Beer Marketer's Insights
Latin American megabottler Arca Continental and Coca-Cola said today that they've strengthened their relationship with long-term deal that "aligns the key economic aspects of the business relationship for the long term, along with favoring joint efforts to continue perfecting service for customers and consumers, promote new avenues of profitable growth, and deploy broader digital initiatives in Latin America." Announcement between partners of past 96 years didn't offer many specifics, but includes all markets where Arca distributes Coke in northern/western regions of Mexico, Ecuador, Peru and northern part of Argentina, and involves such areas as setting "investment and profitability levels that are mutually beneficial," coordinating their execution, agreeing to "explore potential new revenue streams in the distribution of other product categories within the industry's main brands" and developing a digital alliance "to leverage the power of the Coca-Cola system's footprint, while building an integrated ecosystem of platforms that create value across the digital and physical worlds, in every part of our business." The latter will capitalize on learnings from so-called Yomp! platform employed in traditional channel in Mexico, the partners said. Agreement doesn't seem to hold any direct implications for Arca's extensive territory in southwest part of US that it picked up via KO's refranchising. In first half of 2022, that US territory moved 219.6 mil cases out of 1.16 bil cases for entire co. Arca is based in Monterrey, Mexico, and trades on Mexican exchange.
Even as PepsiCo onboards Celsius as outside energy drink partner, it's continuing to broaden energy-style offerings from its incumbent brands. Joining portfolio that includes soon-launching Gatorade Fast Twitch is Mtn Dew Code Red Energy, an extension of popular cherry-flavored entry. The new line, which seems to have popped up at Walmart as early as Sep 2, per one amateur YouTube reviewer, contains 180 mg of caffeine, zinc, vitamins A and C and antioxidants, ensconced in bright-red 16-oz can. "Immune boost. Mental support," declare graphics near top rim. Limited-time entry contains 5% juice, for 4 g of sugar (25 calories) but zero added sugar. It gets sweetening lift from aspartame, ace-K and sucralose. It joins energy portfolio that also includes Dew Energy and the all-natural Starbucks Baya.
At time that capacity squeeze in aseptic production has created supply chain headaches for makers of protein shakes, creamed coffees and plantmilks, a pair of familiar figures from that world have been on hellbent construction spree, erecting massive new facility called Mountaintop Beverage in Morgantown, W Va. At topping-off ceremony on Fri, those principals offered prospect of being up and running by year-end with facility that local reports have cited as $300 mil investment. Those principals both are longtime vets of go-to aseptic house Steuben Foods in western NY: ceo Jeff Sokal, who spent 26 years at Steuben, and coo Doug Jantzi, with 16 there. Steuben is regarded as an aseptic pioneer in US, harnessing tech primarily used in Europe in its facility in Elma, NY, which has long served as reliable partner for such items. So duo possibly is setting up shop as new rival to Steuben, albeit at remove of nearly 300 miles.
We are pleased to announce that Boston Beer founder/chairman Jim Koch will join the program for the 2022 Beer Insights Seminar. And Hand Family Cos prexy JR Hand will complete our panel of distribs along with Manhattan Beer coo Ed McBrien and Eagle Rock Dist ceo Steve Economos. Program also includes MC's incoming sales vp Brian Feiro, AB's chief commercial officer Kyle Norrington, Constellation Brands evp and Beer Division prexy Jim Sabia,
Bump Williams Consulting just hired longtime gm of nearly 12-mil-case Nevada Beverage, Robert McDonald (there for 38 yrs), who will start December 1. Recall, Bump Williams Consulting is partnering and aligning with Arlington Capital in part to do distrib deals. Robert will play "an integral role" in growing this part of BWC biz, Bump wrote his employees. But Robert will also help with "developing a persuasive store-level distributor service" and numerous other distrib-centric functions at BWC. Like OMAC with recent hire of Adam Bush (see Sep 12 issue), BWC is beefing up its distrib-centric services, including for coming consolidation.
MC's promoting from within as incoming US sales veep Brian Feiro and co build out sales team leading up to longtime exec Kevin Doyle's retirement at year end. MC vet Jeff Long will transition from chief commercial solutions officer to Brian's current role as chief customer officer, "leading our sales teams," Brian wrote distribs earlier today. And Andrew McGuire will shift from current role as Great Lakes Region veep to fill Jeff's position as chief commercial solutions officer. Both moves "effective January 1," and "search is underway" for Andrew's "successor."
Big Labor Day Lift for On Premise
Labor Day weekend brought a surge in on-premise sales (food & bevs) with velocity up 16% for Sun (Sep 4) and gain of 54% on Mon (Sep 5) vs previous week, per latest Nielsen CGA figures. "All key states also experienced a double-digit increase" on Labor Day, led by surges of 60% in Tex and 59% in Calif, per report. "Much of the US is still steadily experiencing increases in velocity in the on premise compared to 2021," as well, noted regional dir Matthew Crompton. On-premise sales for week ended Sep 10 vs yr ago increased 13% in both NY and Ill, while up 8% in Calif and up 2% in each of Fla and Tex compared to same week in 2021.
While Topo Chico and Simply Spiked drivin' off-prem gains for MC (see last issue), Blue Moon and Peroni continue to grow strong double-digits in on-prem channels this yr. Blue Moon $$ grew 18% in Nielsen CGA data and "recovered more than 90% of the tap volume it had in 2019," co shared in blog post. Peroni $$ jumped 46%, volume +39% in Nielsen CGA, while recovering 86% of total tap volume vs pre-Covid. Blue Moon still moves "about half of its volume through the on-premise," co added. Recall, Blue Moon all-channel revs grew high-singles and Peroni grew mid-teens thru 1st half of 2022 vs year ago. Suggests revenue growth for both brands continued thru most of Q3 as Blue Moon family off-prem $$ down just 1.4% for 12 wks thru Sep 4 in IRI multi-outlet + convenience data and Peroni $$ grew 2% for period.
Following a very active 2021 when it did 3 deals, Try-It Distributing (the Vukelic family) is at it again, striking deal to buy 1.5-mil-case Sanzo Beverage, upstate in Olean, NY. Deal expected to close in Q4. Sanzo also sells Heineken, Southern Tier and other brands, but is reportedly about 90% AB. Try-It's Balkan Bev arm (Red Bull) already in that territory and so there will be synergies. Then too, this deal links up territories of Try-It and eastern NY arm Saratoga Eagle.
More forced consolidations. In state of WA, Constellation sent "black roses" to AB distribs Olympic Eagle, King Beverage, Sound and more, with volume totaling between 1.5-2 mil cases. Olympic Eagle alone reportedly over 1 mil cases. Like in CA, STZ notified these distribs it wants to move under threat of termination. Under WA law, a supplier can move for FMV. Columbia already sells big % of Constellation in state so will likely look to purchase large portion of this volume. Columbia very active recently as it also signed on to sell Sazerac portfolio in state starting Oct 1, and do a 50-50 JV with craft-centric Scout Distributing in ID. Odom likely to bid on another chunk of Constellation biz, INSIGHTS hears. Odom also in process of merging with Stein Dist.

