Beer Marketer's Insights
Small FMB brand Bravazzi hard Italian soda is "back from the brink and growing triple-digits," co shared with Craft Brew News (as sibling pub INSIGHTS Express reported yesterday). And parent co of TN's Fat Bottom Brewing is leading its revival thru unique approach for an FMB brand.
No surprise that as craft brewers become bigger, less of their volume tends to come from onsite. But Brewers Assn veep of strategy & chief economist Bart Watson outlined how quickly that biz model typically shifts in short but interesting post examining onsite vs distributed benchmarks by brewery size. Onsite sales make up 2/3 of weighted avg mix for craft brewers between 500-1K bbls, he showed. But that drops to 30% for 2-4K bbl brewers, 14% between 5-10K bbls and just 5% for those within 25-35K bbls.
As Craft Stays Soft in Scan, Shifts Within; Sudden Seasonal Strength; Vendor & Brand Shuffles
With craft dollars still down mid-singles and volume off a bit steeper in late May and early June, the segment entered summer under pressure in Circana off-premise scans. Craft slowed further in convenience, $$ down 4.6% for 4 wks thru 6/16. So segment trends in the channel converged with its steadier softness in foodstores, where craft slipped 4.8% for 4 wks. And craft volume was down steeper in c-stores than food for the period, -6.8% vs -5.9%. But given its relative size in each channel, the segment shed far more share in grocery, -0.7 to 18.3 share of beer $$ for 4 wks. It slipped just 0.2 share of $$ in c-stores to 6.
From start to finish, the Natl Conference of State Liquor Admins places state-based variations in alcohol policy front and center. It's almost as if it can't help it. Stark differences showed up in discussions ranging from the treatment of non-alc beer and the evolving cannabis landscape to issues of ownership, tied house and more. Like those policies, the meeting itself demonstrates the 21st Amendment's unique, controversial and crucial section 2, handing off most alcohol regulation to the states. So is it any surprise that among the most fundamental and recurring tensions facing alcohol regulators and attys is the interaction between the 21st Amendment and the dormant Commerce Clause (DCC), which seeks to remove undue barriers to interstate trade?
The average 21+ adult drank about 15% less beer in 2023 than they did a decade ago. Consumption eroded slowly over the last 15 yrs, but sizable industry drops in the last 2 yrs put a real dent in US beer drinking. Avg consumption declined 9% just since 2021, including a near 6% drop in 2023 alone, we figure based on Beer Inst state data and govt population estimates. (Both data sets are preliminary and subject to revision.)
Atomic Moved to Beer Distribs in IL, IN; Buzz on BuzzBallz, Faster Growth; High Noon New Heights
How many spirits and wine suppliers will end up choosing beer distrib networks as their primary route to mkt? Since Sazerac's earthquake moves from RNDC in mid 2022 and early 2023 to primarily beer houses in over 20 states (see Vol 54, No 1), that's one of the big industry questions looming. Between Sazerac's move, its big-time BuzzBallz acquisition, Gallo's new dedicated malt bev unit thru acquired Montucky Cold Snacks and other spirit RTD brands, two major alc bev players are raising lots of eyebrows and distribution lines are blurring. Another top spirits RTD co, Atomic Brands (Monaco), recently announced similar moves in IN & IL, choosing to switch from RNDC and Breakthru to an array of MC & AB distribs there, led by Reyes. All while an increasing number of new-to-world RTDs like BeatBox and Surfside are expanding rapidly, mostly thru beer networks. This trend bears watching.
Last yr, US brewer profits declined for the first time in yrs, perhaps the first time in ABI/MC era. Why? Recall, AB alone took a $1.3-bil hit to US operating income in 2023, dropping from $4.9 bil down to $3.6 bil, following Bud Light crisis. For many yrs before that, AB US oper income didn't grow but held steady (within 1-2%) of $4.9 bil. Meanwhile, Molson Coors and Constellation grew profits over a half bil in US between them in 2023. But that didn't even make up for half of what AB lost. Yet midway thru this yr, it looks like US brewer profits will rebound.
Sometimes as a scrappy startup you can't stand too much on ceremony. That seems to have been attitude of Heywell team after abrupt collapse of Foxtrot c-store chain left stranded a cobranded flavor dubbed Sparkling Lemon Fizz. It was intended as followup to last year's collab, Energy + Lift Cherry Limeade, with its Chicago neighbor, which then was operating stores locally and in DC and Texas.
PRODUCTION: SunOpta Boosts Oatmilk Output by 60% with Now-Live Expansion in Modesto, Calif
SunOpta has opened the kimono a bit on oat extraction plant in Modesto, Calif, that just completed $26 mil expansion, 2d-largest in co's history behind greenfield plant in Midlothian, Texas. Minneapolis-based co said oat extraction line went live last month using proprietary enzymatic processes to break down whole oats into a liquid oatbase that's then finished into oatmilk, plant-based yogurt and ice cream, boosting annual oatmilk production capacity by 60%. With expansion, plant now totals 168K sq ft of production space, adding 17 jobs to payroll that now totals 208. Recall that SunOpta has set as key strategic differentiator its establishment of diamond-shaped network of US plants to bring production close to customers and slash freight miles and carbon emissions. The other 2 are in Alexandria, Minn, and Allentown, Penn.
The new-sku machine that is Tilray Brands is making anticipated push into non-alc beers with a line called Runner's High that's breaking in Atlanta base of its SweetWater Brewing holding, with expansion markets to be announced soon. The new line infused with hop terpenes debuts in trio of styles that keep calorie count well below 100: Golden Wheat (90 calories), Raspberry Wheat (70 calories) and Dark Chocolate (60 calories). It had been anticipated since early spring (BBI, Mar 15). The brand takes a by now well-trod path in seeking to associate itself with healthy outdoor lifestyle of running community, terrain long staked out by NA beers like Clausthaler and Athletic, along with electrolyte-rich but alcoholic Sam Adams 26.2 offering that's tied to Boston Marathon. "We want Runner's High to be the 'beer of choice' of runners and their community of social and casual runners, not just elite athletes," per CMO Prinz Pinakatt, a Coke, Vita Coco and Danone vet who came aboard in Feb. It's breaking at Peachtree Road Race in Atlanta on Jul 3-4, deemed the world's largest 10K running event drawing 60,000 participants, both amateur and pro.