Beer Marketer's Insights
Announcing The RTD Report
Don't miss this definitive guide to the growing world of ready-to-drink alc bevs. For the first time ever, Beer Marketer's INSIGHTS is compiling key stats across beer, wine and spirits RTDs in one comprehensive digital report. Dive deep into this rapidly developing subsegment with data that details: all-channel volume estimates for RTD alc bevs in the US from 2019-2023; top RTD suppliers, brands and segments in 2023, plus latest developments in the 1st half; a historical look at FMB/Seltzer/Cider shipments vs Total Beer since 1999; crossover brands and RTD partnerships since the early 2000s; a map and analysis of legal/legislative playing field at state levels; review of the latest developments in delta 9/THC bevs; and more! A digital version of the completed report will be sent once available September 10.
Ownership Changes: KY's Pivot Brewing for Sale; CO's Renegade Brewing Revival; Houston Merger
Several ownership changes are afoot among craft brewers across 3 different states. Kentucky-based Pivot Brewing put its biz up for sale, accepting offers only thru the end of the month as it looks to quickly transition to "minimize disruption" for front-of-house staff, per sales brochure. The microbrewery and cidery is "taking offers on all or any combination of" its Lexington production facility & taproom, Louisville taproom and intellectual property, with a $430K minimum for the whole operation, owner Kevin Compton told the Louisville Biz Jnl.
Iowa's Big Grove is now the official craft brewer of the state's largest university. It struck a multi-yr mktg partnership with the University of Iowa that'll give the brand presence across Hawkeye sports and venues starting this fall. Big Grove will also host Hawkeye-themed events at its taprooms, along with promos including a soon to be launched "Game Day Ticket Giveaway."
BrewDog's US Operating Losses Highlighted by Scottish Sun; EBITDA "Expected to Be Positive" in 2024
BrewDog USA posted nearly $27 mil in operating losses over the last 2 yrs, Scottish Sun highlighted in recent article citing SEC filings that CBN reported on in May. Recall, while BrewDog USA revs grew strong double-digits to $50 mil in 2023, it recorded nearly $13 mil operating loss in 2023 following a $14 mil loss in 2022. Since 2015, BrewDog parent co invested $82 mil on USA operations, according to Scottish Sun, including $12 mil in 2023 and over $23 mil in 2022.
The Nations Brewing, parent co of Bravazzi Italian hard sodas, has quietly built a unique portfolio of small TN craft brands as it revived the Bravazzi brand in TN and beyond. On top of its acquisition of Nashville-based Fat Bottom Brewing and its co-packing biz, Nations acquired TN's Music City Beer Co, a regional domestic lager brand, as well as WanderLinger, a Chattanooga-based craft beer brand rooted in outdoor lifestyle branding, co-founders Josh Buckley and Andy Heiman shared with CBN. They've made a lot of investments" in brewing capacity and capabilities over the last 2 yrs, now employ ~25 workers and counting, and they're interested in more brands that fill portfolio gaps, thru both innovation and "opportunistic" M&A.
Non-Craft Drinkers Just Don't Like It, Surveys Show; Brewery Visitors Up, But Visits Flat
Flavor drives drinking decisions. So when folks who don't drink craft beer often are asked why, the most common answer is "I don't like the flavor," results of the Brewers Assn's annual Harris Poll show. It's easily the most common answer among key younger legal drinking age adults, reported by 60% of 21-34 yr olds who drink but rarely if ever craft, BA staff economist Matt Gacioch shared last wk in joint presentation with org's chief economist and strategy veep Bart Watson.
Craft Struggled in July 4 Scans; $$ Down 5%, -0.5 Share for 2-Wk Period Thru Jul 7 (Ex-NAs)
Craft beer took it on the chin in tracked off-prem channels during key July 4 holiday period, especially excluding non-alcs. While total beer $$ were down 1% with volume -2.6%, craft sales slipped 5% with volume down 7% for 2 wks ending July 7 (the Sunday of July 4 weekend) in Circana multi-outlet + convenience data. So craft beer shed nearly 0.5 share of beer $$ to 9.7, slipping to 6th-largest beer $$ segment tracked by Circana, behind imports (25.5), domestic premium (23), FMBs (11.8), subpremium (10.4) and superpremium (9.8). Keep in mind, that's excluding NA beer, which grew nearly 31% and gained 0.25 share to 1 share of beer $$ for latest 2 wks. Since craft NA brands are driving majority of NA category growth, total craft with NAs is still ahead of superpremium as #5 segment overall, improving segment share loss to closer to -0.3 share.
States Reign, Pick Up Reins & "Massive Change" Unlikely at TTB: Attys Weigh Hemp, End of Chevron
While states try to "rein in" the "flood of intoxicating hemp beverages," the feds keep delaying major regulatory action. And the "watershed" Supreme Ct decision striking down earlier deference to agencies may not shake up too much at top US alc bev regulator TTB. So explained attys from McDermott Will & Emery, Christine Dower and Alva Mather, respectively, during mid-yr webinar today.
AB Ritas Back to Growth Thru First Half of 2024 Scans; Seltzer Still Dragging AB Beyond Beer
AB's top FMB brand family, Ritas, is back to growth thru first half of 2024 in Circana multi-outlet + convenience data. Sales grew 2% to $40 mil YTD thru Jun 16 including +5% for last 4 wks, putting Ritas currently on track to grow in scans for the first time since 2014. It's fallen a long, long way since then, from netting $530 mil in sales in 2014 scans to just over $87 mil in 2023 Circana MULC. But Ritas remained AB's lead FMB brand thruout, now getting some growth with original Lime a Rita plus incremental gains from newer flavors. Combo of Ritas growth, fast-paced gains from Cantaritos hard soda growth (+385% to $18 mil), MD 2020 Spiked (+33% to $4.6 mil) and Hoop Tea (+312% to $3.5 mil) propelled AB flavored malt bevs up 18% collectively to $68 mil. AB FMBs now outsell its sugar-based seltzer portfolio YTD.
An interesting rap on historical rise in distrib valuation over last 15 yrs sent to INSIGHTS by an ex-AB employee. "Having worked for a brief time at AB," the exec said, "I don't think their control over distributor valuations gets enough attention." He's speaking about the old AB. How did AB control that, according to this source? He pointed to 2 ways in particular. "1) If a [deal] price yielded a DCFROI (Discounted Cash Flow Return on Investment) that was lower than AB's internal cost of capital, they would decline it. Reason is due to the risk that the new owner would then underinvest in fleet, service, sales, marketing, etc. in order to generate an appropriate return. 2) Early in the days of distributor turnover (90s), AB often offered plum markets to individuals and even helped them buy using ABICC [co's distrib investment arm], instead of allowing the market to determine the right price/buyer." Those 2 practices kept valuations lower than they would otherwise have been during the Busch family era, according to this source. "Obviously, InBev's acquisition eliminated both practices, and IMO, that's been the single biggest driver of multiple expansion in this period."