Beer Marketer's Insights
Meanwhile, MillerCoors will be getting new Lite creative from Saatchi & Saatchi in addition to lead agency FCB, reported Ad Age. Saatchi already has High Life, Keystone and Miller 64. The 2 agencies “are working separately on different ads that will be part of the same Miller Lite campaign expected to debut in the spring,” wrote Ad Age. They will be replacing Lite’s current “Man Up” campaign, which has clearly not turned brand.
The Oh Sales Opportunity Team just part of first wave of SOT teams that already included San Jose, Calif 2 weeks ago and Charlotte, NC last week. There will be more to follow. Perhaps Calif and Oh got SOTs because those were 2 states where AB lost significant share in 2011, or at least so suggested one source. Whatever their genesis, SOT’s purpose still subject of much behind-the-scenes discussion and speculation among distribs. AB has clearly gone to considerable expense to conduct these SOTs.
Not just sales that went spirits’ way in 2011. Industry was “largely successful” in beating back tax threats. There were approx 20 serious tax threats in states last yr, Peter said, and just 2 increases; and Mass and Mich each repealed some taxes. Then too, “playing field” vs beer and wine is getting more even as many Ga communities cleared Sunday sales and Conn may be next. More states now allow spirits tastings as well. DISCUS officially neutral on whether control states should privatize, but initiative in Wash means “privatization encourages states to modernize” spirits sales and that’s all good, from distillers’ pt of view. One trend that bodes well for for all alc bevs: measure of total sales in full-service restaurants and bars shows rolling 12-mo revs now at about same $240 bil as before recession. That figure had dipped to low of about $225 bil for 12 mos in mid-2010. Peter wouldn’t predict 2012 trend, but said “barring unforeseen [economic] downturn, we should have very solid year in 2012.” Anybody sayin’ that about overall beer biz this yr?
Way back before Granholm case, INSIGHTS noted “strange bedfellows” aspects of having public health advocates (used to be called “neo-prohibitionists”) providing legal briefs and other “support” for distrib side and state regulators in three-tier battles. Then Wash state/distribs gave prominent role to pro-excise tax advocate during Costco trial. And NBWA “partnered” with public health groups like Marin Inst to voice support for state regulation (Marin advocate testified before Congress to support CARE). Marin and other advocates began taking increasingly prominent role as presenters at mtgs of regulators, control states and NBWA-supported CAP mtgs. Behind scenes, some suppliers seethed at these developments -- since same advocates had spent years attacking their products, questioning science behind benefits of moderation, seeking severe restrictions on sales, ads, mktg, etc, and dismissing state regulators – but suppliers rarely went public. They’re still not going public, but gotta be saying “I told you so,” privately.
Alcohol Justice, recently re-named Marin Inst, put out press release last week touting a “peer reviewed article” that’s running in journal Addiction. It criticizes June 2010 National Conference of State Liquor Admins, state regulators from non-control states, for “industry’s excessive involvement.” (Same journal has run similar attacks from intl players who criticize any industry involvement in alcohol policy.) Tho author Sarah Mart herself spoke at that 2010 mtg, laying out the public health model and Marin goals of higher taxes, reduced availability, etc, she “concluded” that NCSLA’s “agenda lacks public health considerations.” In response, Bill Kelley, NCSLA’s president, and counsel for Mass ABC, went ballistic. He ripped AJ’s “agenda of self-promotion” as “obvious and unavailing,” charged it with seeking to “create relevance for its new brand by pandering for headlines” and pointed out that Marin/AJ has not joined NCSLA as members despite not only repeated requests but “years of courtesies.” Those courtesies have included not only seats on the dais from which Marin/AJ specifically attacked industry members in the audience but NCSLA paid expenses to be there (that’s while NCSLA, like its state agency members, has faced severe budget issues in recent years). Bill also ripped AJ for “taking no real affirmative action to support and defend” regulators, while he defended NCSLA as “the only organization of the 50 states with the sole, clear, transparent and inclusive purpose of effectively controlling” alc bevs.
That ain’t all. Vet alc bev atty and NCLSA member Evan Lawson penned stinging letter to Addiction journal, mocking notion that Mart’s article could be at all scientific since it was based solely on her observations and had “sample size of one” and thus a “98% margin of error.” Further, Mart’s article doesn’t note any “decisions or actions of the NCSLA that betray such [industry] domination,” or any that are “not reflective of an appropriate concern for” public health, Evan added. He also turned the tables to suggest that since Mart’s trip was paid for by NCSLA, she then too must be “dominated” by the biz. Addiction should “withdraw” the article, Evan wrote.
Not clear how all this will play out in future regulator- and industry-sponsored mtgs, not to mention efforts to bolster state regulation. But the uneasy relationship between public health advocates, regulators and industry just got a bit uneasier.
On heels of big Sierra Nevada announcement to build brewery in Asheville and all the attendant press, here comes Allentown Morning Call with headline: “Boston Pouring Millions into Lehigh Valley.” Recall, Boston bought old Schaefer Brewery in Pa in 2008 for $55 mil from Diageo. It has spent “tens of millions of dollars upgrading” brewery already, wrote Call. Boston projects “roughly $50 million” in capex in 2012, spokeswoman Michelle Diamandis told the Call. “We do not disclose the details, but much of the amount will be spent at” Pennsy brewery. Boston employs 260 there, up from 220 when it purchased. “We continue to invest in the plant when we see opportunities to upgrade a process,” said chairman Jim Koch, “and we are continually adding new beers and they have special equipment we need.”
Six biggest states were 40% of beer volume in 2011 with very mixed bag of trends, according to data from Beer Instititute. Total beer biz in premilinary data for 50 states down 3.1 mil bbls, 1.5%. But interestingly, 2 of top 3 states showed gains in 2011. Tex volume up estimated 194,000 bbls, 1% and Fla volume up 92,000 bbls, 0.7% (reversing several yrs of declines). But Calif volume dropped 485,000 bbls, 2.2% and Illinois down 360,000 bbls, 4%. So those 2 states accounted for 29% of nationwide drop, but only 15% of volume. Two other top 6 states, NY and Pennsy, down 1% each. Several other larger states had tuff yrs in 2011, including #7 Ohio down 300,000 bbls, 3.5%, despite Q4 Yuengling intro. Arizona dropped another 187,000 bbls, 4% in 2011. Down over ½ mil bbls last 4 yrs. New Jersey down 211,000 bbls, 4.4%. Those 3 states dropped 700,000 bbls between ‘em. And so 5 states were ½ of nationwide drop. There were regional differences too as South generally healthier. Two other top 10 states, Georgia and North Carolina, held relatively even. Yet Michigan (#8) dropped 102,000 bbls, 1.6%.