By Lara Ozaki

The wholesale industry landscape on Guam has stayed consistently strong in the past two years with import numbers reaching $55 million to $65 million per a month, according to Guam Import Data reports by Guam’s Bureau of Statistics and Plans.

Many of the products sold on Guam come through wholesalers, which import goods from the U.S. mainland, Japan, Korea, Switzerland, Italy, France, China, Taiwan, Hong Kong, Thailand, Australia, Singapore, Philippines and many other countries. More than 50% of the products imported are shipped from the U.S. mainland.

Food and beverage make up around 40% of total imports into Guam.

“Competition is fierce in our island market. For the most part, our customers are always concerned about quality, best pricing and consistent service,” says Hermie Queja, general manager of Micronesian Brokers Inc. Guam.

New players have joined the wholesale market and others have consolidated, while all continue to introduce new products.

One major trend in the past several years that Guam and Saipan wholesalers have noticed is a particular demand in the growth of various beverages — from craft beer to premium wines to sparkling water, which is regaining popularity. Meanwhile, the proposed soda tax bill in the Northern Mariana Islands poses a threat for sugar-sweetened beverages.

Jessica Leon Guerrero

Craft beer craze

“In the past few years, we have seen the craft beer industry grow with new introductions quarterly into the market,” says Jessica Leon Guerrero, sales and brand manager of Island Wines & Spirits, a subsidiary of Mid Pacific Distributors Inc. “This is a trend we also see happening in the U.S. and other parts of the world.”

As Japanese products are generally well-received in Guam, Island Wines & Spirits started distributing four Japanese craft beers last year from Yo-Ho Brewing Co. in Nagano, Japan: Yona Yona Ale, Aooni, Suiyobino Neko and Tokyo Black. The popular Japanese beers were selected after careful sampling of various brews in different regions. Leon Guerrero says she chose the bestselling beers from Yo-Ho first to introduce to the Guam market.

Matt Beck

Distributor Guam Premium Beverages, which began its business in 2014, focuses mainly on the craft beer market.

“The trend has finally caught on. In 2014 when we started, there were only six craft beers on the market in Guam, but now there’s close to 90,” J. Lee Babb, managing director of Guam Premium Beverages, says. “GPB experienced 50% growth in the last year.”

Babb saw the trend in the U.S. mainland and globally for the popularity of craft beers and spent more than two years in preparation for the launch of the initial Rogue line in Guam in 2014.

Lee Babb

“I was with Anheuser-Busch for almost 30 years and oversaw all of the AB operations throughout Asia and the Pacific from 1997 until I retired in 2008, so I was extremely informed of what was going on in the U.S.,” Babb says.

Babb continues to follow major craft beer markets globally. Every morning he says he checks around six websites to see new products, looks at the top 50 craft breweries and talks to contacts he’s developed in the U.S. mainland.

“It was a trend we saw. Everyone’s seen the expansion,” Beck says. “In the bars here, they used to have around six or seven tap handles; now they have around 25 to 35, and the majority is now craft beers.”

In addition to bars, hotels and restaurants are increasing craft beer offerings, says Thomas G. Shimizu, general manager of Ambros Inc.

“Some are even pairing craft beer with menu items as they would with wine,” he said.

In Guam Premium Beverages’ Rogue line, Dead Guy Ale is by far the most popular, Babb says, which is true in the U.S. mainland as well as in most of the 54 other markets the brand is available.

John Antenorcruz

Last year, craft beer made up 12% to 15% of the beer market in the U.S. mainland, Babb says. On Guam it was around 11% of the beer market.

“Craft beer on Guam will be at 15% by the end of next year, and I would project that it will be as big as 30% of the entire beer market between 2020 and 2025,” Babb says.

Saipan follows closely in the craft beer trend, with the launch of distributor Franken Brau Inc. in April and the launch of a line of Saipan-brewed craft beers and ciders from Saipan Brewing Co.

Ernest Mak

“We believe that there is a need and a market for real high-end American craft beer,” says Bruno W. Doetsch, president of Franken Brau.

Franken Brau offers 21 beers from American craft breweries: New Orleans-based Abita Brewing Co., Aspen Brewing Co., Grimm Brothers Brewhouse, Upslope Brewing Co. and Telluride Brewing Co., all based in Colorado. The retail location on Beach Road in San Antonio includes a small tasting area, where customers can sample four different beers at a time.

“We are building awareness,” Doetsch says. Once Franken Brau has established itself on Saipan, the company will be looking to expand to Guam, he says.

Guam is a light beer market, Leon Guerrero says. Such is expected in warm climates, she says, as markets that have seasons, like the U.S. mainland, typically experience a boost in sales of light beers over the summer months.

“We’re used to light beer here. Over 50% of beer sales are light,” Leon Guerrero says. “It’s hot here but they’re sessionable.”

Heineken has been the biggest seller by volume for IWS. “Each year our sales increase, and this summer we are excited to launch Heineken Light,” Leon Guerrero says.

IWS will launch Heineken Light in Guam in July.

Domestic beers continue to be popular, but the fast growth is apparent in the craft beer market.

“Our biggest sellers are Budweiser and Bud Light, but the largest year over year growth has been our craft beer,” says Shimizu.

Tom Shimizu

Craft beer breweries are also moving into producing lagers, which is popular on Guam, Babb says. “Everyone’s looking at the lagers and light lagers here because of the warm weather,” he says. Shipping and sales in Guam is more difficult for craft lagers, as shelf-life is typically nine months or less compared to ales, which can last several years.

“As we’re new, we’re still focused on the Guam market, but eventually we will be distributing in Micronesia,” Beck says.

GPB has distribution rights through Micronesia. “[Our] first moves will be to Saipan, then to Palau. We’re also looking at other regions outside of Micronesia as well,” Babb says.

Push for premium wines

Wine makes up around 13% of alcohol imports to Guam, valued around $350,000 monthly, according to Guam Import Data reports by Guam’s Bureau of Statistics and Plans.

“We have seen the wine market grow and mature. Our market has been more receptive to newer varietals and wine brands from other regions besides California. For example, we have seen a demand for sauvignon blanc and pinot noirs from New Zealand,” Leon Guerrero says. “Consumers are being more adventurous, like with wines from Chile. Five years ago we wouldn’t have had them on the market, and now all of a sudden they’re everywhere.”

Leon Guerrero says every year the Annual Wine Fest gains popularity. While in the beginning IWS was worried about ticket sales, the past several years have constantly sold out. Furthermore, the higher end premium tickets sell out. “Each year it’s growing and growing. We’ve had to pull tickets out the past several years,” she says.

Distributors have commented on the growth in demand for more premium wines.

“Hotels are looking for luxury wines for their customers,” says John Antenorcruz, managing director of Titan Imports. Titan Imports distributes Château Haut-Brion 1er Grand Cru Classé 1855, which ranges from $1,000 to $2,000 per bottle.

“Restaurants are adding more wines to their menu, and customers are looking to try new wines from different countries,” he says.

Wines from St. Francis, Calif., Castello Banfi from Italy and Concha Y Toro from Santiago, Chile, are the more well-known wines and big sellers in the market, Antenorcruz says.

“People are looking more at the health aspects [of drinking wine] as well,” Leon Guerrero says.

Sparkling water on the rise

“Sparkling water sales are going up again after 10 years,” Beck says. “People are starting to be more health-conscious.”

Coca-Cola Beverage Co. started distributing Dasani Sparkling Lime in 2015. The sparkling water line of Dasani is unsweetened, without artificial flavors, juices or calories, according to the Dasani website.

“If [the lime flavor] does well, we’ll introduce other flavors,” says Ernest Mak, director of operations for Coca-Cola in Guam.

United Airlines started replacing Sprite Zero with Dasani’s lime-flavored sparkling water in July 2014 on selected flights world-wide.

Shifts in whiskey tastes

“The American whiskey market is also growing, so there has been expansion into those categories. I have seen the shots industry change from one brand to another,” Leon Guerrero says.

Spirit sales trends in Guam also tend to follow those of the U.S. mainland.

“A couple of years ago, people would take shots of Jägermeister or [Southern Comfort]. All of a sudden it’s now about the Patrón [Tequila] and Fireball [Cinnamon Whiskey],” says Leon Guerrero. “Jack Daniel’s Tennessee Fire cinnamon whiskey is also a popular offering from IWS.”

IWS started carrying Jack Daniel’s Tennessee Fire last year, and Leon Guerrero says Fireball, the Canadian cinnamon whiskey by Sazerac Co., is selling well on the Mid Pacific Distributors side.

“Chivas Regal Scotch Whisky continues to be the biggest brand growing in Micronesia,” Antenorcruz says. He says it now dominates the market in Palau and Pohnpei as the leading premium whiskey.

Moylan’s re-enters wholesale industry

The Moylan’s group of companies launched Moylan’s Wholesale in June 2015. Headed by Vice President Michael Brown, former vice president of Micronesian Brokers Inc., the new branch distributes food and beverage products, including beer, wine and spirits.

“The Moylan family has a long history of doing wholesale business in the islands, and it’s their intent to, once again, be a leader in the wholesale industry…” Brown says.

Pepsi acquires MWD lines

Market Wholesale Distributors closed its operations at the end of April, with some of its product lines going to its sister companies under Calvo Enterprises Inc., with Pepsi Cola Bottling Co. taking the majority.

Pepsi is now distributing packaged foods and dry goods to include Tabasco, Smucker’s, Folgers, Wausau, Devondale and an assortment of Korean products, while some of MWD’s frozen goods, meat products, beverages and bananas have gone to Mid Pacific Distributors Inc. and Pay-Less Supermarkets.

Spicy products remain hot sellers

“The island has a love affair with spicy foods,” says Ramona L. Jones, chief operating officer of Jones & Guerrero Co.

Micronesian Brokers Inc., an affiliate of Jones & Guerrero, started carrying spicy condiments from Heinz when it became Guam’s official Heinz distributor in July last year.

“The Hot & Spicy Heinz Ketchup, infused with Tabasco sauce, is doing exceptionally well in the market,” says Hermie Queja, general manager of Micronesian Brokers Inc. Guam.

Another spicy ketchup popular in the market is the Heinz Sriracha Ketchup introduced together last year, he says.

Spicy products remain popular for snack items as well.

“We’ve noticed that in our Frito-Lay snack line — anything that’s hot and spicy — does so well in the market, like the Cheetos Crunchy Flamin’ Hot and Funyuns Flamin’ Hot,” Queja says.

Spicy flavors sell well for beef jerkies as well, according to Primo Distributors LLC, the exclusive distributor of Jeff’s Famous Beef Jerky.

“We started with 11 flavors. After the first year, we toned it down to six popular flavors. Out of the six, four are spicy. … I’d definitely say the spicy flavors are popular,” says A. Jaron Middleton, general manager of Primo Distributors.

Two of its spicier flavors — Sriracha Style Ghost Pepper and Pacific Red Hot Chili Pepper — were developed in the past year and are very popular, he says. “Our number one seller is the Cranberry Jalapeño.”

Another popular product for Primo Distributors is the local denanche, Pacific Red Hot Peppers, made in Rota.

Customers asking for Angus

Certified Angus Beef is a top seller, says James S. Herbert III, general manager of Triple J Five Star Wholesale Foods Inc.

“The high-end steakhouses use them, like Manhattan Steakhouse, Avenue Steak & Lobster, the Hyatt Regency Guam, Meskla Chamoru Fusion Bistro and the Hotel Nikko Guam. It’s really high-quality beef, the best you can get here,” Herbert says.

Quality Distributors, known for large supplies of meat and seafood, started distributing aged Angus beef from Chicago in May.

“It’s really selling well, especially with the fine dining and hotel customers,” says George Lai, president of Quality Distributors.

Quality Distributors launches Japanese products

Quality Distributors launched a line of Japanese food products on June 7 supplied by Nishihara Shokai Co., a Japanese wholesaler headquartered in Kagoshima. Among the new products are frozen udon, soba and ramen noodles, yuba soymilk skin, seasoned jellyfish, fish cakes, root chips, bonito tataki, wasabi, soup bases, cakes and other desserts like warabi mochi.

“One of my goals is to be a one-stop shop, [so] I needed to bring in the additional Japanese foods. … Before now there was only one company that did Japanese food products, and the market needs competition to have good supply,” says George Lai, president of Quality Distributors. “Customers like to have more than one company to supply, to compare prices.”

Lai says he chose Nishihara Shokai as its supplier for the new Japanese product line as it is one of the largest wholesalers in Japan with more than 100,000 product offerings. Of the first container that arrived in the beginning of June, 60% was purchased within one week. Quality Distributors plans to bring in shipments every month.

Recall of soda tax bill a relief to distributors

Beverage distributors and retailers in the Northern Mariana Islands have been concerned since Rep. Felicidad T. Ogumoro introduced in September House Bill 19-99 on the Health Impact Tax Act, otherwise known as the soda tax act. The act proposed a tax of 4¢ per ounce on sugar-sweetened beverages and similarly to syrups and powders.

The controversial bill, once passed through the House by a vote of 10 to 8 on April 28, was recalled by the House of Representatives on June 7. Ogumoro recalled the bill at the advisement of the governor in order to address concerns raised by the public, according to the governor’s office. Amendments to the bill may be considered in the House.

“Our understanding is that milk is included in the bill. … This will cause a huge increase in milk prices for federal programs like the Women Infant Children program and the school program,” says Rustico Loyola, operations manager for Coca-Cola Beverages Inc. (Saipan).

He says a representative from a theater was one of many who voiced concerns in a meeting with the governor on May 16.

“We are opposed to it,” says Guy Pudney, general manager of Marianas Pacific Distributors Inc. “What that would do on the retail side is double the cost for a case of drink. So we see it as excessive; we see it as being very unfriendly to the business segments.”

Many businesses hope other options will be considered, says Charles V. Cepeda, general manager of Pacific Trading Co.