Beer Marketer's Insights

Beer Marketer's Insights

While 5th circuit court ultimately dismissed Future Proof's motion for preliminary injunction against Molson Coors' Vizzy for trademark infringement against its Brizzy brand, Future Proof now sez court also denied MC's motion to dismiss federal infringement case. So case is alive and well in Future Proof's eyes. Latest ruling "paves the way to now proceed through a discovery phase, where Future Proof intends to fully explore the actual confusion that has been occurring in the market…and finally to a full trial on the merits," per press release. Yet "Future Proof continues to live in fantasy-land, not reality," according to Molson Coors statement. "The courts have ruled in our favor multiple times in this case, and they have repeatedly denied Future Proof's request for a preliminary injunction. This ruling simply means the case will proceed, and we are very confident we will prevail because Future Proof's belief that it is entitled to market exclusivity on fizzy-themed beverage names is completely misguided."

Handful of up and comin' beyond beer cos in different subcategories are finding different paths to expansion and innovation heading into 2021, showcased on Brewbound Live panel earlier this week. Lone River Beverage is rapidly expanding capacity while lookin' to develop "innovation pipeline beyond" main Ranch Water hard seltzer line with more "tequila-inspired" seltzers and FMBs, founder and ceo Katie Beal Brown highlighted. Recall, Lone River added FX Matt as contract supplier to boost capacity in northeast and is close to adding west coast capacity too, allowing co to add variety pks and new Prickly Pear flavor to portfolio for starters (see Dec 4 issue). In "ranch water" seltzer mkt that's becoming more competitive with brands like AB's Karbach comin', Katie feels that "authenticity of our brand and story" has "accelerated our growth" and ultimately is "hard to manufacture and recreate." Plus, it can provide "additional awareness in our subcategory." And ecomm delivery aggregates like Drizly and GoPuff have been "impactful for us," she noted, since they also provide indie accounts with additional data to help "determine some of their product mix and what they're bringing in stores."

Just a month after purchasing Georgia-based craft brewer SweetWater, Canada cannabis co Aphria just agreed to merger with Tilray, AB InBev's cannabis partner there. All-stock deal "will create a new powerhouse in the pot industry," sez The Street, "with an equity value of about" $3.8 bil (US). Combined 12-mo revs for Aphria and Tilray pegged at C$874 mil, well ahead of Constellation partner Canopy's C$477 mil for 12 mos thru Sep 2020. Just like SweetWater, Tilray deal viewed as expansion play in US, and Europe. "I realized that Aphria needed to expand out of Canada," ceo Irwin Simon told Bloomberg, "and merging with Tilray was a great answer because it's a US-domiciled business with great international assets." Aphria now hooked up with a craft brewer and a mega brewer and voiced an "interest in using Tilray's beverage facility in Canada to get Aphria into making drinks that contain THC," Bloomberg added.

Arlington Capital Advisers' JB Shireman gave CA Craft Brewers Assn a wide-ranging overview of important shifts in supplier power and their clout-in-the-house with distribs (among lotsa other topics). He looked at over a dozen top supplier "power brokers" and how "dynamics are shifting" between them, which gives some suppliers "disproportionate power" with both distribs and retailers. JB is 34-yr industry vet, worked for New Belgium for 13 yrs, working on craft M&A for about a decade. Arlington advised on such prominent recent deals as Dogfish Head to Boston, New Belgium to Lion/Kirin, SweetWater to Aphria. So JB certainly has had bird's eye view of industry evolution and provided larger perspective to CA craft brewers in lotsa quick takes, excerpted here:

Recall, California Atty Gen's office started looking into craft brewer access to mkt in the state as well as recent forced consolidations (see Dec 8 Express). Now, here come public health advocates at Alcohol Justice (AJ), usually a voice for stricter regulations on alcohol access/mktg, higher taxes, etc asking CA AG's office to "independently investigate ABI's attempted takeover" of Ace Bev in Los Angeles "to determine the extent of that acquisition's likely anti-competitive effects on the California beer market, along with the ensuing duopoly that will be established there between Reyes" Holdings LLC and ABI in Calif. That "takeover" isn't "attempted," it already happened. Ace deal closed last Friday, so unclear why Alcohol Justice thinks eggs can be unscrambled. But it's another indicator that antitrust is increasingly in air these days.

Put this turbulent year in your rearview mirror and join Beer Marketer's INSIGHTS for a timely update on the news and numbers that drove the US beer biz through 2020's extraordinary twists and turns. Get your arms around this wild year at the next Beer Insights Webinar: 2020 The Year in Beer, coming January 27, 2021 at 1pm Eastern. Get an early read on key industry data points, track the major shifts and uneven impacts of Covid-19, zero-in on seltzer's trajectory, understand the implications of pandemic-era policymaking and advocacy efforts, plus plenty more. Don't miss this exclusive 90-minute webinar presented by BMI prexy and publisher Benj Steinman with long-time executive editor Eric Shepard and their sons, David Steinman and Christopher Shepard. Register before the end of 2020 and save 20%:

Nick Kelly, AB's veep of Partnerships, Beer Culture & Community, handling its partnerships in sports, music and entertainment, is leaving co to become prexy of Major League Soccer expansion team Charlotte FC, per Sports Business Journal. Nick, who joined AB from NASCAR, will start new role in Feb and team doesn't begin play til 2022. AB hasn't immediately named a replacement, "but there are a handful of internal candidates," being considered, per report. Nick is quite familiar with MLS league given that AB has sponsorship deals going with 13 teams. Over past few years, "Kelly helped lead a radical sponsorship initiative under which properties sponsored by the brewer were rewarded with incremental payments if they met specific objectives, both on the field and off," noted SBJ. In 2015, Nick was part of AB team that "renegotiated" 70 of 88 "domestic team partnerships" with pro sports teams, under Lucas Herscovici, who was veep of consumer connections at time, noted NY Business Journal a few yrs back.

Wil Fischer Cos of Springfield, MO recently closed on 1.5 mil case deal to buy O'Malley Dist in St Joseph, MO. Deal will put Wil Fischer at about 5 mil cases in 2 states. Recall, it bought half mil case Lueke Dist in KS in 2018, and Schatz in Kansas City, KS in 2014. O'Malley deal went for over 5x GP, INSIGHTS hears. With 3 deals in 6 yrs, Wil Fischer is clearly a Midwest consolidator (it tried to buy at least one more as well). Smaller distribs in midwest are selling more frequently. Tho AB lost volume each of the last 5 yrs in Mo (2015-2019), drops are mostly 1-2%. And AB still at 59 share in MO. It sold 32 mil cases there in 2019.

Here's a brain-twister: Pabst is partnering with big liquor to bolster its FMB portfolio. But that's alc bev biz in 2020 for ya. Pabst and Brown-Forman announced "exclusive long-term partnership for the supply, sales and distribution of Brown-Forman's Jack Daniel's Country Cocktails brand within the United States and in domestic military markets." Partnership goes into effect April 1, 2021, giving Pabst "exclusive rights to sales and distribution of Jack Daniel's Country Cocktails and any future Jack Daniel's flavored malt beverages." Co expects Pabst to create "greater scale" for Jack Daniel's FMB brands while improving Pabst position in FMB space, both Pabst gm Matt Bruhn and Brown-Forman svp and prexy of USA and Canada John Hayes noted.

Stella Solstice going yr-round starting next Monday in conjunction with Winter Solstice, Stella veep Peter Van Overstraeten told INSIGHTS. AB got "great performance from the git-go" on Stella Solstice (which used to be Stella Summer Solstice), according to Peter, with 80% of consumers new to the Stella franchise. Stella "very successful" with Hispanic consumers. Next year, Stella Solstice will be available in 25 oz cans in Mar and 14 oz aluminum bottles later in Spring, in addition to 6-pack and 12-pack bottles.