Idaho’s House of Representatives passed bill barring brewers from having financial interest in distribs/retailers and vice-versa, according to Idaho Reporter.  But same bill maintains exception that brewers under 30K bbls can have interest in a wholesaler (same cap for self-distribution); distribs barred from owning piece of any brewer.  Then too, there are both brewpubs and small brewer taprooms in Ida.  So target here was big brewer branches.  Indeed, the bill's "Statement of Purpose" concludes that "currently, Idaho does not have any 'brewery-owned branches' nor distributor-owned breweries," and that this bill "seeks to codify the independence between the manufacturing tier and the distribution tier," albeit "with limited exceptions."  Current bill also allows temporary financial interest in distrib if there’s a service problem and/or in some transfer situations.  Recall, anti-branch bill stymied in Ida House last March. 

Rep who supported bill said “no one tier should be able to force its will on the others.”  Another supporter warned that if legislature doesn’t prevent one tier from buying another, “tier one may eventually buy up all of tier two and maybe even tier three.”  A 3d rep offered “the other side” of story, noting a distrib “may be struggling financially” and AB might be “willing to help them out,” possibly save the biz and jobs, “and that’s why the brewing companies are opposed to this bill.”

 

Elsewhere, northwest grocery chains continue to drive privatization effort in Oreg.  They just got boost via $100,000 contribution from natl distiller assn DISCUS to Oregonians for Competition which is heading up the effort.  That’s notable since DISCUS has always maintained “neutral” stance on privatization, as prexy Peter Cressy reiterated at NY press conference last mo.  “DISCUS does remain neutral on the issue of privatization,” sr veep Frank Coleman told us yesterday, “and we have great respect for our Control State partners.  However, we learned from Washington State and have made the decision that whenever a privatization initiative or legislation gains momentum in individual Control States, we will work with the authors to ensure that if privatization passes, both our commercial needs and our consumers’ need are best achieved.”  At NY mtg, Peter had said if states privatize they have to do it “the right way.”  Historically, distillers have sought equal access/route to market in states, reasonable tax levels, no franchise protection laws, broad consumer choice, etc. 

“The pendulum is gradually swinging from value back to volume this year” at AB InBev, Redburn’s Chris Pitcher wrote last week.  That’s not just in US.  “After three years of lackluster volume performances but 300 basis points of organic EBITDA margin expansion, it is critical to show the business can grow volumes in Brazil and stabilize share in the US,” he added.  He expects pricing to be “less of a drag on volume growth this year,” and that low cost of goods inflation will allow the significant boost in sales/mktg support that ABI execs have promised.  Chris shares ABI execs’ “confidence” that US beer biz will improve this yr; he sees total US volume flat. He also expects that “$200 million of the $700 million organic incremental sales and marketing expenditure will be in the US, which equates to a 140 basis point increase rate of investment as a percentage of net sales.”   It’s “critical that AB InBev starts to show improving trends in its market share” here, Chris reiterated, and “we would not want to see much more share erosion as over time this would threaten the level of concentration in the US market.” 

AB has “not been under-investing in core brands” in US, Chris points out.  But it faces “structural portfolio problem” of having small share of its biz in craft/import (8-10%, he estimates) and over-weighted in subpremium and premium.  To stabilize mkt share, AB not only has to grab “disproportionate share” of high-end growth, but “work to stem the recent declines in the premium light category.”  Chris does not specify how AB can actually do that but notes that “significant investment, both above-the-line and in digital, behind Bud Light and Budweiser around the Super Bowl will be central to this ambition.”  All in, Chris expects possibility of AB share decline of just 15 basis points this yr, (vs 50 in 2013), “which would be a significant achievement and good payback from the marketing investment.”  That investment, by the way, “can be funded out of improved gross margins,” Chris thinks, via combo of price/mix and lost cost inflation, so that AB can “grow EBITDA margins by some 20-30 basis points in US” this yr despite the boost in sales/mktg spend.   

Remember, BBI readers: massive Natural Products Expo West opens this Fri at Anaheim Convention Center in Anaheim, Calif., with roster of all-natural bev exhibitors that well exceeds 100. Bursting at its seams, show this year even put some exhibitors in nearby arena, which in past has sometimes been hosting NCAA Final Four games during duration of expo. BBI plans to be there with extensive coverage. Info at ExpoWest.com.

Note to BBI readers: This issue represents 5th biz day in a row that BBI has published. Does that mean we've gone daily now? Not at all, but we will up our frequency when the flow of news warrants it. Remember that any issues published each year beyond the promised 90 are not counted against readers' subscription terms but are regarded as bonus issues, as we seek to underpromise and overdeliver to you our readers.  

Marketer of Icelandic Glacial bottled water finally is ready to try again on putting co in hands of an outsider, recruiting as its North America ceo the Nestle Waters North America vet Reza Mirza, who recently exited post of prexy of cap-dispensed Activate Drinks during transition in ownership there. Kristjan Olafsson, who launched brand with his father Jon, told BBI that move brings on seasoned exec with the marketing skills that Icelandic Glacial needs now that it's ensconced in Anheuser-Busch distribution network and has fairly solid retail presence but still needs to step it up in marketing. Tho brand has been exiting some retail accounts deemed non-core, he said, brand sales rose 12% in accounts it retained last year on heels of repackaging and repositioning that dialed up cues signaling brand's Icelandic heritage. Kristjan will retain some involvement in day-to-day operations, particularly in on-premise side, but addition of Mirza will free him up to focus more on product innovation and global expansion. Recall brand had tried earlier to bring in seasoned outside exec as ceo in 09, with Coke and Cott vet John Shepard, but his skills proved poor fit at still-young brand and Olafssons soon enough resumed their direct oversight of co activities. Time is right now for sustained marketing push, Kristjan argues.  

Heineken house Phoenix Beehive, which has steadily been building its base of NA brands, appears to have inked deal to acquire Mid-Hudson distribution operation of Dr Pepper Snapple Group, which is believed to do nearly 1 mil cases of Snapple and other products. Move, if confirmed, would seem to further signal commitment to NAs by once on-and-off distributor, which in past coupla years has added Polar seltzer line, Rockstar Energy and newer brands like Nu Aquos protein drinks, Mercy hangover preventives and Kombucha Brooklyn. No initial response from Phoenix Beehive contact, who was out of office today, but several sources said deal is effective Apr 1, allowing DPS to exit ownership of 800K+-case house that's seen its core Snapple and other brands in decline in recent years. It's not clear yet how Phoenix plans to operate new unit, nor disposition of non-DPS-owned brands, tho one source said he believes Vita Coco coconut water might be headed to local Pepsi Newburgh indie bottler . . . Tea giant Ito En's fledgling US coffee line, Jay Street Coffee, has landed 170-unit Sprouts Farmers Market as first major retailer to carry item. Jay Street was launched last fall by Brooklyn-based N Amer arm of Ito En, best known for its Teas' Tea and Oi Ocha lines of RTD teas.  

Marketer of Icelandic Glacial bottled water finally is ready to try again on putting co in hands of an outsider, recruiting as its North America ceo the Nestle Waters North America vet Reza Mirza, who recently exited post of prexy of cap-dispensed Activate Drinks during transition in ownership there. Kristjan Olafsson, who launched brand with his father Jon, told BBI that move brings on seasoned exec with the marketing skills that Icelandic Glacial needs now that it's ensconced in Anheuser-Busch distribution network and has fairly solid retail presence but still needs to step it up in marketing. Tho brand has been exiting some retail accounts deemed non-core, he said, brand sales rose 12% in accounts it retained last year on heels of repackaging and repositioning that dialed up cues signaling brand's Icelandic heritage. Kristjan will retain some involvement in day-to-day operations, particularly in on-premise side, but addition of Mirza will free him up to focus more on product innovation and global expansion. Recall brand had tried earlier to bring in seasoned outside exec as ceo in 09, with Coke and Cott vet John Shepard, but his skills proved poor fit at still-young brand and Olafssons soon enough resumed their direct oversight of co activities. Time is right now for sustained marketing push, Kristjan argues.  

Long-running search for exit by Mountain Valley Water Co's aging controlling shareholder, Johnelle Hunt, finally has reached conclusion: KC-based private-equity firm Great Range Capital is leading investor team that includes Mountain Valley ceo Breck Speed in acquisition of Ark co. Deal puts briskly growing marketer of domestic premium water that's believed to have blown well past $30 mil in sales last year into hands of PE shop that serves as family office for Brandmeyer fortune accumulated in medical devices arena. Mountain Valley cfo Bradley Frieberg also is participating in buyout, as are some other mgrs to lesser degree, while some existing shareholders have opted to roll over stakes into new entity, Breck told BBI today. As reported, co had considered taking IPO route to refinancing, but Speed said that process drew private offers, culminating in this transaction.

Mountain Valley has been rare domestic bottled water co that's been able to stake out premium niche in US market, and it's been riding wave of success in natural channel while steadily building its footprint in general market. Among other legs of co, Mountain Valley has built strong copacking biz on heels of work performed for exploding Sparkling Ice brand from Talking Rain, and lately it's been trying to steer brand called Clear Mountain that was developed in 93 as 5-gal play into more broadly available grocery brand that offers alternative to brands like Smartwater, recently landing Kalil operation in Ariz as a DSD distributor. But Breck said deal won't much change co's deliberate approach in building its core brand organically. Controlling shareholder, Hunt, from family of JB Hunt trucking concern, has been systematically liquidating her holdings as she's progressed thru her 80s. Great Range Capital, whose other investments include industrial cos Fairbank Equipment and LLL Transport, says it primarily targets controlling equity investments in Midwestern cos with revenues in $10 mil to $150 mil range.  

Energy drink sales gain "of only 4.6%" in latest Nielsen c-store data for 4 wks thru Feb 15 "is the lowest growth we have seen in years" for category, noted Wells Fargo Securities' Bonnie Herzog. Cold/snowy weather "likely contributed to soft foot traffic and weak overall results" for bevs and snacks in c-stores over 4-wk period that included Super Bowl weekend, added analyst.

Energy drink volume rose 6.7% for those 4 wks, down from 9% avg gain over past 12 wks in c-stores. Energy drink prices were off avg 2% vs -1.6% avg last 12 wks. Monster Bev volume rose 9.6% last 4 wks on avg 2% price drop. That's down from 14% gain pace last 12 wks. Monster's "relatively solid" sales gains were led by its core energy brand, which "continues to outpace companywide growth, a sign that the brand continues to have significant growth opportunity" ahead, figures Bonnie. Red Bull volume edged up just 1% (vs 4.3% gain last 12 wks) on 1.1% price increase. Rockstar volume gain accelerated to +16% in c-stores as avg price was down 4.3% last 4 wks. Coca-Cola energy portfolio gained 11.7% compared vs 15% gain over last 12 wks. Avg price for KO brands was off 1% last 4 wks. PEP energy brands were down 1% despite avg 4.4% price drop.

Another Slow Month for CSDs Investors who've lately been worried about KO and PEP growth prospects in core CSDs won't find much solace in latest scanner data. CSD volume slipped 3.7% with avg price increase of 3% in c-stores over 4 wks ended Feb 15. Sales decline of 0.8% is 3d in last 4 months for CSDs, noted Bonnie. Pricing remained solid with PEP and KO each up avg 4% last 4 wks but PEP volume slipped 4.2% and KO off 3.6%. DPS volume was down in same range (-3.9%) over 4 wks on flat pricing. An avg 9.4% price drop didn't help boost private-label CSD volume, down 7.8% last 4 wks with more moderate -4.4% avg over last 12 wks.  

SF-based Neo Bev Group will use upcoming Natural Products Expo West this Fri as platform for restaging of its Neo Superwater, which will get new skin, packaging and Web site, along with twin slogans, "Hydrate Like You Mean It" and "The World's Most Beneficial Bottle of Water." Actions are intended to better distinguish Neo from traditional spring, purified or enhanced bottled waters. Brand offers 9.5 pH and has added electrolytes and antioxidants, placing it at nexus of several fast-growing categories.  

Red Bull North America is putting heavy buy behind new TV add featuring single from Pharrell's new album that highlights affiliations across sports, music and broader culture. Against beat of "Come Get It" track from Pharrell's forthcoming G I R L album, spot features athletes involved in cliff diving, kayaking and motocross, as well as visual artists and musicians, in keeping with brand's strategy of broadening range of activities with which it's associated. Spot broke during Oscars light night in handful of markets, and is airing more broadly starting today thru Jun 30. Comprehensive media buy includes 13 major TV networks during primetime shows such as The Voice premiere, MTV Movie Awards and NBA Playoffs, as well as programs like Glee, Walking Dead, Workaholics and Family Guy. Digital buy ranges across ABC and CW properties as well as top Hulu shows and ESPN.com.