Lengthy profile covers the good, the bad and plenty of the ugly from Jack Owoc and Bang's meteoric rise while wondering if the "caffeine-infused juggernaut could be headed for a crash," following Sep 29 loss to Monster and juice maker Orange Bang in fed court that will cost co $293 mil or more. This verdict against Owoc for making false mktg claims about "super creatine" in Bang, coupled with $175 mil arbitration penalty in 2018, "could be devastating," at time Bang leaves Pepsi distribution to build its own network. "If Owoc hasn't signed up enough distributors to cover key areas, some large retailers may soon drop Bang altogether, sending sales into a tailspin," wrote Bloomberg. Can situation be fixed? "I think it depends on the level of contrition Bang will show," said bev industry guru Ken Sadowsky. "And I don't think 'Jack Owoc' and the word 'contrite' have ever been said in the same sentence," added Ken. Note that, by BBI's tally, Bang so far does seem to have re-enlisted broad array of DSD partners for this go-round, likely aided by portfolio void created by departure of Celsius for Pepsi system (BBI, Sep 26 and Oct 4).

Reyes acquisition freight train continues to accelerate with 3d deal in a month, Hawaii's Paradise Beverages, right on heels of announcing deals for DET in Nashville and Capitol Wright in Austin. Top Reyes Beer Division execs reportedly flew straight from Austin to Hawaii, following Texas announcement. Molson Coors/Constellation house sells around 8.9 mil cases, RBD confirmed, including over 7 mil cases of beer, per our sibling letter Insights Express. On NA side it's aligned with Keurig Dr Pepper (7 Up, Canada Dry, Snapple, Vita Coco, Polar but not flagship Dr Pepper) as well as Sparkling Ice, Fever-Tree, Good2Grow and BioSteel (via Constellation). Deal expected to close in Dec. RBD will continue operating out of all 5 facilities in state under new name, Hawaii Beverage. This is 12th state in which RBD will distribute beer and 5th state added in past 2 years. Note that seller is Bill Anderson, longtime beer wholesaler who's founder of private-equity shop First Beverage Group. This deal marks his exit from beer distrib biz.

President Biden's announcement yesterday that he plans on issuing pardons to anyone convicted of simple marijuana possession and importantly, call for a review on how the drug is classified, sent shares of pot companies soaring yesterday. Tilray was up near 39% in early morning trading and Canopy ~22%. But those gains proved to be short-lived, with Tilray down ~17% and Canopy off 24% in trading this afternoon. "After investors digested the news from Thursday, some decided to take profits Friday," noted Motley Fool. Tilray's Q1 results didn't help either as co missed analyst estimates on top and bottom lines. Tilray reported revenues of $153.2 mil and a net loss of $0.13 per share in qtr, while analysts anticipated revs of $156 mil with loss of 7 cents. While gains didn't last, spikes in share prices "show how much investors believe that opening up the US market could be a game changer" for those Canada-based cos, added MF. After news of Biden move, Canopy govt affairs vp Dave Culver said: "Today represents action from the Administration that we have been waiting for - an acknowledgement that cannabis prohibition has failed and that too many lives have been significantly impacted as a result," per NY Post.

Congo Brands has hitched its new RTD iced tea, Down South Sweet Tea, to loyal following of bro-country singer Morgan Wallen. That was grand reveal at NACS for new brand platform that we'd reported to be in works at marketer of Alani Nu, Prime Hydration and 3D Energy brands (BBI, Aug 18). Each of those other brands is hitched to influencer, to spectacular effect in case of Alani (via fitness guru Katy Hearn), very promising effect for Prime (MMA fighter Logan Paul) and more limited success so far for 3D (fitness guru Christian Guzman).

Heineken USA began virtual distrib mtgs yesterday acknowledging the supply chain struggles that led to a "very rough and tough year" and closed by "unleashing" its premium-priced, low-cal, low-carb Heineken Silver, co's biggest ever new product launch. HUSA's research shows low cannibalization rates with other Heineken brands, so Silver will be "accretive and complementary," ceo Maggie Timoney told INSIGHTS. And to demonstrate its "commitment and belief" in Silver, HUSA plans to spend $100 mil to support its launch.

Reyes Beer Division widened gap between it and all other beer distribs with its latest acquisition spree. It struck deals to buy 16-mil-case Capitol Wright in Austin and 8.9-mil-case Paradise Bevs in HI. (More details about these deals in our daily INSIGHTS Express.) Announced those 2 big deals on 2 consecutive days. Just 1-mo earlier, RBD announced deal to acquire 9-mil-case DET Dist in Nashville. Add in Columbia in Santa Rosa, CA and Constellation from Markstein Sales as well as other brands and Reyes will have acquired 40-mil-cases in 2022. Once these deals close, it will be over 310 mil cases annualized and over 10 share of US biz. It now does biz in 12 states, including TX, which is long sought-after prize. Already does over half the biz in CA and big chunk of FL biz. Reyes further distanced itself from all other distribs in terms of size, efficiency, resources and ability to get deals done, but it has sweeping ambition to get much bigger yet. And it reportedly has very low level of debt to EBITDA. How high is up?

Mark Anthony Brands is a company transformed since the last time it held in-person natl distrib conference in 2019, execs highlighted yesterday in Chicago at first live meeting in 3 yrs. That includes nearly tripling employee headcount to over 1100 in US, doubling points of distribution to over 4 mil, investing $1.4 bil in 3 “state-of-the-art” production facilities (with no debt) and 61% growth during that period, more than any major brewer since pre-Covid, said prexy Phil Rosse. But biggest change announced at this yr’s meeting: coming launch of White Claw Vodka + Soda, hitting shelves in spring 2023 and aiming directly at High Noon. It’ll debut in 4 flavors – pineapple, peach, wild cherry and watermelon – each 4.5% ABV and 100 cals, made with real vodka and real juice. They’ll launch in variety 8pk of 12oz slim cans, plus individual flavor 4pks. Yet as brand seeks to sway spirits drinkers with splashy new entry, MAB also plans to “extend” leadership in seltzer and lemonade, “exponentially scale” Cayman Jack and “rapidly test” innovation as it looks to get back to “double-digit” growth in 2023. (A shorter version of this article appeared in INSIGHTS Express.)

White Claw among many entrants trying to shake up spirits RTD segment. But Vodka + Soda up to “70% incremental” to White Claw’s core lineup, per internal data shared by cmo John Shea. To hit those heights, brand must be directly next to High Noon with “a shadow” everywhere it shows up, he added. Spirits-based seltzers offer “new and valuable” drinkers, slightly older with higher avg income. And at 4x the household penetration of High Noon, “absolutely” White Claw can “go at it” with “every right to win,” John added. Co will play up premium cred of its base vodka, the ”world’s first triple wave filtered vodka,” which won double gold at this yr’s SF world spirits competition. How much will White Claw’s equity translate into spirits?

White Claw’s Wild Ride; Back to Growth and “Greatest Growth Story Since Prohibition” Last 12 mos were a roller-coaster ride for White Claw and seltzer segment at large. But after some “bumps in the road,” brand grew from 37 share back to 50 share. White Claw is “starting to see growth again,” with $$ accelerating from +1% thru 2022 to +2% last 3 mos and +3% in latest mo with +5% depletion trend. Still 7th-largest beer brand in America and #1 flavor brand. And it sold more than $8 bil since 2017, “the greatest growth story since alcohol became legal post-prohibition,” Phil added. Category complexity continues, with more seltzer brands this yr than last. But 40 SKUs drive 80% of sales. So it’s time to move to “focused phase” and “let the lead brand grow this category again,” he implored.

White Claw’s “only just begun” its journey as an “iconic brand,” said founder and ceo Anthony Von Mandl. Many “imposter brands” came at it, many “barely drinkable” and some “undrinkable.” That’s “disastrous for the consumer and the segment,” he added. So brand will launch new campaign dubbed “the difference is clear,” highlighting “cold wave filtration process for superior refreshment.” It’s slated to deliver 8 bil impressions across 87% of 21+ US consumers, biggest ever support for White Claw, John detailed. Brand will also look to “energize core” and “lead full flavor,” starting with 2 new 6pk flavors: blackberry and peach. And White Claw will shift all single serves back to 19.2s after OOS risks caused temporary transition to 24oz cans. Surge is #1 high-abv seltzer at 4.6 share, double all others combined. Total White Claw singles +27% YTD and 10% of overall segment, said John. On flavor front, White Claw Surf is a top-3 innovation in beer while Refreshr’s “gaining momentum.”

Mike’s & Cayman Jack Jump in with Zero Sugar Offerings; Big Perceived Oppy Mark Anthony sees “massive” oppy with “zero sugar” offerings. That category carved out $7 bil segment (40 share) in energy; $9 bil (30 share) in soft drinks. Both still up high teens on 3-yr CAGR and “highly incremental,” said John. Sugar reduction is macro trend and #1 purchase barrier for consumers buying FMBs. Yet zero sugar just 1.7 share of segment. If it were to reach 20 share of FMBs, that’d be 30-mil case, $1 bil category. So sure enuf, here comes Mike’s Zero Sugar and Cayman Jack Zero Sugar, both launching as “big bets” across all retail channels in spring 2023. Each will debut at 100 cals per serving, launching in 6pks, 12pks and 24oz singles.

Mike’s +14% Since Summer; Cayman’s Top-3 FMB Ambition Mike’s remains #1 in hard lemonade for 23 yrs, 14th-biggest beer brand and #1 FMB in awareness, penetration and trial. It’s grown 14% over last 20 wks, up every wk since summer, coinciding with launch of Simply Spiked. And while Cayman Jack is already the “fastest-growing” FMB brand at “twice the rate” of next highest competitor, co’s new ambition is to make it a “top-3 FMB brand.” It’s grown 334% from 2019-2022, +50% last 52 wks and could top 10 mil cases in 2023, execs noted. So MAB aims to drive awareness (currently 30% vs 80% on Mike’s) and expand dist (currently at 1/2 Mike’s) to make Cayman to margarita what “Mike’s is to lemonade.”

Rey Azul Going National; Plenty of Test Launches Mark Anthony will also take another spirits RTD brand national, in addition to several test launches for further afield innovation. Its “premium tequila soda” entry, Rey Azul, will go natl by next spring after launching in select mkts this yr. And it’ll launch a new hard tea brand called 2Hoots, as well as Lazy Pour pre-mixed cocktails and a Cayman Jack ready to serve offering in focused markets next yr. 2Hoots is “real brewed tea,” sustainably sourced and noncarbonated, launching in 12oz 12pks and 24oz cans. Lazy Pour will offer 3 “bartender quality” premixed cocktails sold in individual 4pks. And Cayman Jack will launch ready-to-serve offshoot, 12% ABV product sold in 1.5L glass bottles. But regardless of base, anything below 14% ABV will continue to go thru co’s beer distrib network, co clarified.  

Flavor Still the Future Mike’s remains steadfast in its belief that flavor is still the way forward. Total flavors now #1 segment in beer, rising from 6% in 2012 to 24% today, according to MAB (including spirits RTDs, plus FMBs, seltzers, ciders and cheladas). And that’s “not ending anytime soon,” said Phil. Mike’s still #1 in flavors and #4 in beer, “responsible” for building both FMB and seltzer segments, added Anthony. “Where would beer industry be today” without those two categories?

Constellation Brands Beer Division reported yet another qtr of its prototypical strong STR growth, tho total co results diminished by over $1 bil non-cash impairment charge on still-struggling Canopy Growth. STZ sales-to-retailers up 8.9% in fiscal Q2 thru Aug. That's almost exact same pace as in Q1 (+8.8%). What's more, September stayed "very solid," said ceo Bill Newlands on conference call. Interestingly, some analysts expected even higher STR growth (11-12%) in qtr, as Mad Money's Jim Cramer noted talking to Bill on CNBC. And Modelo Especial "slowed" to 10% growth in qtr, compared to 15+ in Q1. (The horrors!) But Corona Extra +6%, Pacifico up 37% and Modelo Chelada up a whopping 60%, and now has 60 share of Chelada segment. All in, portfolio healthy as a horse, achieving strong results even with precipitous drops in Corona Seltzer and Corona Light (in scan).