Beer Marketer's Insights
RETAIL: Expanded Food/Bev Offerings on Hand at Target's New Breed of Bigger, Ecomm-Oriented Stores
Tho its smaller urban-oriented stores have grabbed lotsa attention, Target chain is doing a switcheroo, shifting its expansion strategy to new breed of larger store, starting with new location that opened recently in Houston. New store is nearly 150K-sq-ft large, 20K larger than conventional Target stores, due to rethought configuration that offers wider aisles while better accommodating same-day fulfillment of ecomm orders that now account for 10% of mix, SpecialtyFood.com reported. "While the retailer will continue to open stores of all sizes, the growth over the next few years will focus on the larger footprint," Specialty Food Assn's news arm reported. "The company will also bring its reimagined store design, featuring a more open layout and localized elements to remodels and new stores across its chain." Those larger stores also offer "expanded food and beverage, exclusive brand partnerships and a curated mix of owned brands and national brands will take center stage," it reported.
Black Rifle Coffee reported strong start to its intensified CPG push in Q3, saying its bagged coffees and pods had leapfrogged Peet's and Death Wish brands at inaugural customer Walmart, tho copacking glitch on its fast-growing RTD coffees forced co to cut back sales guidance for Q4 and full year. Still, shares soared nearly 10% in early trading today before settling back to recent trading range as afternoon wore on. So investors who were spooked by big tilt toward CPG when it was announced last summer seem to be buying in, tho valuation remains subdued at $375 mil, barely 1X annual sales run rate, in market that's emphatically lost its earlier giddiness over adept DTC players.
Time is running out to join us for this year's Beer Insights Seminar, with a reception this coming Sunday evening and program all day Monday, Nov 14 in midtown NYC. Our stellar agenda features a line-up of top industry execs and thought leaders. Learn the latest industry insights, dig deeper into hot topics during in-depth discussions and reconnect with other beer biz movers and shakers. Register for this year's Seminar today! We hope to see you next week in NYC.
Next Monday, BMI will host its 28th Beer Insights Seminar, which has provided good times, excellent networking and first-rate content over the years. So in this week's longer-than-usual TBT, we focus on a few classic past presentations as well as more typical TBT fare.
Celsius Doubles Q3 Sales to $188 Mil; Praises Pepsi Transition; Termination Fees To Top $200 Mil
Another gangbuster qtr of growth for Celsius Holdings, which reported revs up 98% to $188.2 mil. Celsius ceo John Fieldly heaped praise on Pepsi and benefits of partnership, including 11% ACV gain since transition on Oct 1, 23% gain in c-stores, 550 branded coolers, etc. Far cry from Pepsi's previous alliance with Bang, where strains started to appear almost immediately. But just as striking as CELH's growth, gotta note how much money went out the door in termination fees. Celsius wrote $155.4 mil worth of checks to buy out its DSD partners as it shifted to Pepsi system, and so reported operating loss of $147.6 mil. But don't worry about Celsius: it will get that money back from partner Pepsi. Indeed, PEP's upfront payment of $175 mil already in the bank. Celsius anticipates another $50 mil or so in buyout obligations coming in current qtr. Meanwhile, Celsius velocity already slowing as it pushes out further into account base. At least Celsius transparent about the costs of transition. This article excerpted from a more detailed piece in this morning's Beverage Business INSIGHTS. Celsius stock up 13% at press time today.
Hottest alc bev segment remains hot topic and key growth engine for spirits category. As spirits depletions slowed from +3.4% for 12 mos thru Sep to up just 0.2% for 6 mos, RTDs are keeping the category positive, analysts Dale Stratton and Danny Brager presented during WSWA webinar powered by SipSource depletions data. Pull out RTDs and spirits depletions up just 0.9% for 12 mos and down 3.1% for 6. That's as wine depletions still struggling, -6.7% for 12 mos, -8.6% for 6 mos, while beer holds steady, -1.5%/-1.8% each period.
Constellation Stock Pops As It Eliminates Class B Voting Shares; Pays $1.5 Bil to Sands Family
Owners of about 75% of Constellation Class A shares voted quickly and without fanfare yesterday to eliminate STZ's class B voting stock, and reclassify those shares as Class A. By end of today, Constellation stock will be "solely" Class A Common stock, co said this morn. "This change enhances Constellation's corporate governance profile and capital structure, enabling us to better meet the expectations of our existing stockholders and potentially appeal to a larger base of investors," said ceo Bill Newlands. So far so good. Stock popped over 3% today, gaining $1.3-1.4 bil in stock mkt capitalization at press time.
Beer Prices Jumped 6% in Oct
Inflation eased a bit in Oct as consumer price index for all items came down half a percentage point to a 7.7% increase vs yr ago, per Bureau of Labor Statistics. While inflation slowed a tad, CPI for beer ramped up to a 6% increase in Oct vs yr ago. That's highest increase for beer all year and one of biggest monthly hikes that we can recall in decades. While beer CPI still below that for all items, CPI for spirits edged up just 0.5% in Oct while wine prices (+2.7%) had their largest monthly gain for yr so far. Recall, IRI and Nielsen scan data show 8% avg price increase for beer off premise in Oct data. In govt data, YTD thru Sep, CPI for beer up 4.4% compared to 8.1% increase for all items while spirits up 1.4% and wine 2%.
FLASH! Dokmecioglu Out as Keurig Dr Pepper CEO over Personal Behavior Issue; Gamgort Reassumes Role
A shocker this morning: recently elevated Keurig Dr Pepper ceo Ozan Dokmecioglu has abruptly resigned, "due to violations of the company's Code of Conduct that were unrelated to strategy, operations or financial reporting," co announced just now. His predecessor in role, Bob Gamgort, is reassuming ceo role while remaining in chmn post. He'd been serving as exec chmn, focusing on dealmaking activities as former cfo Dokmecioglu managed day-to-day over past 4 months. No further details aside from stern statement from lead director Paul Michaels as follows: "Keurig Dr Pepper's Code of Conduct is built on a foundation of ethics, integrity and personal responsibility. Every employee, without exception, is accountable for knowing and following the Code. Bob's vision and leadership have driven KDP's success as a modern beverage company to date, and the board is grateful for his willingness to return as ceo." Dokmecioglu brought unusually diverse array of talents beyond bean-coun
Celsius Holdings shares were surging in overnight trading after energy drink marketer reported doubling of sales in Q3 and reported rapid progress in building retail presence via its new distribution deal with PepsiCo. Among evidence that early days are vindicating shift to Pepsi system, co cited 11% ACV gain in MULO+C channels since transition on Oct 1, +23% gain in c-stores that comprise key channel for energy drinks. Another key lure of alignment, cracking foodservice, already is coming to fruition, particularly at college/university level, chmn/ceo John Fieldly told investors yesterday afternoon. Co placed 550 branded coolers in Q3, 3,500 since beginning of 2021, but it's drooling over Pepsi's huge base of 50K coolers, execs indicated. It seemed a far cry from Pepsi's previous alliance with Bang, where strains started to appear almost immediately and just worsened until partnership was unwound early.