The San Juan Star / June 21, 2004
By Larry Luxner
SANTO DOMINGO — With a virtual monopoly at home, the famous Dominican beer brand Presidente has begun looking more seriously at the U.S. and European export market.
Cervecería Nacional Dominicana S.A. (CND), the conglomerate that brews Presidente, is increasing its export efforts in Europe and expanding from the East Coast in the U.S. to Illinois, Texas and California.
In the Dominican Republic, it's difficult to find a beer that doesn't carry the Presidente label. CND controls 98% of the Dominican beer market through Presidente (95%) and three other brands with together comprise 3%; Heineken and Bohemia, brewed locally by CND, and Miller, which the company imports.
Most of the remaining 2% is controlled by CND's only local competitor, Cervecería Vegana, which brews Quisqueya and Soberana. A very small quantity of imported beer, mainly Beck's and Corona, finds its way into the Dominican Republic, and is consumed mainly by tourists.
According to Franklin León, vice-president of business at CND's parent group León Jimenes S.A., CND was established by U.S. businessman Charles H. Wanzer in 1929. The company's first beer brands were Colón and Reina; in 1935, it introduced the Presidente label. In 1985, the León Jimenes group — which until then was known mainly for cigars — acquired a majority stake in CND. Since 1993, CND has been headed by Rafael Menicucci, who is also a vice-president of the parent firm.
According to company officials, annual group sales total $600 million, with beer comprising around 82% of that amount. CND employs more than 2,000 people and produces 2.8 million hectoliters of beer per year at its Santo Domingo brewery. Except for the water, labels and bottle caps, CND must import everything, including hops and bottles.
León, 48, is a great-grandson of León Jimenes, who founded the parent company in 1903. He notes that per-capita beer consumption in the Dominican Republic stands at 38 liters, down from 42 liters in 2000. That's somewhat less than the average for the Caribbean (48 liters) and half that of neighboring Puerto Rico (78 liters).
"In 2001, we had a big price increase, because the tax went up by 25%," said León. A 12-oz. bottle of Presidente currently retails for RD$30.00 (about 63 cents), while a 22-oz. bottle costs RD$45.00 (about 94 cents). "Beer is very sensitive to price increases, and sales tend to recuperate very slowly after a price increase," he said.
CND is among the Dominican Republic's top 10 advertisers, spending over $5 million annually on radio and TV commercials, billboards and sponsorship of a variety of cultural and sporting events. Alcohol is freely consumed in the Dominican Republic — often by teenagers — and laws prohibiting beer sales to minors are rarely enforced. Few official restrictions are placed on CND, though León says company policy is to advertise Presidente on TV only after 6 p.m.
Santo Domingo and its environs account for about 60% of Presidente's domestic market. The remaining sales are made in secondary cities like Santiago de los Caballeros and San Pedro de Macoris, and in tourist resorts like Punta Cana, Puerto Plata and Sosua.
A growing percentage of Presidente's total production is exported. CND began shipping Presidente beer to Miami in 1991, selling 75,000 cases in the first year alone. In 1995, the company expanded to the New York-New Jersey area, home to an estimated 1 million Dominican immigrants.
CND now sells over half a million cases a year in New York, and an equal amount in Florida. The company's original Florida distributor was Miami-based J.J. Taylor, which has since been acquired by Gold Coast Distributors. Interestingly, 40% of the Presidente beer sold in South Florida goes to non-Hispanics, compared to 20% of the company's sales in the New York area.
"We already did the crossover a few years ago, and now our beer can be found in Anglo accounts as well as Hispanic accounts," says León. "This year, we'll export over 1.5 million cases. We're opening up new markets, and we're trying to cover the entire U.S. East Coast. We're working on a new structure and getting well-prepared people. We recently started with Atlanta and Chicago, and will soon expand to Texas and California."
León added: "Europe is going to be our second major beer market for exports. That's because 80% of the tourists who visit this country are Europeans. They already know the beer, they've tasted it and they like it."
In addition to the U.S. mainland and Europe, key export markets for Presidente beer are Puerto Rico, Haiti, St. Maarten and other Caribbean islands that are home to large numbers of Dominicans.