Beer Marketer's Insights
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).
There was a lot of action the week before NBWA, so much that we're rushing out another BMI to get all this info to you. Three of top 6 suppliers held important sales meetings for their distribs: Anheuser Busch, Heineken USA and Mark Anthony. At 2 of those 3 meetings, AB and HUSA, increased spend on beer brands, a major theme, while also emphasizing beyond beer offerings. Is Back to Beer starting to be a thing? Maybe, but spirits RTDs also will get way more love and attention in 2023, including big time from Mark Anthony.
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 Sadowksy. "And I don't think 'Jack Owoc' and the word 'contrite' have ever been said in the same sentence," added Ken.
Monster's first alcohol brand, The Beast Unleashed, doesn't use Monster moniker but is unmistakable progeny via graphic treatment of jagged "M" icon in eyeball. Launch will get started with variety pack of 12-oz slim cans in Citrus Mash-Up, Mean Green (nailing palate of core non-alc SKU), Peach Perfect and Scary Berries flavors, all 6% ABV, followed by 16-oz single cans in all but the berry flavor, per sell sheets offered at booth. "We hit delete on the energy blend, cut out the caffeine and ditched the sugar," as materials explain. Execs at CANarchy booth at NACS show in Las Vegas, separate from main Monster area, said liquid was just produced last Wed at Longmont, Colo, brewery of portfolio brand Oskar Blues. And it was clear that flavor lineup still is a work in progress: they showed white-hued pack that mimics popular core Ultra entry in zero-sugar line that garners more gender-neutral consumer base than green can. Flavor work was done with longtime partner Wild as well as Monster's own acquired AFF shop.
Pabst Brewing Names Thomas Tulfer CFO as Eric Tis Promoted to CFO of Blue Ribbon Partners
Pabst and parent co Blue Ribbon Partners are makin' changes to their respective cfo positions, as current Pabst Brewing cfo Eric Tis has been promoted to cfo of Blue Ribbon Partners. So Thomas "Tim" Tulfer was hired to replace Eric as cfo of Pabst Brewing. Eric served as cfo for Pabst since 2018 and "will stay on temporarily to ensure a smooth transition" before joining Blue Ribbon Partners "later this Fall." There Eric "will be a key contributor in overseeing our growth strategy," stated chairman Eugene Kashper. Recall, Blue Ribbon Partners is majority owner of City Brewing.
Mark Anthony Makes Waves with White Claw Vodka + Soda; Here Comes Mike's and Cayman Jack Zero Sugar
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.
Premium, Blue Ridge Sue Boston Beer, Claiming Hard Mtn Dew Must Go Thru Existing Distribs in VA
Tension created between Boston Beer and its wholesaler network by dealings with Pepsi on Hard Mtn Dew and especially establishment of competitive Blue Cloud network ratcheted up today. Boston's two Virginia distribs filed suit against the brewer before state Alc Bev Control Bd claiming the co violated state law when it appointed Blue Cloud operations instead of its existing distribs. Tho attributed to so-called Green Rebel Brewing Co, "Hard Mtn Dew is a Boston Beer 'brand,'" argue Premium Dist, a Reyes Beer Division co, and Blue Ridge Bev, owned by Archer family. And VA law requires that "no brewery shall enter into any agreement with more than one beer wholesaler…for its brands of beer in any territory," according to complaint.
Throwback Thursday
Coca-Cola's interest in alcohol bev biz is nothing new. This week back in 1971 co had a setback though when it had to shelve plan to buy Champale. "Crazy legal complications," INSIGHTS reported were main reason deal wouldn't happen. Problem was Coke of NY already owned Mogen David Wines, and New York law forbid any beverage corporation from owning a winery or a brewery at same time. That would not fly in most places, "not even in Timbuctoo," as one legal expert told INSIGHTS at time.
While Heineken Silver slated to be largest brand launch in HUSA history, co's got lots of new news for its other major brand family Dos Equis, too, execs shared during regional distrib mtgs today. Next yr, co has not 1, not 2 but 4 key launches: 1) an NA take on Lime & Salt, 2) a pair of Micheladas, 3) a 2nd flavor to its margarita spirits-based RTD and 4) a Tequila & Soda line starting in 2 flavors, sr brand director Ligia Patrocinio shared. Only the alcohol-free Dos Equis Lime & Salt will be national. Michelada and Mango Chelada only hitting 9 states, mostly in southwest, while expanded availability of spirits-based bevs will reach over half the country. Margaritas hit higher end of strength spectrum at 10% ABV and Tequila & Sodas go low at about half the strength and 95 calories. New offerings will begin to show up March 1, Ligia shared.
Here Comes White Claw Vodka Seltzer
Add leading hard seltzer brand White Claw to list of major brands taking aim at explosive growth of High Noon and attempting to get a piece of spirit-based seltzer action. White Claw Vodka Seltzer announced by founder Anthony von Mandl at today's natl sales meeting for Mark Anthony. Heretofore High Noon has totally dominated vodka seltzer and become quite the predator on hard seltzer segment. Now White Claw, Truly, Nutrl, Topo Chico Spirited, Fresca Mixed and more look to return the favor, some with tequila versions too. With over 1,000 entries already, and many more high-profile launches coming, how high is up for spirits-based RTDs?