Beer Marketer's Insights
A bit of good news for both US and global brewers. "We continue to expect broad-based relief" on 2024 input costs, Bernstein's Trevor Stirling wrote in report this morn, albeit with a "huge amount of regional variation." Biggest benefits likely to be in Latin America and to lesser extent Europe, as ABI and Heineken should see "significant relief" in the Americas. Tho upside also in US, where lower aluminum costs likely to outweigh other marginal increases, according to Trevor.
"Following the highest Beer Purchasers' Index reading since 2021" (in Apr), "the May index continues to show a steady build-up of distributor inventory as the industry prepares for summer," wrote NBWA. BPI "remained deep in expansion territory at 63," NBWA added, up 11 points from last yr, and "identical" to Apr reading. At-risk inventory also going down. So combo of "expansionary" BPI and "contracting" at risk" inventory "indicate a positive outlook for the warm-weather selling season," NBWA asserted. Well, INSIGHTS certainly hopes so, but a lot of industry chatter out there still about soft sales. Perhaps this holiday weekend will show some better signs.
Modelo family scored its highest US share in CA, 24.0 share of $$ yr-to-date thru May 5 in Circana MULC, showed Evercore ISI's Robert Ottenstein in recent report. Nevada is 2d at 22.6. Texas climbed from 11 to 15 in last few yrs. And in North Carolina and Colorado, Modelo family up to 14 share (Molson Coors branch sells Constellation portfolio in most of Co). IL at 13, FL at 12. So most of biggest states overindex natl share (11.6 in this data set), but NY at 10 as Corona brand family still larger there.
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Let's look at beer, wine and spirits RTDs together as one larger, still growing segment. They feed off each other, interconnect, blur and converge. Add up malt-based FMBs and hard seltzers, what NielsenIQ (NIQ) calls "wine cocktails" and "spirits cocktails" (including most brands referred to as RTDs), and this has already become a big biz collectively, still growing solidly in all, with lotsa puts and takes.
Coming off 2 consecutive yrs of steep shipments declines, it's easy to get caught up in category health concerns. But "beer does not have a category problem, it has a brand relevancy problem," RBC's managing director & global co-head of consumer equity research Nik Modi declared at Beer Insights Spring Conference, seeking to jolt audience out of pre-existing paradigms. It's been "20 years of the same narrative: woe is me, the beer category is under pressure. And you've all become frogs in boiling water," he lamented. "I get it. The numbers would suggest this narrative." But "it's really disguising the true story…. We're kinda missing the point."
Beer Distribs "Can Win," Already Are, Next-Gen Execs Show: NA, On-Prem, Macro Pros & Cons
Gallo's investment in Montucky Cold Snacks and plan to build a malt bev distrib network offers a "good kind of counterpoint to the whole category health crisis rhetoric," Gulf Dist legal/govt affairs exec veep Rebecca Maisel commented during our Spring Conference last wk. There are "obvious advantages" to using beer houses, she said, building on the comments of others. As bev categories converge, "beer wholesalers can and should win," Manhattan Beer veep Alex Bergson said, agreeing with thesis laid out by Boston Beer founder/chairman Jim Koch earlier in day. "Beer distributors can win this whole thing," Jim posited, foreseeing more distrib M&A to address blurring category lines and growing 4th category oppys. "The deck is stacked in their favor," he went so far as to say.
Imagine that: a small deal for a financially ailing beer brand that sells a little under 1 mil cases/yr at a domestic premium price point set the beer industry buzzin' with speculation since announcement last week. But make no mistake, it's a big deal when Gallo, the #1 wine co and #1 RTD spirits player with a top-10 bottled spirits biz in the US, enters the beer biz and seeks to scale up its malt bev network. Even if its entry point is just a toe in the water, Gallo is serious about its entry into beer. "We don't come to get a participation trophy," Gallo's recently promoted exec vp and gm Britt West underscored to INSIGHTS. "We come to win."
EXTENSIONS: Health-Ade Doubling Down on 'Dynamic' Flavor Combos as Its Users Reward Complexity
Health-Ade is adding greater complexity to its flavor profiles based on strong response to some of its LTOs. Among the new "dynamic pairings" it's pursuing, LA-based co is looking to hit a summery, nostalgic note with Orange Creamsicle as its 2d limited-edition flavor of the year after Mango Lemonade entry proved a hit. Health-Ade also is upgrading its Pomegranate flavor to Pomegranate Blueberry as a permanent member of the line this month, adding complexity to recipe. Co justified the move by citing strong response to multifruit offerings like Passion Fruit Tangerine and the LTOs.
Approaching a decade with their organic coffee roasting venture, pop punk band Green Day has forged alliance with Keurig Dr Pepper that will see band's Punk Bunny Coffee bagged roasts enter K-Cup pod world as well. After plying Oakland Coffee Works since 2015 (BBI, Jan 6 2016), Green Day is launching Punk Bunny pods in 4 initial expressions on Keurig platform: Father of All Dark Roasts (using Central America and Sumatra beans), Soundcheck (dark roast using Central American blend), Last Ride In (medium-dark blend using Central and South America beans) and Light Club (light blend using Central and South America beans). Like the band itself, graphics on pods and boxes are exceedingly loud. In nod to sustainability, new line will employ easy-peel lids that make the pods more recyclable (tho not many jurisdictions do recycle pods currently). Initiative dubbed "Fueled by Love" steers portion of profits from the bags and now the pods too to rotating array of charity partners, this quarter being One Tree Planted, Oceana, Keep Memory Alive, Eat. Learn. Play and Ron Finley Project. No word on any RTD plans for brand . . . The double-dribblin' Cavinder twins Haley and Hanna have signed on as investors/endorsers for canned Slate Milk, the protein-rich entry positioned as an athletic recovery drink. Tho just 23, "the Cavinders are among the most prolific NIL brand ambassadors, most followed athletes and influential fitness and nutrition advocates in college sports today," as Sports Illustrated reminded. They've both rejoined Miami Hurricanes for last season in 2024-25. Repped by ESM agency, they number among non-bev affiliations Boost Mobile, Champs Sports, Raising Cane's, Intuit TurboTax, Core Hydration, WWE, PSD Underwear, Six Star Pro Nutrition and Caktus AI.