Beer Marketer's Insights
Reused Claims of Confused Consumers Come for Ranch Water Seltzers' Lack of Tequila, More; Updates
A pair of ranch water hard seltzers became latest line-blurring alc bev innovations slapped with proposed class action lawsuits this wk. In just last couple days, nearly identical complaints repeated some recycled claims against use of "ranch water," "hard seltzer" and more by Heineken USA and Molson Coors to market Dos Equis and Topo Chico products, respectively. Filed in separate federal district courts, both suits come from the very same plaintiff's atty who went after White Claw Surge and Topo Chico Margarita hard seltzers in Aug and Truly, Vizzy, Flying Embers, Cacti and others before that.
Yuengling brands moved to Burke Dist (Bill Burke's family, different than Burke family in KY and IL, see above), Colonial Wholesale and Merrimack Valley Dist in Massachusetts. They bought Yuengling brands from 3 different Sheehan entities: Craft Boston, L. Knife and Seabord. Recall, earlier this yr, Craft Maine sold its entire craft portfolio to 3 AB distribs in ME. More possible deals afoot for Sheehan Family Cos.
In phase 1, Monster's new Beast Unleashed product, a 6% ABV FMB, will debut in CA, CO, FL, OH, NC, AZ, and in phase 2 (90 days later) in IL, MI, MO, NY, TN, TX, GA. Then 3 mos after that it will be national, according to CANarchy 1-pager. It will come out in 16-oz single serves and variety 12-pk in 12 oz slim cans. Brand will "fall under a separate distribution agreement to be executed prior to the brands being distributed in each market," CANarchy ceo Tony Short wrote distribs. He's "looking to move this process along as quickly as possible." Agreement reportedly is tuffer than many beer distribution agreements.
Volume slowdown in scan data is increasingly cause for concern among analysts. Are beer price hikes "finally starting to bite?" headlined Bernstein's Nadine Sarwat. "Recent Modelo Especial scanner weakness has set off alarm bells for many STZ investors," noted Evercore ISI's Robert Ottenstein. And while revenue growth may look healthy, "unit velocity tells a different story," wrote Credit Suisse's Kaumil Gajrawala, adding that "we think volume growth (or the lack of) will be more important in 2023."
Keg 1 LLC to Buy River City in Louisville, KY; Beverage Capital Partners' "Passive Minority" Stake
River City, an almost 5-mil-case MC distrib in Louisville, KY, will sell to KEG 1 LLC. Deal expected to close Jan 13 and was announced to employees and suppliers. River City owned by Kevin Burke and family, which continues to own Burke Beverage in Chicagoland (La Grange, IL). River City's portfolio includes Molson Coors, Constellation, Boston Beer, Mark Anthony, Diageo and Heineken USA as well as a "robust lineup of craft and import brands," plus spirits, wine and NA bevs. Keg 1 LLC is a "known consolidator of beverage alcohol distributors," it said in release, a group of 10 MC distribs (who combined sell over 120 mil cases), formed in 2006. Keg 1 already owns operations in Colorado Springs and 3 distribs in TX. Recall, it was also one of final 2 bidders in Nashville auction process earlier this yr, but ultimately lost out to Reyes Beer Division there. KEG 1 partnered in this deal with private equity firm Beverage Capital Partners, which owns a "passive minority stake" in acquiring entity, KEG 1 River City LLC. (it would have played same role if KEG 1 had gotten Nashville deal too). This is BCP's first participation a beer distribution deal. KEG 1 is gradually amassing a portfolio of distribs across several states.
Earlier today we referred loosely to Rohan Oza as a principal at CaVu Partners, but a PR rep asked that we point out that he's a founding partner there. So, Ro's a founding partner there . . . In story about Waterloo Sparkling Water, we compared Jason Shiver's recruitment of seasoned execs willing to do the grunt work of an early-stage bevco to stance adopted by Ghost Energy. We meant Liquid Death, as detailed in story last week (BBI, Dec 6), tho Ghost likely has its share of those street fighters too.
Prices are still running high across each non-alc bev segment over last 4 wks thru Dec 3 in NielsenIQ data reported by Goldman Sachs. Even with double-digit price gains, volume losses were modest in CSDs, energy drinks, sports drinks and RTD teas while up slightly in bottled water segment.
Spindrift Goes Crazy on Innovation (Relatively Speaking), Adding Teas, 'Nojito,' Peach Strawb
In what amounts to radical innovation jag for Spindrift, sparkling water co has added extensions in iced tea and mocktail adjacencies - the latter, dubbed Nojito, bringing founder Bill Creelman back to his entrepreneurial roots with mixer brand Stirrings that exited to Diageo. The flock of 4 new entries was comprised of Peach Strawberry, Mint Green Tea, Mango Black Tea and Nojito, a major swerve for co that's kept its portfolio focused and tight. In phone conversation, tho, Bill described them as logical evolution for brand that tiptoed into half & half entry called Half Tea & Half Lemon in 2018, then added trio of lemonade entries that proved to be among best-sellers - "the tipping point," he called them. All, of course, don't diverge from unsweetened identity of brand that eschews purportedly "natural flavors" for proprietary process that takes fruit essences directly into liquid.
While efforts to foster belonging & inclusion are ramping up in the alc bev industry, 2d installment of Heineken USA's "Behind the Label" report still shows a steep climb ahead. Co enlisted Wakefield Research to survey over 500 US-based adults employed by alc bev manufacturers, "with oversamples for 200 female, 100 Hispanic/Latino and 100 Black/African-American employees." And 86% of respondents said they experienced some type of "personal bias" during their time in the industry (84% in beer, 89% in spirits, 90% in wine), while 85% feel their org isn't "completely inclusive when making decisions for promotions or advancement."
2023 could be a tale of two halves. "We expect a good start" to next yr for US beer, bev and household/personal care (HPC) stocks, wrote JP Morgan's Andrea Teixeira in report this morn, given "several rounds of pricing on shelves, limited elasticity so far" plus easy comps against peak cost and supply chain pressures. But "2H23 is more uncertain as companies will lap most of their pricing actions and will likely start to see declines in volumes."