Beer Marketer's Insights
A UK brand called Gunna that employs cocktail cues to reinvent canned soda category is readying its assault on US after garnering rep as fastest-growing craft brand in home market. Inspired by cofounder/ceo Melvin Jay's infatuation with "characterful and complex" drink called Gunner that was mixed by barman at his golf club from ginger ale, lime and bitters, the brand offers vitamin-inflected sparkling lemonades that are boldly branded under flavor names like Ginger Rebel (ginger, lemon, lime and aromatic herbs yielding "uniquely sweet, sour, bitter and spicy flavor profile") and Turtle Juice (inspired by a mango daiquiri recipe encountered in St Lucia, with mango, lime and hint of coconut).
Incubation house LA Libations has added another to its broad span of corporate alliances, this time can-making giant Ball. The new partners will work to spot bev trends and hot brands with view to seeing which of Ball's expanding range of solutions might be a good fit, tho the alliance stops short of any kind of "most-favored-nation" kind of arrangement. In a discussion earlier this week, Ball coo Ron Lewis said the can maker was hoping that Libations' clearly demonstrated knack for harnessing emerging trends would fortify Ball's ability to establish ties to promising players and categories that may not have existed in a meaningful way even a few years ago, like NA beers and canned waters, and assess whether they work in a can and how to go about filling it. The alliance doesn't specifically address an issue that's kept some new brands away from cans, the steep order minimums the big canmakers require. "This is not about who gets a deal," said LA Libations cofounder Danny Stepper, but rather about Libations serving as Ball's sherpa in emerging bev space. Libations, of course, fills that role most prominently via collaboration with its minority investor Molson Coors but it's also seeded new brands into other systems, including KDP and Anheuser-Busch. Lewis said Ball has been relying on Stepper for advice going back to last year as it continues to build out its capabilities, including digitally printed cans that should be headed to US in future. Of course, like other canmakers, Ball has been outspoken on how shift to cans is fundamental one that rests on that substrate's recyclability, ease of shipment, product protection and high-end graphic attributes.
DrinkPak, which set plans for massive can copacker near LA during heart of pandemic, has seen demand explode to point that it just launched 3d filling line that would rank among fastest in world, is installing lines #4 and #5, and is in final stages of securing site in Dallas/Ft Worth area on which to erect a 7-line plant at investment of $380 mil. Among features of that plant, with capacity of 4.1 bil cans annually, will be twin lines that fill cans for makers of dairy bevs and plantmilk bevs respectively, scarce commodity for protein shakes, plantmilks and other classes of bev that usually have to go into PET bottles or aseptic boxes. Both plants also are addressing another pain point: need for in-line configuration of variety packs.
Energy drink Celsius continued its great growth last yr as it switched over from mostly beer distribs to Pepsi's (mostly self-owned) distribution network after Pepsi took stake. Revs up 108% to $653.6 mil in full yr 2022. But Celsius reported operating loss of $157.8 mil, including termination expenses totaling a whopping $194 mil. Celsius govt filing indicates that Pepsi funds paid to Celsius were more than sufficient to cover termination fees. Still, that's a whole lot of money to spend just getting rid of the guys/gals that originally built the brand.
Both AB InBev subsidiary Cerveceria Modelo de Mexico and Constellation rehashed many familiar arguments in new light thru opening remarks and ABI's first 3 witnesses taking the stand for first two days of trial in NY Southern District court. Judge Lewis A Kaplan set the stage, prefacing that case is about terms defined in the contract and the "express intentions of the parties at the time they signed" the contract. Legal arguments just need to tip the scale "ever so slightly" to win case, he underscored to the 8-person jury shortly before ABI team's opening remarks.
Control State Spirits Volume Up 3.7% in Jan with Stronger Pricing; Cases Flattish for 12 Mos
Better start to 2023 for spirits sales in control states, after soft Dec. Total volumes up 3.7% and $$ up strong 7.8%, NABCA reported this morn. So price mix up over 4% in Jan, a continued improvement from Nov-Dec and over 2x rate posted in Oct. Better Jan trends even more notable as org reported 2 fewer selling days. But comp was relatively easy (cases down low-singles, $$ flattish in Jan 2022). For 12 mos, control state spirits volumes off 0.1%, a half-pt improvement from Dec, and $$ up 2.7%. Tequila even stronger at start of 2023 in control states, up 20-30% by volume and $$, and cocktails still up 35-40%. But even vodka volumes up near 3%, while domestic whiskey up near 2%.
Another Shipments Stinker in Jan 2023; Taxpaids Down 4% vs Extra Easy Comps, BI Estimates
Despite better volume trends in tracked off-prem channels for the mo, domestic beer shipments continued to slide in Jan 2023, Beer Institute reported. Taxpaid shipments dropped an estimated 4.4%, 500K bbls to 11.1 mil bbls total. That's going against a near-12%, 1.55-mil-bbl drop in Jan 2022 vs 2021. So Jan taxpaids shed over 2 mil bbls, -15.6% vs inflated 2021 total. Still down nearly 11% vs Jan 2019 and 2020 levels too.Recall, total beer volume (including imports) dipped just 0.3% in IRI multi-outlet + convenience channels as $$ jumped 7% amid carry-over price increases. So $$ are a different story. But the volume picture remains bleak these days, especially for domestic brewers. Anecdotal reports mixed, but Feb much better for some distribs.
Stay up to date on the latest trends and forces shaping the fast-changing US beer biz at the 2023 Beer Insights Spring Conference, coming to Chicago this May. Just added to our stellar program: a deep dive into key drivers of distrib M&A with OMAC Bev Advisors and a panel of industry attys exploring the consequences of convergence and increasing govt activity. Connect with key industry leaders at this exclusive event. Register today!
NY Southern District Judge Lewis A Kaplan set stage for ABI/Cerveceria Modelo de Mexico vs Constellation, prefacing that case is about terms defined in the contract and the "express intentions of the parties at the time they signed" the contract. Legal arguments just need to tip the scale "ever so slightly" to win case, he underscored to the 8-person jury shortly before ABI team's opening remarks. Judge already seems noticeably testy and impatient, especially with STZ legal team, INSIGHTS observed. On day-2 of the trial, judge chastised STZ legal team for filing motion after midnight on Thursday morning, declaring that "the avalanche of letters [from both sides] stops now." There were also several instances where Judge made comments and interruptions during Constellation's interrogations of witnesses in attempt to speed up the process.
Neither "beer" nor the "beer category" have a "'fixed and invariable' meaning," a NY-based fed judge wrote earlier this mo. That order and numerous others limited scope of trial that kicked off in NYC this wk, pitting ABI's Mexican subsidiary Modelo against Constellation over intro of Corona and Modelo branded hard seltzers. And ironically, for a dispute that at first seemed to ask "what's a 'beer' and what ain't," jury tasked with deciding case won't hear how dictionaries or industry members answer that question.

