While Mo distribs Major Brands still in litigation with Diageo and Bacardi over their termination of it for key liquor brands, Major secured its position as the “3d powerful player” for statewide (and key St-Lou area) liquor, wine and beer distribution with announcement it will purchase Missouri Bev Co.  So said Schlafly co-founder Dan Kopman about the deal, who called it “great news for Schlafly and great news for Major Brands.”  In aftermath of terminations in 2013 (Pernod terminated Major too, but came back aboard), Schlafly faced possibility of tuff decision if Major didn’t survive.  AB network ain’t a great option as it would not provide statewide coverage and MC houses already pretty full.  But Schlafly “stayed steadfastly committed to Major Brands” all along, Dan insisted.  And combo of Major buying Garco Wine Co and now MoBev solidifies Major as significant wine, spirits and beer distrib.  Major had Schlafly and Four Hands; MoBev brings Founders, Rogue, Civil Life, others and imports.  Another interesting piece to story: big wine/liquor and increasingly beer distrib Wirtz owns piece of MoBev so it now “has transitioned into a Wirtz family personal investment in Major Brands,” Major’s ceo Sue McCollum told St Lou Biz Jnl.   

“Repeal Prohibition, Again,” headlined NY Times lead editorial on front page of Review section yesterday.  Then added full page of analysis.  “The federal government should repeal the ban on marijuana,” Times concludes, supporting bill that would eliminate pot from Controlled Substances Act, require fed govt to permit growers/distribs and “have it regulated (just as alcohol is now)” by FDA and BATF/ TTB.  One key to Times’ logic is pull quote from front page: “Marijuana is far less dangerous than alcohol.”  What’s more, “a decision about what kinds of substances to permit, and under what conditions, belongs in the purview of the states, as alcohol is handled.”  In addition to big focus yesterday – about poll findings, failure of drug war, social costs of pot ban, etc – Times promises to follow up with more from editorial members and “supplementary material.”

Day before Times took plunge, editorial in The Oregonian, (pot legalization on Oreg ballot in Nov) modestly embraced legalization, saying it’s “not a terrifying prospect.”  Oregonian played alcohol parallel too, noting “if the state trusts adults to drink beer and wine responsibly, there’s no fundamental reason it shouldn’t do the same with pot.”  Added that projected tax revs from pot would “outstrip beer and wine” and “such an addition to the state’s sin-tax stable is nothing to shrug off.”   See current edition of beer marketer’s INSIGHTS for more pot news/alcohol parallels.      

Announcement last week that Molson Coors ceo Peter Swinburn to retire at the end of the year after 6 yrs as ceo “unsurprising” to at least 2 financial analysts, yet signals no ABI-SAB deal with Molson Coors picking up the rest of MillerCoors coming soon.  “If that deal were imminent, I can’t believe Swinburn would be retiring at year-end,” Edward Jones analyst Brian Yarbrough told Bloomberg.  And Stifel’s Mark Swartzberg wrote that transition “implies conversations” about Molson Coors buying out MC “are not underway.”  He puts odds at 50-50 that those talks end up in deal over next 12 mos, tho adds that Altria “open to receiving cash for its 27% stake in SABMiller,” which would lower financing costs for ABI. 

Peter will leave ceo/prexy role and board position, which go to Mark Hunter.  Mark most recently has been ceo/prexy of Molson Coors Europe.  He got that spot in Jan 2013, had previously run Molson Coors Central Europe and UK bizzes.  He also did stint in Canada.  Like Peter, Mark was with Bass Brewers when Coors bought it in 2002.  So this is natural succession.  Both Mark Swartzberg and Goldman Sachs’ Judy Hong pointed to improving profits/margins of TAP’s biz under Mark.  He is “a highly regarded executive with proven track record in marketing, integration and cost control,” wrote Judy.  Mark “is a good industry guy” and “experienced manager,” dittoed Morningstar’s Philip Gorham (recall, an ABI-SAB skeptic), “but he’s not experienced in mergers and acquisitions.”  

Peter Helped Build a Global Brewer Peter’s legacy includes taking Coors from 10 share in US 2002 when he joined to now running a global brewer, as Denver Biz Jnl noted.  When Molson Coors formed back in 2005, it sold just under 46 mil bbls.  That slipped to 41 mil bbls in 2011, as US, Canada and European volume challenged.  But Molson Coors bought Star Bev in 2012 and its 2013 volume exceeded 50 mil bbls.  That’s about half of #4 global brewer Carlsberg and dwarfed by AB InBev’s approx 323 mil bbls of beer last yr, but co believes, as Peter said in release, “Molson Coors has the right strategy in place, a strong financial foundation” and great people to move forward.  Since 2009, year after Peter took over as ceo, Molson Coors volume grew from 42.6 mil bbls to just under 51 mil bbls last yr.  Net revs increased from nearly 40% from $3 bil to $4.2 bil.  Gross profits expanded by $355 mil, 27%.  Operating income, including its share of MillerCoors before special items (they are always a factor in Molson Coors reports), up $219 mil, 28%, thru combo of synergies, cost cutting, pricing.

In discussion with INSIGHTS in early Apr, Peter focused on Molson Coors’ “great cash flow,” “stable markets” and “great balance sheet.”  On M&A, Peter said Molson Coors not “desperate” to do a deal, but noted the StarBev purchase had “gone well,” and  acknowledged “nothing stays the same” in beer biz.  Amidst speculation that AB InBev would make bid for SABMiller and likely sell latter’s stake in MillerCoors to Molson Coors, TAP stock went on tear earlier this yr, jumping from $56 at end of 2013 to near $75 on Jun 20, tho that’s drifted back to $72.  Peter declined to say much about buying MC at analyst mtg around same time beyond acknowledging there were synergies to be had if it happened. He told Denver Biz Journal: “My job is to make sure the business is in the right position.  In terms of being a target, the best defense against that is to be very, very successful and make sure no one else can afford you.”    

Fox Biz profile on Peter day before retirement announced talked of his “humble beginnings” in Cardiff, Wales, “peddling Bass to bars and clubs” in mid-70s and climb up brewery ladder to running Coors intl biz, then Molson Coors’ Europe/Asia ops before becoming ceo in 2008. Experience at street level up thru ranks of global co taught Peter importance of team, he told Fox Biz: “It’s not about the individual.  And I think that you have to shape that (idea) from the top.”     

“The Brooklyn Brewery is hoping to build a $70 million, 200,000 square foot facility on the western shore of Staten Island,” reported Crain’s NY Biz this morn.  Crain’s cites a draft progress report from New York City Regional Economic Development Council “tracking various large scale projects”; an advisory board is “working with the brewer to locate a suitable site.”  A public hearing is scheduled for today on this and other projects “some of which may eventually receive grants or tax incentives from the state.” 

Brooklyn seeks a campus between 20 and 25 acres with direct rail access and close to the NY/NJ port system, “stipulations that would make Staten Island an ideal location,” noted Crain’s.  But Brooklyn also considering “a range of locations” in the mid-Hudson region.  New site will create 92 full-time jobs and 240 construction jobs, sez Council.  Final site selections by the end of 2014 and “brewery expected to be fully operational by the end of 2017.”  Brooklyn Brewery partner, the Italian bottled water co named Galvananina, could also base its North American operations at that facility.  Brooklyn president Steve Hindy sits on this Regional Development Council, but “has recused himself from any decisions regarding state aid to the company,” noted Crain’s, citing officials.

Goin’ and blowin’, craft keeps on growin’, up high-double digits thru end of Jun, according to Brewers Assn release today, in what’s at best a flat US mkt.  Category (including new “craft” definition that includes Yuengling, others) up 18%, 1.6 mil bbls over 2013 mid-yr stats. Big, “sustained growth” in part thanks to consistently growing number of breweries to 3,040, up over 500 since end of June, 2013.  In-planning count inching towards 2000 too, just about 70 shy of that at end of last month, BA reports.  At this rate, BA-defined craft will be well over 10 share of total US beer volume by yr-end, gaining more than a full share-pt.    

MC sales prexy Ed McrBrien acknowledged MC’s premium light share losses in note to distribs (0.4 of volume, 0.6 of $$), regarding 2 weeks thru Jul 12^th, according to Nielsen.  But Ed emphasized glass half full: “above premium was a bright spot.  Driven by the Redd’s franchise, Miller Fortune and Smith & Forge, we gained 0.6 dollar share” while AB lost 0.4 share in above premium.  Coors Light Summer Brew got 0.3 share of $$.  In all, MC lost only 0.3 share of $$ while AB lost 1.5 for those 2 weeks in Nielsen.  

Top 4 megabrands have fallen to 39.61 share of $$ in IRI multi-outlet + convenience yr-to-date thru Jul 13, a drop of 1.44 share (but still 42.50 of volume).  The 4 brands, Bud Light, Coors Light, Bud and Miller Lite have lost almost identical share for 4, 13-week and YTD periods, but shifts within megabrands quite striking.  Bud Light volume up 1% YTD and still up 0.7% for 4 weeks.  But each of Bud and Coors Light drops steepened to 5% for latest 4 weeks over Jul 4^th holiday, compared to 2% drops YTD.  And Miller Lite shifted from 0.7% gain YTD  to -1.1% latest 4 weeks in IRI. 

Total beer biz softened to up just 0.3% for 4 weeks and avg prices up just 2.2%.  That compared to 1.8% gain YTD for total beer biz in IRI and 2.6% avg price gain.  Virtually every top company decelerated significantly.  For example, AB and MC each flat in IRI YTD (AB up 0.1% and MC down 0.1%), tho MC STRs down over 2% all channels.  AB’s 6-mo STR # will come out later this week.  In latest 4 weeks, AB down 1.1% in IRI and MC down 2.2%.  Even Crown slowed to “just” an 8.6% gain, compared to 11.9% YTD.  And Boston up 26% compared to 31.8% gain yr-to-date.   Mark Anthony slowed to just 2% growth for 4 weeks.  Pabst, DGUSA drop-offs steepened, while NAB losses moderated slightly (down 6.4%) for weeks.  Of top 10 suppliers, only Yuengling, up 9% for 4 weeks, improved growth rate during period.  

Join us for the 21^st annual Beer Insights Seminar, Nov 9-10 at the Waldorf=Astoria in NYC.  This year, we have already lined up an exciting program featuring some of the industry’s top execs and one provocative panel.  We are proud to announce that MillerCoors ceo Tom Long, Constellation Brands ceo Rob Sands, Heineken USA prexy Dolf van den Brink, plus craft pioneers Brooklyn co-founder Steve Hindy and Deschutes ceo Gary Fish are on the program.  We’re also hosting a panel to explore one of the industry’s hottest topics: franchise law carve-outs for small brewers and other 3-tier issues.  Veteran industry attys Marc Sorini and Mike Madigan will be joined by Manhattan Beer’s chief oper officer Bill Bessette.  More presentations will be added.  The Beer Insights Seminar is one of the industry’s premier events. You won’t want to miss it.  Sign up today to take advantage of special early bird registration.  Click here for more info.  Click here to register. 

VP/GM for several-mil-case distrib of MC, wine and non-alc bevs in desirable NW mkt. Send resumes in confidence.

Some changes at top of largest distrib as younger bro’ Duke moves up from ceo of Bev Group to ceo of all of Reyes Holdings (slightly older brothers Chris Reyes and Jude Reyes own biggest pieces of co) in move that seems designed to facilitate better integration of all the Reyes Holdings companies.  Recall, Reyes Holdings did about $22 bil in revs last yr across Martin Brower, Reinhart and Reyes Bev Group cos.  Meanwhile, Ray Guerin moves up from coo to chief exec officer of Reyes Bev Group.  “Ray has introduced unprecedented levels of innovation, structure, quality and profitability to Reyes Beverage Group,” wrote Duke in internal message.  Ray “forged strong partnerships with our suppliers, dramatically improved service to our customers and created efficiencies that have outpaced the competition,” Duke added.