Beer Marketer's Insights
Carlsberg Posts Strong Yr Aside from Russia Write-Down; 2023 Will Be "Another Challenging Year"
Number 3 global brewer Carlsberg finished 2022 with solid results, but it swung to a net loss and sounded the alarm for a difficult year ahead. The Danish brewer reported organic volume up 6% last yr with organic revenue +16% to about $10.1 bil USD. Revenue per hectoliter grew 9%. And organic oper profit jumped 12% to over $1.6 bil, on 16.3% margin. Excluding Russia, co's results were well ahead of 2019 levels: volume +9%, revs +20% and oper profit +22%. But net profit fell $152 mil vs yr ago, driven by roughly $1.4 bil write-down on its (still-for-sale) Russian biz.
Count an early win for team beer in 2023 tax battles. North Dakota state legislators reportedly rejected a bill to reclassify liquor products under 12.5% ABV as wine and reduce their tax rate. Decision follows joint letter from BI, BA and NBWA last mo. Beer Institute praised the move in statement this afternoon: "We are pleased the North Dakota House rejected HB 1303," said prexy and ceo Brian Crawford. "Legislators were wise to reject this handout for big liquor - saving significant tax revenue while protecting North Dakotan brewers, agricultural suppliers and consumers," he added. Tho more proposals to lower RTD taxes or expand access likely to crop up, including recent bill in CA.
Good news for beer industry: lotsa folks plan on buying beer, watching the Super Bowl and paying attention to ads too, per Numerator analysis of ~ 2K consumers. Three in 5, 61% plan to watch the game, with a whopping 95% planning to do so at their home or a friend's house. Only 5% will be watching on premise or another "public space." A good sign for sales: beer (47% plan on buying) is top alcohol choice over wine (28%) and spirits (24%). Also, while 68% said inflation will impact their purchases for Super Bowl, less than 20% plan on trading down to lower priced brands.
AB Spent Most of Any Co on Super Bowl Last 2 Decades; TAP Praised as "Really Smart" by WSJ
In last 20 yrs, AB spent by far the most of any advertiser on Super Bowl, WSJ video shared on Yahoo showed. AB spent almost $450 mil, nearly 3x #2 spender, none other than Coca-Cola, estimated Kantar. But it gave up exclusivity for first time in 33 yrs. There will be 80-100 ads on the Super Bowl, totaling about 50 minutes. Fox has sold out its inventory, multiple articles said today. AB is still buying 3 minutes or 6% of ad time.
Increasingly, malt-based seltzer segment is mostly about 1 brand. White Claw climbed to 55.5 share of $$ in declining segment last 4 weeks. It got over 50 share even if you include still small, but fast growing spirits-based seltzers. White Claw $$ sales up 9.6% for 4 weeks thru Jan 29 in Jan IRI multi-outlet + convenience, while malt-based seltzer down 12.5%.
Imports Finished Strong in Dec; +5% with Huge Dutch Gain; Total Imports Up 0.6% for Full Year
While domestic taxpaids plummeted double-digits in Dec, beer imports posted solid 5% gain for the mo, Beer Inst reported citing US Dept of Commerce data. So total imports grew 0.6%, +250K bbls for the year. That includes beer imports up 3%, NA beer +5%, hard cider down 16% and perry, mead and "not elsewhere specified or included" imports down 43%, the latter including various beyond beer imports like Corona Seltzer.
When advocating for policies designed to reduce alcohol consumption, many in the public health community point to low awareness of links between drinking and risks for long-term health problems, especially cancer. But "most of us also don't realize that poor social health is just as, if not more, harmful than smoking, drinking, being obese, sedentary living and exposure to poor air quality." So writes Kiffer George Card, asst professor of health sciences at Canada's Simon Fraser Univ in op-ed published by The Conversation a couple wks ago. Because drinking can aid social health, he argues that the "social benefits of alcohol use" and the way they accrue to our mental and physiological health should also be considered.
Reed's Inc, struggling to get on consistent growth path while cutting its burn rate, has recruited Fevertree vet Chris Burleson to newly created role of chief customer officer. Chris, who would seem to be former colleague of REED chmn John Bello at Adina, essentially is taking role of longtime sales mainstay Neal Cohane, who's segueing to managing co's ginger candy portfolio, ceo Norm Snyder told us. That's well-regarded line that's been a casualty of co's need to focus on biggest potential growth drivers, including canned versions of its core Reed's and Virgil's soda lines, Ginger Ale entry that's just a few years old and alc entries. In cco role, Chris will manage not just sales org but partner with ops team on supply chain and cost reduction efforts. That area is led by recently elevated ops vp Damian Warshall, a vet of Virginia bevcos like Wild Wolf Brewing, Lumi Juice and RTD coffee marketer Snowing in Space. Together, they bring "a shot of energy and a bit of a youth movement," Norm said. By virtue of his 4 years at Fevertree, Burleson will be closely familiar with Reed's, tho he played in that category earlier too at Jones Soda; his other affiliations have included Activate Drinks, Popwater, Voss Water and, most recently, close to a year at Kin Euphorics. As a former competitor, I know there is significant opportunity to expand our customer base, reach new consumers and generate profitable growth," per statement from Burleson.
Coca-Cola offered more details behind its sweeping Sprite revamp, unveiling first global TV campaign behind Sprite Zero Sugar entry. With Coke consumer researchers having unearthed the insight that Gen Zers prefer "to skip the excess and get to the essence of things," new campaign depicts (arguably rude) Sprite drinkers drowning out their talkative companions with the hiss of carbonation unlocked by the twist of the cap. "Ticket to Madison you say?" middle-aged railroad clerk says to young ticket-buyer. "I knew a girl from Madison once. We used to summer together . . ." Psssht! And he's not heard from any more. Another spot shows young woman drowning out the font of trivial gossip from her talkative friend the same way. All offer lingering shots of new package, in which co has dropped green plastic for clear on sustainability grounds while offering up crisp look of black letters on deep green background, new look heading onto shelves now. The message, per announcement: "In a world full of distractions and non-essentials, Sprite Zero Sugar is here to provide the essential crisp lemon-lime refreshment of Sprite, and none of the sugar."
A year ago, setting priorities for new year, Olipop cofounder David Lester talked about such possibilities as move into adjacent segments related to digestive health (BBI, Feb 1 2022). That was then. In intervening year, co entered Target and over past 12 weeks soared to top-selling role in refrigerated set. Its move into Walmart made that retailing giant its best customer (at margin-maintaining EDLP of $2.48). Sales in 2002 tripled to somewhere in range of predicted $100 mil run rate. So far Olipop PBC has been able to maintain that growth trajectory via straightforward devices like flow of well-crafted flavor extensions (as with Cherry Cola exclusive to Target) and TikTok activations (Camila Cabello's romp inside Walmart store in TikTok stunt that's generated nearly 1 mil likes), making forays into new segments no longer worth the risk. Why not just continue to ply consumers who've already demonstrated the core brand's market fit? "We need to show we can keep scaling rather than thinking up crazy new ideas," said Lester, an innovation vet from Diageo who knows well the tradeoffs involved.