In new era of distrib valuations runnin' at 12-13x EBITDA (in right mkts with right portfolio), more "sophisticated buyers" from outside industry are lookin' to get into beer distribution biz, OMAC's John O'Connor highlighted at CFBD meeting. Editor's note: At CBBD meeting, Consultant Joe Thompson reiterated very similar 13.2x median EBITDA in AB/MC distrib transactions tracked buy JP Morgan Chase 2015-2021. Big PE players like BDT Capital, Meritage and Redwood have already made their mark, including $3 bil spent by Redwood in 4 yrs. Now Franchise Equity Partners is latest large firm lookin' to get in, with $1 bil war chest fund seeking car dealerships, restaurant franchises and bev distribs, John highlighted. Notably, FEP is lookin' at different kinds of deal structures with "interesting models" and "minority, flexible stakes," said John. They're "willing to take lower than typical returns," as they even partnered with Keg One group to "compete with Reyes" for DET in Nashville. If you're willing to compete with Reyes on deals, "by definition," that's "willing to take a lower return," he added. "I think they're going to make some waves," and more likely "end up in the Bud system."

Calif Family Beer Distrib assn gathered for its inaugural annual conference to rally against aggressive levels of forced consolidation happening in its state as group's clear north star. Reyes is now 150+ mil cases annualized in CA following some of its most recent additions, approximately 55% of total volume, according to CFBD exec director Kevin Luckey. (Editor's note: higher at this point, including 4 mil cases from Columbia Dist's CA operations, another 2 mil cases of Constellation from Markstein Sales, and more brand consolidations this yr alone.) "Transactions in most cases" since 2018 were "forced consolidations," with brewers and wholesaler "working together," said Kevin. That's "happened in the past," he acknowledged. But it's "different in this scenario" with Constellation as the "X factor."

Recall, CA beer distribs split into 2 assns in wake of STZ's forced consolidations in 2018-2019 (Constellation volume went to Reyes Beer Division). Yesterday, each of the 2 associations held their meeting on the exact same date. California Beer and Beverage Distributors' (CBBD) held a celebratory meeting in Napa on its 75th anniversary, including speakers like consultants Joe Thompson and Arlington Advisers' JB Shireman. And CA Family Beer Distribs' inaugural meeting in Palm Desert included speakers like OMAC Bev Advisers' John O' Connor and Firestone Walker's sales veep Kristen Demergian. (Trade press, including INSIGHTS, spoke at both conferences.) Some of same subjects popped up on program at both meetings, including consolidation, natch. (See below.) While CBBD dominated by Reyes which sells over half the beer in the state, a number of other smaller non-AB distribs still belong to the assn. And most CFBD members are AB distribs, setting up in opposition to CBBD. CA is one of a number of states, including TX and FL where there are split assns. Not optimal legislatively, but separate assns still find ways to survive and perhaps even thrive.

Starbucks scored strong sales gain in its fiscal fourth quarter, one which included highest sales week in co's history during Sep. Revenues rose 6% to $6.13 bil but operating income fell 9% to $1.14 bil because of "investments and growth in labor including enhanced store partner wages as well as increased spend on new partner training, coupled with higher commodity and supply chain costs due to inflationary pressures." Operating margin contracted to 18.6% from 21.8% a year earlier.

"A lot of creatine experts are sick of the way we talk about creatine," opens a NY Times wellness story this week. "Some are tired of cotton candy-flavored energy drinks hawking 'super creatine' on neon cans, protein bars infused with the supplement, social media posts confusing creatine with steroids." But does the ingredient really do anything? Story's assessment citing range of nutrition and performance experts is that "the supplement can improve short bursts of athletic performance and enhance muscle mass" in way that helps elite performers, but "the effect is usually small." So while creatine offers a boost for competitive athletes seeking split-second advantage, one expert said, "for your average gym-goer, someone who's a cyclist, someone who plays soccer on the weekends — they don't need this." Another expert cited in story notes that there are 20+ different creatine formulations, including creatine hydrochloride and creatyl-l-leucine (the version in those neon cans), "but only creatine monohydrate has strong evidence behind it, so he would recommend against consuming another form of the compound."

Acceding to litigation loss to Monster Beverage, VPX Sports confirmed that it's dropping "super creatine" phrase from its Bang Energy cans. Phrase's place in conspicuous position near top rim is being replaced by aspirational slogan "Fuel your destiny." "Among other changes, "there will be no mention of 'super creatine' on Bang Energy's packaging or advertising," co said in announcement to trade that brand's creator and ceo Jack Owoc sent over to us last night. "This new packaging is already in production and expected to be available across the entire portfolio of Bang Energy drinks and Bang Energy shots, within the next few months." Memo terms move "exciting transition."

Monster reported strong sales gain but softer operating earnings for its 3d qtr, talking up heavy innovation slate on both alc and NA sides even and saying price hikes were doing their job in covering higher costs without squelching demand. Shares were up 6% in trading this afternoon as investors digested indications that lucrative energy segment is traversing economic headwinds without much of a hitch.

Former LA Libations exec Jacob Timony has launched Austin-based accelerator called Strikepoint Sales that's been assembling field execution teams in Texas and in Calif for roster of clients that spans likes of Blue Island Coffee, Halfday Iced Tea, Barcode and Bawi Agua Fresca. Co also is willing to write small checks in range of $10K-100K to help jumpstart promising entries, as it did with Aisle cash rebate co. It focuses broadly on food/bev, beauty, fashion, lifestyle and health & wellness segments, styling itself an "execution agency" that follows its strategy services with in-depth execution well beyond what a broker might offer. These include choosing distributors, landing secondary placements, in-store activation, promo management and store audits. By now, co has amassed 20 employees in Texas, with focus on Austin, Dallas/Ft Worth and Houston, and 10 in Calif, all full-time 1099 contract workers. Working with distributors like HiTouch in SoCal, Strikepoint encourages clients to target retailers like Jimbo's that offer "points of discovery" rather than going broadly into chains like 7-Eleven that offer high point-of-sale number but don't reach selective shoppers needed in early stages, as Jacob explained during encounter at recent Expo East and follow-up call.