Beer Marketer's Insights

Beer Marketer's Insights

More stumbling blocks getting in the way of those looking to broaden the market for cannabidiol (CBD) food and bev products. After convening "a high-level working group," the US Food and Drug Admin (FDA) concluded that existing regulatory framework used for foods and supplements cannot be used for CBD products, per principal deputy commissioner Janet Woodcock. Instead, "a new regulatory pathway for CBD is needed, that balances individuals' desire for access to CBD products with regulatory oversight needed to manage risks."

There was lotsa talk about a tuff December to close out 2022 across the industry, but this is way worse than what most folks. Domestic taxpaid shipments declined 14%, shedding nearly 2 mil bbls in a single mo, Beer Inst estimates. That's historically soft and suggests top domestic brewers took particularly tuff hits on shipments to close out the year. Even while going against easier comps with taxpaids down 5.5% in Dec 2021 vs 2020.

This week in 1979, INSIGHTS reported Michigan’s recently enacted 21 minimum age drinking law was upheld by State Court. Judge ruled the state has “full power to fix and change the age of the majority,” as it does for driving age, running for office or collecting social security benefits. Judge even implied that Michigan could justify upping the minimum age to 24 if it chose to. Meanwhile in Illinois, legislators were considering upping drinking age to 21 statewide, as there were some towns that had already made that move. Cook County had just gone 21. In Chicago, city officials raised age to 21 to take home beer but you only had to be 19 to drink on premise. By 1984, US had federal minimum age of 21.

Many execs and employees of Pabst, General and Pearl Breweries (and distribs of those brands) were wondering what future held as INSIGHTS reported death of owner Paul Kalmanovitz this week in 1987. Lutz Issleib, his right-hand man, who had just been named Pabst prexy, “becomes the man who runs the empire as executor of the estate,” wrote INSIGHTS. Mr. K led an incredible life that made him millions. He came to US from Poland after World War II, working in parking lots, taverns and garages in Calif. He met a man who sold bulk whisky to bars/taverns, and who also eventually owned Maier brewery, wrote INSIGHTS. Mr K owned part or all of 29 taverns in Los Angeles as he worked his way into brewing industry. In early 70s, he bought Lucky Brewery in Vancouver; took control of Falstaff in 1975, then bought Pearl in 1978 and Pabst in 1985. Mr K “followed a 3-pronged approach to biz: (1) don’t throw good dollars after bad dollars to support a dying brand; (2) cut all sales and marketing costs to the bare minimum; (3) raise prices to the point that Mr K’s companies made more money; despite severe volume dropoff.”  While that approach built his net worth to ~$250 mil, his beer volume sank from 21 mil to 8.5 mil bbls, and tho he gained “extraordinary wealth,” many of his distribs “were hurt by declining brand sales and lower profits.”  Recall, Kalmanovitz Foundation didn’t sell Pabst to Dean Metropoulos til 2010. 

This week in 2002, during Louis Camilleri’s first conference call as incoming Philip Morris ceo, INSIGHTS noticed shift in PM thoughts on Miller. “Our focus has been on the turnaround plan” at Miller and that “hasn’t changed…John [Bowlin] and his team have actually done a terrific job,” said Louis. He also expressed hope that new products would help lift Miller sales but added: “Having said that…we’re not oblivious to the consolidation within the brewing industry and we will explore any options that are in the best interests of shareholders and beyond that I can’t comment.” That was big change from chmn Geoff Bible’s vehement denials that PM would consider selling Miller. It announced a deal with SAB 4 mos later.

This week in 2005, INSIGHTS reported on “stunning verdict” totaling $105 mil against stadium bev and food vendor Aramark Corp. Co was hit with $30 mil judgement and another $75 mil in damages when jury found Aramark responsible for a fan’s DWI accident after leaving Giants Stadium that left a 2-yr old girl paralyzed.  “That’s biggest award ever against retailer,” noted INSIGHTS. Witnesses testified that the driver, who had a .266 BAC level, was visibly intoxicated and also skirted stadium serving limits on beers by tipping Aramark employees.

This week in 2009, when asked if AB InBev was last of the big deals in beer industry, SABMiller ceo Graham Mackay told Financial Times, “I don’t think it’s the end.” He added, “there will be further consolidation, affected though by the fact that most of the brewing industry is in private family or foundation or other hands and therefore it’s very difficult to predict when assets will become available.” Asked if a further tie up with Molson Coors was “just a matter of time,” Graham replied: “No not at all. The US market stands on its own…We have a strong number two position there and we’re very happy with that.” When asked if a deal with Coke was “unfeasible,” he replied: “I don’t know that it’s completely unfeasible, but I don’t think it’s in the cards right now either.” ABI bought SAB Miller in 2016.

New owners of Pabst, Metropoulos family planned to bet big on new Colt Blast, INSIGHTS reported this week in 2011. Co was willing to give Blast 20% of co’s mktg budget for yr, as mktg exec Nick Osborne called it “the largest new product launch in recent Pabst history.” Colt Blast was 12% ABV clear malt in brightly colored 23.5 oz cans and 7 oz glass bottles.  In video message, Dean Metropoulos told distribs, “While I love beer, I’m not a great consumer of beer,” and Blast is the “ultimate cocktail” that will have “great, great appeal to wide variety of consumers.” But after Four Loko debacle in 2010, “many distribs have increased sensitivity to what might set off social alarm bells,” wrote INSIGHTS. “I’ve never seen a younger looking product. I don’t want to go through what we went through with Four Loko again,” said one longtime distrib, who had sold a lot of Four Loko. 

World's largest distiller had better trends in malt bevs than spirits in its largest mkt in fiscal first half thru Dec. And both lost volume. Go figure. Diageo Beer Co organic net revs up 3% in US, while spirits organic net revs up only 2%. But Diageo Beer Co volume down just 1%, while spirits organic volume down 6%. Diageo said it held share of total beverage alcohol in North America.

AB plans to bet "disproportionately" on new set of self-proclaimed "megabrands" to capitalize on perceived growth oppys while spending big to play better defense on brands in declining segments with "mega-equity," ceo Brendan Whitworth shared in more detail at AB SAMCOM distrib meeting this week in Anaheim. Altogether, AB will spend 60% more on its 10 "megabrands" in 2023, cco Kyle Norrington and cmo Benoit Garbe shared separately. That includes Mich Ultra media +40%, the projected #1 spender in the category, Bud Light 5X spend, Busch Light 3.5X spend with natl campaign and several other big media increases.

C-store chain Kwik Trip is opening its westernmost beachhead of 3 stores in Sioux Falls area of SD, per Sioux Falls Business report picked up by C-Store Dive. Stores due "within months" will operate under Kwik Star banner used at locations in Iowa and Illinois. Two will be located in southeast Sioux Falls, the other in Brandon, about 10 miles E of downtown Sioux Falls. It's acquired land in Harrisburg, 10 miles south of town, for another location. It's market with heavy Circle K presence as well as several local banners. The western move comes just 4 months after La Crosse, Wis-based operator opened its easternmost store in Mich, the first in that state. By now Kwik Trip operates 800+ locations in Wis, Minn, Iowa, Ill and Mich.

Now even Bolthouse Farms can't resist the lure of energy category. After earlier venturing an energizing shot line called Bolts, Bakersfield, Calif-based refrigerated-juice giant is venturing a New Energy Platform, Deli Market News reported yesterday. Each bottle contains 3 ¾ servings of fruits and veggies, with company's signature carrot juice augmented with fruits like orange, grapefruit, pineapple and peach, plus balanced energy from natural green coffee bean extract and L-theanine, outlet reported from interview with marketing dir Amy Shoemaker. The 2-oz shot line, Bolts, gets its lift from ginseng and 90 mg of green-coffee-derived caffeine.

"Do people really care what's in their almond and oat milk?" That's premise of video ad from Malk Organics that invites shoppers at farmers market to choose from white carton on the left that lists 10 ingredients - including tricalcium phosphate and gellan gum - and white bottle on the right that lists just 3. Given their reactions, it seems clear that purported label readers haven't really been reading the labels very carefully. "I don't even know what half this stuff is," mutters one visitor squinting at carton. Another struggles to pronounce them. By contrast, the bottled drink only uses water, oats and pink Himalayan salt. "I like that it's 3 simple ingredients that I know exactly what they are," offers another. The carton offerings? The vendor offers a peak behind the table at Silk almondmilk and Oatly oatmilk. "Turns out, ingredients do matter," he concludes as video flashes brand's #turnitaround exhortation to read labels. "Farmers Market" ad from agency partner Door No 3 just launched via national buys on Amazon Prime, Hulu and YouTube TV. Tho we couldn't immediately reach execs for comment, marketing vet Thomas Oh on senior team surely must have had a hand in effort. It's being shown in short versions and extended version over a minute long.

Milwaukee-based Sprecher Brewery, whose ambitious new owner has been laying groundwork for its sodas to attain national premium presence, concluded another eventful year in 2022. Even as co grew by 35% in expanded distribution footprint, co added Olde Brooklyn brand via acquisition late last year, fleshed out senior team with recruits like Talking Rain vet Russ Schleiden to run marketing, and made concerted move into 16-oz can format. At time many specialty sodas are tilting their bottled offerings toward 12-oz cans, in both conventional and slim versions, ceo Sharad Chadha believes offering larger cans should unlock fertile new channels, particularly in convenience and foodservice, as cold singles.

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