Beer Marketer's Insights
Total Beer $$ Up Just 1.6%, Volume Down 6.3% in IRI Week Thru Dec 4 in IRI; Soft Anecdotal Reports
Not a great start to last mo of yr, INSIGHTS hears. And beer volume back to 6.3% drop in latest week of IRI multi-outlet+ convenience data thru Dec 4. That meant $$ sales only eked out 1.6% gain in IRI, even with near 8% avg price increase. In fact, beer volume down 5.7% for last 4 weeks thru Dec 4, compared to -3.6% for 12 weeks. Could price hike be having deleterious effect on beer volumes after all?
Consumer price index for beer jumped 7.7% in Nov vs yr ago per latest data from Bureau of Labor Statistics. That followed a 6% increase in Oct. In fact, beer CPI in Nov was ahead of 7.1% increase for All Items as overall inflation slowed slightly more than anticipated. Spirits prices were up 1.7% in Nov vs yr ago while wine prices rose 3.2%, its largest monthly gain for yr. YTD thru Nov, CPI for beer increased 4.7% vs 8% jump for all items. Spirits and wine prices up 1.3% and 2.2% respectively YTD.
Judge Grants Olympic Eagle Preliminary Injunction, Stopping Constellation's Forced Consolidation
WA judge seemed to be leaning this way and now he made it official: he granted Olympic Eagle rare preliminary injunction vs Constellation, stopping Constellation's termination/forced consolidation in its tracks. In same ruling late yesterday, he similarly denied STZ's motion to reconsider the temporary restraining order. Judge found: 1) "high likelihood of success" for Olympic vs Constellation based on state alc bev franchise law protections; 2) if Constellation terminated Olympic, that "would cause Olympic Eagle irreparable harm"; 3) the balance of equities tips in Olympic's favor and 4) it's in the public interest to maintain status quo of the current distribution agreement. So temporary restraining order is now "converted" and Constellation is "ENJOINED from terminating the Distribution Agreement without cause." WOW!
"What's powering Argentina at the World Cup?" NY Times asked today ahead of semifinal match vs Croatia. "1,100 pounds of yerba mate." Story riffing on popularity of bitter infusion notes that "Brazil's national team, which has a few mate drinkers, brought 26 pounds of it to Qatar . . . Uruguay's squad packed about 530 pounds. But it was Argentina, which will face Croatia in the semifinals on Tuesday fully expecting to extend its stay through Sunday's final, that topped them all. To ensure that the roughly 75 members of its traveling party — players, coaches, trainers and the rest — would have a steady supply of a drink they consider essential, Argentina's team hauled a whopping 1,100 pounds of yerba mate to Qatar." The lure: both the caffeine and the ritual of consuming it together out of a traditional bombilla and gourd. "It has caffeine," midfielder Alexis Mac Allister explained. "But I drink it more than anything to bring us together." Juan José Szychowski, prexy of National Institute of Yerba Mate in Argentina, cited the antioxidants contained in its polyphenols among the benefits.
NotCo's $70 Mil Series D1 Will Push Giuseppe AI Platform Out to Other Food/Bevcos, Ingredient Makers
Closing a $70 mil Series D1 round, NotMilk marketer NotCo indicated it's not thinking about itself so much as of other early-stage CPG brands, ingredient suppliers and tech providers that it will harness to its Giuseppe AI platform. Round was led by tech-oriented Princeville Capital firm with participation from incumbent investors Jeff Bezos via Bezos Expeditions, Tiger Global, L Catterton, Kaszek Ventures, Future Positive and The Craftory. New to mix was Marcos Galperin, founder/ceo of Latin American tech player MercadoLibre. Princeville cofounder Joaquin Rodriguez Torres is taking a NotCo board seat. Among earlier investors have been such celebs as Roger Federer, Lewis Hamilton and Questlove. New round maintained $1.5 bil enterprise valuation of Series D in Jul 2021. NotCo, recall, has been offering expanding array of plant-based entries including NotMilk, NotBurger and NotChicken via its proprietary tech and forged jv with Kraft Heinz to create plant-based versions of CPG giant's iconic foods. That's where Giuseppe comes in. "Through its new B2B platform, NotCo is making its technology available for more food and beverage manufacturers seeking to create best-in-class and scalable plant-based products," per announcement. "In addition to delivering a superior eating experience, NotCo's AI technology offers the added benefits of extreme accuracy and speed, cutting R&D development timelines down to mere months compared to what traditionally has taken years." Co has garnered big presence not just in US but in Mexico and Latin America, and it's forged overseas partnerships with Burger King, Shake Shack, Starbucks and Dunkin Donuts. Counting new money NotCo has raised $433 mil to date, per Crunchbase.
Poppi, the most aggressive player in burgeoning gut pop sector, said it's pulled in $25 mil capital round that its new ceo, Chris Hall, will use to further build out team and complete DSD map. Round was led by CaVu Partners, whose principal Rohan Oza invested $400K in brand as a judge on Shark Tank in 2018 and is credited by Poppi team with playing a key role in bright rebranding that makes cans pop off shelf, to tune of 148% revenue growth over past year. "He's almost a cofounder," cofounder Allison Ellsworth told us yesterday, citing his and CaVu's firm commitment even thru challenges of pandemic and aluminum can squeeze. Also playing a key role in brand's growth spurt was CaVu's internal creative agency Uncommon, which also contributed to ecomm channel that's up 250% over past year. In statement, Glaceau and Bai vet Ro termed Poppi "one of the fastest-growing beverage brands I've ever been a part of," one that's "well on its way to becoming the next billion-dollar brand and cementing their position as the modern soda of tomorrow." We'd reported on first tranche of investment a coupla months back but co execs weren't ready yet to discuss strategy in detail (BBI, Oct 20).
The $9 mil Series B round announced last week caps coupla years under which Malk Organics ceo Jason Bronstad has begun to onboard mainstream grocers like Publix for co's plantmilks, started pursuing foodservice opportunities and added key members to senior staff. In catchup call after round was announced (BBI, Dec 6), Jason pointed to key additions during his 2-year tenure like sales vp Adria Campbell, a longtime Dean Foods exec; coo Stuart Daly, a Conagra, Kerry Group and Dr Pepper Snapple Group vet, and marketing vp Thomas Oh, a PepsiCo and Big Red vet. (Bronstad himself has had good runs at Sara Lee and Mike's Hard Lemonade before heading into natural space.) A key challenge ahead is to push out more prominently into mainstream retail channels at unapologetically premium price, communicating to shoppers that brand's glyphosate-free recipes, without recourse to artificials, gums, oils or fillers, warrants the higher price. Under #turnitaround rubric, it's been encouraging shoppers to take a moment to scrutinize the ingredient panels of their altmilk choices.
Truth in Advertising watchdog group (Tina.org), working with Rudd Center for Food Policy & Health at Univ of Connecticut, in the past has chastised 40+ energy drink brands for marketing efforts that they contend snare kids into consuming caffeinated entries. No surprise then that fast-growing newcomer Ghost Energy, with array of licensed entries whose graphics mimic those of candy brands like Warheads, Sour Patch and Swedish Fish, is latest target. Partners have filed a complaint with FTC and FDA urging enforcement acting, pointing to candy partnerships and marketing alliance with esports' FaZe Clan. While Tina.org and Rudd seem to acknowledge that these properties span permeable border between kids and young adults, it argues that "consumers who see Ghost's marketing on social media, gaming platforms or on the company's website are not informed, however, that these products are only intended for healthy adults. This material information is relegated to illegible fine print inconspicuously placed on the energy drink cans and supplement containers." "Pairing candy logos that have clear child-appeal with a product that harms children's health is an egregious display of putting profit over common sense and the well-being of children," per Rudd's Fran Fleming-Milici. Ghost execs were still drilling into paperwork and not ready with a comment yet this afternoon. Note that issue is occurring at time that there's heightened scrutiny on alc purveyors using licensed trademarks like Mtn Dew that appeal in part to kids.
In what it heralds as a "first of its kind analysis" of milk products sold at school, Center for Science in the Public Interest (CSPI) has found that milks "vary widely in their nutritional quality" with some found to be "too high in sodium or added sugars, and with some containing behavior-disrupting dyes." In study named "Behind the Carton," CSPI researchers examined 51 products from 11 different dairy players, including 29 flavored and 22 unflavored milks. Noting that milk "naturally contains up to 120 milligrams" of sodium per cup, they found "unsurprisingly" none of the unflavored milks ranged much higher than that. Flavored milks were found to have sodium contents ranging from 95 to up to 250 mg. Flavored milks were also found to have sugar contents ranging from 6 to 16 grams, higher than FDA limit of 10 grams. Nonflavored milks obviously had no added sugars. Another issue with flavored milks raised by CSPI: 5 different strawberry-flavored milks contained "synthetic food dyes such as Red 40." These dyes "are not appropriate for the school meals program since they cause or exacerbate behavioral problems - including classroom difficulties - in some children," argued org. As press release from CSPI reminds, study findings have emerged just as USDA "is expected to begin a rulemaking process to align school meals with the Dietary Guidelines for Americans early next year."
Japanese beer & bev giant Asahi is setting up investment firm in Bay Area that will target $70 mil over next 3 years to investments in promising US startups, particularly low- and no-alcohol bevs. SF-based Asahi Group Beverages & Innovation LLC will manage the fund, dubbed Asahi Group Beverages & Innovation Fund, starting next month, seeking promising entries in categories of low-alc bevs, non-alc "beer-taste" bevs and "adult soft drinks." Also in purview will be sales and mfg tech. Crucially, the team will funnel back info on trends and startups to Asahi Group's regional offices in Japan, Europe, Oceania and Southeast Asia to guide their own growth initiatives. "In addition to its size, the US is one of the most attractive markets in the world for creating new trends," per statement from Asahi Group prexy/ceo Atsushi Katsuki. "We look forward to co-creating with startups that will open up new markets for alcohol and non-alcohol beverages. We aim to 'deliver on our great taste promise and bring more fun to life' by grasping new trends in the US and creating new value."