Beer Marketer's Insights
Brooklyn Up Double Digits, Plans Move to New HQ in Same Nabe by 2024; More Manhattan Taprooms
After long, winding road to finding location for new HQ and taproom, Brooklyn Brewery will stay in Greenpoint-Williamsburg neighborhood in its namesake NYC boro, co announced today. Co will take on about half of in-development 82K sq-ft building in mid-2024. "We are excited to be staying in the neighborhood we've called home for 35 years," ceo Eric Ottaway told INSIGHTS. (This article adapted from issue of Craft Brew News published earlier today.)
MC "Misses" with 2 Emerging Growth Oppys: Ends Agreement with La Colombe, Unties Truss CBD JV
Molson Coors no longer exploring 2 emerging growth oppys outside alc bevs, focusing efforts elsewhere, co announced this afternoon. After mutual agreement with La Colombe Coffee Roasters, it'll wrap up distribution agreement for co's RTD coffee line by end of next Mar. Co also decided to cut ties with cannabis co Hexo to end CBD bev JV, Truss USA. Tho co "opened new lines of revenue" outside beer, "we've had some hits and some misses," emerging growth prexy Pete Marino said in note to distrib network. Yet "one of the lessons we've learned is to quickly identify when something just isn't going to work for us, or for you," he added.
Among themes that emerged at this week's Beer Insights Seminar, labor shortages stood out above all else during segment on distributor evolution. Current labor crunch is the "biggest existential risk" to all of CPG right now, mainly driven by scarcity of commercial drivers (CDLs), said prexy of Hand Family Cos, JR Hand. He's "constantly amazed" about the "lack of knowledge" around CDL crunch. And while upping pay for drivers is primary way to fix that, co already increased wages 20% over last 2 yrs, accounting for "about 70% of our cost structure" and a "significant impact" on the biz. Distribs could be in for a "tough road" on labor for "at least the next 2-3 years," despite a potential recession, JR figures. Turnover rates are "probably higher than they've ever been" and the cost associated with that is "really unmeasurable."
Another new player entering beer biz with quite a splash. Mile One Holdings will buy MC distrib Hammond Beverage Group in MD, it wrote to suppliers and told employees. Who is Mile One? It owns a whole lot of auto dealerships and its ceo Steve Fader has been trying to buy into beer business for some time. Mile One reportedly even made a run at DET Distributing in Nashville, so Molson Coors already familiar with it. But now Mile One has scored its first beer distributor deal as it will acquire 4.5-mil-case Hammond Beverage Group. "We've sold to Mile One Holdings," Hammond's note to suppliers said and "intend to close by January 31st."
With this purchase of Bond Distributing, HOBO (the Honickman, Bergson and Origlio families) will enter yet another state. Recall, HOBO already owns most of Amoskeag in New Hampshire, half of Burke in Boston and Finley Distributors in Tucson. Plus Origlio is partners with Honickman in Origlio Dist in PA, and the 2 of them own at least half of Kramer Dist in NJ. And the Honickman and Bergson (and Brayman) families own Manhattan Beer in NY. So this will mark the seventh state where 1 or more of these owners will have interest in beer distribution. Only Honickman in all 7. But these entities around 100 mil cases in all.
Not too often that 2 deals come to light on same day in same state. But 2 distribs deals in MD are breaking news this afternoon. Bond Dist in Baltimore will sell its 4-5 mil cases to HOBO (comprised of Honickman, Bergson and Origlio families), it announced to employees this afternoon. And Hammond Beverage Group will sell its 4.5-mil-cases in MD to Mile One Holdings, which owns a whole lot of auto dealerships. Read on.
CBD brands were hot items for c-store retailers in 2019 but then "the pandemic and a hazy regulatory environment stymied the category just as it was taking off," assessed C-Store Dive. Once Congress removed hemp from the Schedule I controlled substance list in 2018, c-stores "jumped at the opportunity," with major chains including Circle K, Yesway and Sheetz opening their shelves for these new and interesting products. Publication recalled that "CBD was the star" of the 2019 NACS show with its own dedicated pavilion. Then Covid happened and put the brakes on the CBD rollout as stores "were focusing elsewhere amid the pandemic" and consumers avoided stores and pivoted to ordering products online. CBD segment has yet to bounce back as the number of retail stores receiving CBD brands "has steadily declined since April 2020," per database mgmt firm Management Science Associates (MSA).
After aggressively building what's likely the most extensive network of dedicated alc-alternative bev stores in US, NY-based Boisson has moved into distribution space, offering its curation services to bar and restaurant owners in NY, LA and SF, filling a void it claims conventional wholesalers simply are not yet equipped to manage.
PEOPLE: Whole Foods' Bev Buyer, Daines, Heads to Gopuff; NAs at WF Grew 14% Last Year to $600 Mil
Talent-acquisitive Gopuff has landed one of most visible retail execs in bev innovation space: George Daines, Whole Foods' buyer for shelf-stable bevs. The rapid delivery co had been seeking a sr category mgr to manage its entire NA bev portfolio, reporting to sr bevs dir Randy Ornstein, the former Anheuser-Busch exec (BBI, Aug 17). Now it seems to have recruited one of the most influential, one who made his mark in just a few years in space, after coming to Whole Foods in 2018 after 4+ years at Dick's Sporting Goods (BBI, Feb 22 2018). George will remain in Austin rather than relocating to Gopuff's Philadelphia hq, we hear. Randy confirmed move at presstime, saying, "Big hire. Really excited for him to start."
Molson Coors said this afternoon that it's splitting with La Colombe Coffee Roasters, which with Zoa Energy was a key prong of the megabrewer's push into NA space. They'll dissolve their distribution agreement early, on Mar 31. The move, which comes as Zoa has scored impressive topline in first year but itself is undertaking broad restage, represents frank acknowledgement by MC that this one wasn't going to pan out over longer term. "We've had some hits and some misses, but we've learned a ton and we have positioned ourselves for a bright future," said emerging growth prexy Pete Marino in email to US distributors. "One of the lessons we've learned is to quickly identify when something just isn't going to work for us, or for you." He attributed breakup in part to desire by Philadelphia-based roaster to consolidate its core bagged and other formats in single distribution format. "We love the brand and wish La Colombe the best moving forward, but we believe this is a decision our distributors will greatly appreciate." La Colombe prexy Chuck Chupein added that, while roaster "would welcome the chance to stay involved with Molson Coors for certain classes of trade as we look to benefit from more synergies in our businesses," the coffee company recognizes "why that doesn't make sense for them or many of their wholesalers." Some close to both parties said brand got off to uneven start with network when wholesalers initially were limited to the most difficult-to-work channels, convenience and drug, where the bagged coffees generally aren't sold, rather than also enjoying the bigger drops at large-format retailers, a channel that only came along later.

