled to limit its foam. He likes its consistency, reasonable price and the bottle design. Most of all, said Bedia, "It tastes good."
1 million
Cases of Presidente beer sold in Florida
14 percent
Imports as a share of U.S. beer sales by volume
65 percent
Imports as a share of South Florida's beer sales by volume
4,300
Employees at the company that makes Presidente, including some at a South Florida office
:cheeky:
