Beer Marketer's Insights
In soft drinks, Jones Soda has long staked out the "they can't really be doing this" flavor strategy with entries like Turkey Gravy Soda. In NA beer, it's looking like that's a space that Uncool Brewing would like to own. Its latest entry: Undrunken Noodles, layers onto the base beer it calls Smoke Sesh hints of chili, basil and kaffir lime "for an excellent drinking companion to your favorite Thai dish." It joins lineup that includes Strawberry Shortcake, Big Dill Pickle Pils and Rocket Pop, along with more conventional entries like Galaxy IPA and Low Cal IPA.
Tho he's a first-time bev entrepreneur, Phil Gross knows something about the realities of bev biz, coming out of family of longtime Pepsi bottlers in Midwest operating as G&J. So Chicago-based exec is determined to avoid such rookie mistakes as overcommitting to retail and DSD in earliest stages of his new brand, the mildly energizing but highly hydrating Betweener (BBI, Apr 3). With initial feedback encouraging, he and his advisor Bryon Evans of Strategy & Execution Inc have signed brand's first two DSD partners: Dora's Naturals in NY metro and FunBev in Ohio and part of Kentucky.
About 700 drinks were seized from South Australian retailers for exceeding the country's regulatory limit of 320 mg of caffeine per liter, reported News.com.au and NY Post shared. G Fuel, Bang and Raze energy drinks were found to have the highest caffeine levels, with 300 mg per 473-ml can, while C4, Ghost, Ryse Fuel, 3D and Redcon1 contained 200 mg per same size can. Health inspectors found 18 stores were selling energy brands over the limit and each was fined just under $2K. Acting public health officer Chris Lease seemed willing to give the retailers the benefit of the doubt, tho they still have to pay up. "Often, these drinks are imported from overseas and retailers do not realize that they do not comply with our regulations," he said.
Figuring it wouldn't hurt to remind consumers that Vitaminwater is from da hood, with all the flavor that connotes, Coca-Cola has enlisted Spike Lee to weave slightly vitamin-enhanced bev into rhythms of the city of brand's birth. Corner bodega? Check. Late-night food truck? Check. Brooklyn Bridge? Bada-bing! The first campaign in 2 years, "Vitaminwater from New York" effort features Lee-directed spots focused on such NY icons as pizza shops and sixth-floor walkups as well as spots from some of his graduate film students that will go out on various social media channels.
Keurig Dr Pepper continued to report solid gains in its RTD biz in Q2 while warning of a continued "muted" performance of its coffee-pod biz at time that escalating green bean prices are warring with its need to make prices more approachable. Net sales rose 3.5% to $3.9 bil, +3.4% excluding foreign exchange factors, as volume/mix growth of 1.8% augmented price realization of 1.6%. Gross margin widened to 55.4% from 53.9%. Adjusted operating income rose 11% to $970 mil. "Our consumer-centric innovation model is resonating in market, our portfolio expansion to higher-growth categories is ongoing, and we are actively enhancing an already robust route-to-market," said recently installed CEO Tim Cofer, the latter a reference to pickup of longtime partner Kalil Bottling in Ariz (BBI, May 31). When that deal closes in Q3, it will add 4,500 outlets serving 7 mil customers.
There's a bit more detail on Southern Glazer's Wine & Spirits acquisition of Horizon Bev in press release that went out shortly after INSIGHTS reported news of the deal. Notably, "we expect all existing and new supplier partners, as well as customers, to benefit from our two companies' strengths and expertise" (our emphasis), said SGWS ceo Wayne E Chaplin in released statement.
Two of the newer brewers among top-25 in scans saw sales take a tuffer turn in the latest 4 wks. Monster Brewing sales were down 5% to $35 mil for 4 wks thru Jul 14 in Circana multi-outlet + convenience data including Monster FMBs down 1.5% (Beast Unleashed Variety Pk -28%) and CANarchy portfolio down 10% for period. Remarkably, Monster Brewing was still 12th largest brewer by $$ in Circana MULC for period, outselling Sierra Nevada ($28.5 mil), Geloso Bev ($22.8 mil) and Phusion ($15.3 mil) among others.
Boston Beer shipments fell 148K bbls, 6.4% in Q2, while sales-to-retailers fell 4%. STRs down 2%, while shipments down 3.4% for 6 mos. (Depletions down 2% thru July 20 too.) With continued soft sales, Boston reduced its volume guidance to "down low single digit to zero" from "down low single digit to up low single digit." Chairman Jim Koch said: "depletions were soft in April, but improved as we moved through the quarter…. We are seeing early signs of progress on innovation and will use our strong balance sheet to invest in our brands, while returning cash to shareholders." Boston at "lower than target inventory levels," said co, which "were the result of not fully shipping into improved demand in the latter weeks of June." In other words, Boston is again having supply chain issues. "The company is working to ensure shipments in July and August build inventories back to target levels," co added.
Throwback Thursday
This week in 1996, Stroh was moving quickly to realize efficiencies after closing deal for Heileman Brewing. Stroh was phasing out 1.2-mil-bbls/yr San Antonio brewery by end of Sep and cutting 200 jobs there. Around 175 employees in LaCrosse, WI, and Chicago offices were offered temporary positions. Stroh expected to save $1.5 mil in purchasing and $3 mil in freight costs by end of yr too. Stroh kept lotsa key Heilman execs. Sr exec Joe Martino "will be responsible for sales and marketing for the combined companies," newly-minted exec veep Joe Franzem wrote distribs. Joe had held senior slots in 4 of 5 top brewers except Coors. All the moves and savings only helped Stroh stay in biz another 3 yrs before it sold to Pabst and Miller.
Clarification
: Ray LaRue started as Monster Brewing prexy on Monday. Tony Short is staying on for a period to help with transition.