Beer Marketer's Insights
Prices may have moved into negative territory in latest gov't data but 7-Eleven chain will be heading in other direction in stores after experiment in absorbing cost increases exacted severe margin hit. So now it's following example of rival Circle K in sharing more of that burden with customers, its execs indicated on Q1 earnings call, as reported by C-Store Dive.
PEOPLE: Campbell Recruits Pratt to Run Meals & Bevs Unit; A-Game Adds Ex-Pepper Herran to Board
Campbell Soup has recruited Jill Pratt to serve as svp/CMO of its Meals & Beverages div, including V8 brand, as of yesterday. She reports to Mick Beekhuizen, evp/prexy for Meals & Bevs. Pratt's a longtime McCormick exec, who was plucked from role at Heatonist, which offers flavor development services to hot sauce makers. She'd joined McCormick in 2008 and risen to CMO post there . . . A-Game, the sports drink backed by Johnny Damon, has recruited former Keurig Dr Pepper exec Pedro Herran to serve on its board. As one-time evp for corporate strategy at Dr Pepper Snapple Group, Herran brings familiarity to system in which A-Game is testing in some areas, with other runs at Sara Lee and DPS' parent Cadbury Schweppes. He's currently CFO of Infinity City Maya, theme park being developed in Cancun, Mexico. Also joining A-Game board is Sue Klug, a grocery vet who's served in roles at Albertsons, UNFI and Catalina.
Early-stage bevcos may be whining about how hard it is to raise capital these days, but the flow of investors' capital into funds is continuing, meaning there are gobs of capital out there waiting to be deployed. Latest to launch a new fund is Siddhi Capital, whose portfolio includes likes of Super Coffee and Aura Bora bevs and Mid-Day Squares chocolate snack line. It's brought in $135 mil for Fund II, tho in sign of the times, the money will be invested mainly in "fewer and larger CPG deals" with "high margin and geared toward generating positive cash flow," as Forbes summarized today. About two-thirds of Siddhi's portfolio will comprise growth-stage businesses in traditional food/bev categories with the rest in food tech. But its staff of 24 also will be exploring opportunities in adjacencies like health & wellness, beauty, personal care, pet and alcohol.
Tilray Brands Grows 25%, Gets into Black on Cash Flow; D9 Line Close to Rolling into NJ, Tex Markets
Cannabis-&-craft-beer conglomerate Tilray Brands enjoyed rise in share prices in early trading today after beating topline estimates for Q4 as its alcoholic brands continued to grab greater share of overall sales. On investor call yesterday afternoon, CEO Irwin Simon said announcement is nearing for hemp-based Delta-9 launch it's planning, with NJ and Texas among the first markets. "The formulations are complete and we are actively developing a target launch strategy," he informed investors. And he inveighed vs Canadian excise tax bite that hasn't abated despite plummeting pot prices, bleeding co of tens of millions of dollars.
Just added to the speaker slate for our 30th annual Beer Insights Seminar this November in NYC: New Belgium CEO Shaun Belongie. Overseeing by far the top craft growth portfolio of the last several years, Shaun will join presidents of other top bev alc growth companies speaking at the Seminar, including Constellation's Jim Sabia and Sazerac's Jake Wenz.
Proposed Rule to Allow VA to Reject Crossover Bevs, "Imitation" Spirits During Label Approval
Two yrs after Virginia became the first state to issue clear rules about the merchandising of alc bev brands based on existing non-alc products, the state is taking another step toward stricter regulation of those products. And that ain't all. A new proposed rule by state regulators there also targets beer or wine brands that copy spirits brands, similarly using its existing label approval process to go after products that could confuse consumers.
Casey's to Pick Up 200 More Stores in $1.1-Bil Fikes/CEFCO Buy, Blowing Past Fiscal Yr Guidance
Quickly expanding convenience and pizza chain Casey's plans to get a lot bigger, especially in Texas, with deal to buy Fikes Wholesale, owner of CEFCO c-stores. The all-cash, $1.145-bil transaction will add 198 stores to the co's footprint, pushing it to close to 2,900 stores in 20 states. About 3/4 of the acquired stores are in Texas, with 50 more in AL, FL and MS, 3 new states for the chain. Deal is expected to close in 4th qtr of 2024.
Tilray's alc bev division officially became its biggest biz unit during co's fiscal Q4 Mar thru May 2024. Alc bev revs surged 137% to $76.7 mil for the qtr, fueled by incremental sales from acquired beer and bev brands, driving the vast majority of Tilray's 25% gain to $230 mil overall. Alc bev revs were 33% of Tilray's topline and over half (53%) of Tilray's $82-mil gross profit. Cannabis revs ain't far behind with sales up 12% to $71.9 mil for the qtr, also benefitting a bit from acquisitions of HEXO and Truss. But cannabis just 40% of co's gross profit.
It was another bad week for beer. Dollar sales fell 3.5% as volume dropped 5.2% in the latest week of Circana multi-outlet + convenience scans ended Jul 21, following slightly steeper declines in previous wk to Jul 14. But including big boost over wk of Jul 4 ($$ +9.6%, vol +8.4%), fueled by holiday timing, beer's 3-wk trends started the 2nd half better than they've been: dollar sales +1% with vol -0.4%.
Diageo reported revs down 1% to $20.3 bil in fiscal yr ending Jun 30 and operating profit at $6 bil, up 8% on "exceptional items" but down 5% on organic basis. Meanwhile, Diageo spirits volume down 4% on organic basis globally, but off 5% in North America (STRs down 4%) for fiscal yr. And revs down 3% in North America too. The long run of spirits growth seems to be over for now, or at least challenged big time. Even once red-hot Casamigos down big. Revs down 22% and volume down 16%. Ongoing softness of spirits industry and Diageo as largest global player sent its stock down again. Stock down 6% today and value almost cut in half in last 3 yrs.