Beer Marketer's Insights
In 2d half of AB's 10-yr plan to "lead future growth," AB is adjusting game plan to bet way more on core beer brands than before, it told distribs at Oct 4 EAM (Equity Agreement Manager) meeting. This includes a huge investment increase in Bud Light (and Bud to lesser extent) while elevating "Core Plus Lagers" to co's #1 growth oppy, and Busch Light now viewed as a key growth brand for yrs to come.
NBWA News and Notes:
NBWA Convention in Chicago had 1700 attendees, a large exhibit hall and a packed agenda, all of which felt pre-pandemic (post?) somehow. It was really a warm and welcome experience to see so many industry folks all together in one place again, even more so than last year's return. At same time, one of strongest takeaways remains the degree of tumultuous change this industry is undergoing on multiple fronts. Blue Cloud dominated public discussions (see above), but many private conversations turned to consolidation. The blitz of big deals by Reyes Beer Division this fall, much discussed as it took its scale advantage in distribution to a whole 'nother level…. Meanwhile, smaller AB wholesalers are getting out in larger numbers. There are still almost 400 equity agreement managers in AB system, none even a quarter as big as RBD. Many AB distribs are "anxious," said one longtime observer. Why? Sales and share trends, friction on BEES, more consolidation in AB system, personnel issues and more. With all the change, there's unease among distribs, even though so many came through the pandemic with flying colors.
Whether claims of "confusion" or "fiction," critiques of Pepsi's Blue Cloud distrib unit cropped up repeatedly during NBWA and BI meetings in Chicago last wk. Concerns cited by speakers mostly fell into 2 buckets. One holds 3-tier, trade practice and franchise questions, some of which a pair of VA distribs put before state ABC in complaint filed early this mo. The other holds more existential unease about attracting underage interest.
NBWA lived up to its new name as Natl Beer and Beverage Wholesaler Assn for its 85th annual convention in Chicago last week. Vast majority of brands on display on the exhibitor floor were beyond beer vendors, including an array of non-alc cos (bevs and beer) and RTD cos across beer, wine and/or spirits bases. Sonic Hard Beverages (in partnership w/ COOP Aleworks) sponsored the opening reception. Traditional beer expected to slip from 76% to 68% of distribs' warehouses on avg in next 5 yrs, NBWA chief economist Lester Jones shared citing latest member survey. And new-age retailers like Whole Foods increasingly facing challenge of how to merchandise and allocate space while always keepin' an "eye on the prize" that is "emerging categories," Whole Foods global senior category merchant for beer & spirits, Mary Guiver acknowledged.
A new chapter for the Beer Institute got off to a promising start at its annual meeting in Chicago (just after NBWA convention). First, BI used that forum to announce hiring of new prexy Brian Crawford, from the battle-tested American Hotel & Lodging Assn, where he's exec veep and head of govt affairs. BI looked for a "unifying force," said outgoing chair (and Molson Coors ceo) Gavin Hattersley, "not just the soonest available leader." Brian made brief debut at BI meeting, tho he doesn't officially start until Dec 5. He noted "need for alignment" as one of "key elements" in discussions with beer assn execs. Brian takes on role vacated by Jim McGreevy (who went to Coca-Cola) after a 6-mo search.
The 2022 Beer Insights Seminar is coming right up. Join us for this premier beer biz event, less than 1 month away. It starts with a reception on Sunday, November 13th and the program is all day Monday, November 14th. You'll benefit from presentations and discussions with top industry execs like Boston Beer's Jim Koch, Molson Coors' Brian Feiro, AB's Kyle Norrington, Constellation's Jim Sabia, BMI's Benj Steinman, plus in-depth panels on The Evolution & Future of Beer & Beverage Distribution and Reflections from Economists & Beer Industry Experts
A few more closings set to take place in coming weeks. Cotati, CA's Grav South Brew Co, will close Nov 13 after 6 yrs in biz, marking another "notable closure in Sonoma County's craft beer industry as a result of the economic effects from the COVID-19 pandemic," per The Press Democrat. PA's Old Forge Brewing Co announced the closure of its York location, which opened in Nov 2018. The brewery still operates its main brewery/taproom in Danville, PA, in operation since 2008. MI's Mitten Brewing Co will finish its 6-yr stint in village of Northport at the end of the yr, despite being "one of our most successful yet," as co couldn't work out "an equitable renewal agreement with our landlord." And Austin-based Adelbert's Brewing will close at end of Oct, ending its 11-yr run after its landlord sold the property. But co decided to "go out on our own terms," leaning into the closure with a countdown clock on its website and a sticker that reads "sometimes you win, sometimes you become a parking lot."
Catawba's Morganton Taproom Hit with Layoffs; Shifting Production After MBTW Merger w/ Faubourg
A little over a yr after Made By The Water (MBTW) acquired Catawba and just a few wks after its deal with Faubourg to build a NOLA-based craft hub, "more than a dozen" employees at Catawba's Morganton, NC taproom got lay-off notices, as parent co shifts production away from that facility, Morganton.com reports. They'll become effective mid-Nov, latest in a series of scale backs at the brewery. And while layoffs didn't impact the brewer's other in-state locations, the future of that tasting room is "uncertain," article notes.
Trillium Moving to "Forever Home"; Selling Turnkey 25K-Bbl Site; Bought Spencer Brewing Equipment
Boston-based Trillium is consolidating operations at its flagship facility, selling off its former HQ, and purchased brewing assets from recently closed Trappist Spencer Brewery. About 3.5 yrs after acquiring 140K sq-ft at former Reebok campus in Canton, MA, co is ready to shift production into that space. Gotta note, Trillium volume declined double-digits since opting to build its large new facility, and continued to decline in home state MA thru 1st half of 2022, according to state data. Still plenty of excess capacity. Move follows "extensive renovations," including purchase of 60hL Krones brewhouse and "associated infrastructure" from last Trappist brewery in America, co announced via blog post. And it's "begun accepting proposals" for its old HQ just 5 miles down the road, offering "a highly desirable turn-key opportunity" with 25K+ bbl annual capacity.
Top-25 Craft NAs Up to $54.5 Mil, 1.3 Mil Cases YTD; Over 20 Share of NA $$; 1.3 Share of Craft
While Athletic put non-alc craft growth into another gear in scans, the largest non-alc craft brands across several cos are collectively gaining ground this yr too, according to Nielsen xAOC + liquor + convenience data shared by Bump Williams Consulting. Top-25 non-alc craft brands grew $$ over 83% to $54.5 mil, volume +74.5% to 1.3 mil cases YTD thru Oct 8, ranging from Athletic Run Wild at $13.5 mil to Wellbeing Victory Malt Bev at $250K. Collectively they gained 0.6 share of craft beer $$ to 1.3 YTD thru Oct 1. Up more than 6 share to 20 of total NA sales. Athletic makes up over half of top-25 NA craft brand $$ sales and near 3/4 of growth. Run Wild IPA (+86%), Upside Dawn (+110%), Athletic Free Way (+225%) are top-3 NA craft brands and impressively, each brand still among top-13 growth brands in all of craft YTD too, posting between $4-6 mil growth a piece. New Athletic Lite's incremental $978K makes it 8th largest craft NA brand and a top-20 new craft brand overall.