Tri-County Bev in Mich recently closed deal to sell about half its biz, over 2.5 mil cases, to 4 distribs in Detroit metro. Tri-County (owned by Walter Wolpin) will stay in biz mainly in more affluent suburbs, selling off downtown and other areas. Tri-County’s large portfolio led by Labatt brands, but also including Coors, AB InBev imports, plus many other import, craft and subpremium brands. Largest piece, well over 1 mil cases, went to West Side Beer. That’s Mich’s largest AB distrib (owned by Klopcic family) which also just recently acquired 2-mil-case AB distrib in Lansing. Another approx 800,000 cases went to Great Lakes Bev Co. That’s Detroit AB distrib owned by Howard Wolpin (Walter’s son). And 600-700,000 cases of Coors volume went to 2 local MillerCoors distribs, Eastown and O&W Inc. So this deal cleaned up footprint issues for each of MC and AB, but also meant 2 AB distribs got quite a bit bigger with non-AB brands. Plus founder Walt Wolpin disposed of significant family asset yet still stays in game on his own terms. So it’s a multifaceted yet tidy transaction.

Tom Stillman, chmn of Summit Distrib (MillerCoors house), has deal to buy St. Louis Blues hockey team as Dave Checketts heads to new hospitality venture after putting club up for sale in Mar 2011. Purchase price is around $185 mil, $127 mil for value of team and another $58 mil to ensure future working capital, sources told St. Louis Post-Dispatch. Another deal to purchase Blues was scrapped by NHL last month because purchaser could not prove financing. A banker involved in deal told paper that should not be an issue this time: “Stillman is a good guy and has the money.”

AB previewed its annual lineup of Super Bowl ads to media yesterday. AB will run a total of 6 ads, 2 each for Bud, Bud Light and new Bud Light Platinum this yr, for a total of 4 ½ min of airtime (2 min for Bud; 2 ½ for Light & Platinum combined). Stella Artois on sideline this yr. AB leading with 2 spots to intro and show “sophistication of Platinum” brand, mktg veep Paul Chibe told Insights. First spot, using sleek and modern automated factory explains “what it is” and 2d spot shows “who it’s for,” noted Paul, which is an “upscale, diverse and professional” consumer. Those just happen to be the drinkers that beer lost to spirits over past few yrs. Indeed, Paul told Ad Age: “We’re going after the consumers who have switched to hard liquor.” In Platinum spots, voiceover makes point that beer is “Triple Filtered-Smooth Finish-Top Shelf taste” and quick close up of cobalt blue bottle shows beer label which notes it contains 6% alcohol. “We feel like we can come up with compelling propositions that can compete on image and that can compete on taste and have these people come back to beer and stay in beer,” he told mag. Just as spirits have taken occasions from beer in recent yrs, these ads borrow a phrase oft-linked to liquor (“top shelf”) and show off some of packaging pizzazz exploited by spirits.

AB relies on proven formula of mixing humor and animals in a Bud Light spot that puts new spin on brand’s familiar “Here we go,” slogan in clever way with a rescue dog named “Weego.” Ad also gives AB oppty to engage consumers via social media by encouraging them to visit Weego’s Facebook pg. For every “like,” AB will donate $1 to Tony LaRussa’s Animal Rescue Foundation for up to $250K, noted Paul. During game, AB’s ads transition from “sophistication” of Platinum to Bud Light spots that allow consumers to “see the humor of the brand” in a way that isn’t “dumbing down the consumer” or making consumer the joke, he added. AB’s keeping 2d ad for Bud Light, which has tie in with NFL, under wraps til game but it’s in conjunction with song identifying app Shazam, notes Ad Age and will have “starpower.”

For last yr’s Super Bowl, AB’s ads were described as having a “more international feel,” but two ads for Bud this yr are very much woven thru fabric of America as viewers get visual of how iconic brand has been thru key moments in US. First spot features Clydesdales delivering Bud to newly opened bar at end of Prohibition, cheered on by boisterous crowd. Next spot takes theme further by demonstrating how Bud has been a part of celebrations in America from end of Prohibition to present day including events like US Hockey teams improbable gold medal in 1980.

McGarry Bowen, which started work on Bud Light late last yr, and created rescue dog spot for game, was recently named #1 Agency of the Year by Advertising Age. “They had strength in planning, account service, creative development,” Paul told mag, because “to have a long-term relationship, you need to have all three.” Marketing execs noted agency “is a jack of all trades at a time clients want more integration and less specialization,” but added that “gossipy” ad community sez agency is scoring big accts “by undercutting the competition on price.”

Over 800 people attended North American Breweries packed wholesaler conference in Orlando yesterday, up by about 200 from last yr. Many wholesalers attend at least in part because they would like to be the consolidators of NAB portfolios in their mkts. Many mkts, including home base Rochester, still have 3 separate NAB distribs. But NAB has also become an intriguing growth story; gained 363,000 bbls in last 2 yrs alone. It’s targeting at least another 200,000 bbls of growth this yr. NAB shipments up 8.5% and depletions up 9% last yr. It reached 37 mil cases in 2011 and expects to grow another 8.5% in 2012, which could put it just shy of 40 mil cases. Not bad for a private equity player new to the beer biz. NAB’s growth engines in 2011 were really Genesee and Seagram’s coolers, both price brands (as well as its contract biz, not discussed at meeting). Genny up 1.6 mil cases, 31.5% and grew to over 500,000 bbls for the 1st time since 2003. Seagram Coolers around 4 mil cases, and up 1.1 mil cases, 36%. So those 2 brand groups only about 25% of volume, but about 90% of NAB growth in 2011. But NAB also very serious about its craft biz, where it’s #5 craft player. Magic Hat shipments cracked 200,000 bbls, up 17.5%. But its depletions up 20%. Pyramid down to 133,000 bbls, dropping another 10% in 2011. NAB didn’t yet give 2011 trends on its biggest brands, the Labatt brands which were 57% of its 2010 volume, but it did say Labatt Blue shipments up for first time in 2 yrs and Labatt Blue Light up for 2d yr in a row. But Labatt Blue down 7% for yr and Blue Light up 1% in scan (SIG food/drug/convenience data thru Dec 25). Blue Light Lime depletions up 41% in 2011. Later this yr, Labatt will intro Labatt 52, with 2.2% ABV, 52 calories and 1.9 carbs. Its other import, Imperial from Costa Rica, grew depletions by 63%, 57,000 cases. Prexy Rich Lozyniak detailed NAB’s capital expenditures in recent yrs, which were $4.8 in 09, $6.4 mil in 2010 and $14.4 mil in 2011. Over $25 mil in 3 yrs. This fit with his basic theme that private equity ownership is “competitive advantage,” because parent KPS has upped investment, not just in capex, but brands and employees too. NAB added 100 employees in 2011 alone. NAB improving its facilities and service too. NAB has upped number of inventory turns on Genny from 11.5 to 15.7 in just 3 yrs (compare to Boston Beer at 7.8 or Heineken at 11.7). And over 95% of Genny orders now on time, in full and with no errors. Rich is really big on “lean manufacturing” and 6 Sigma principles, and one result is: “fresh beer in the marketplace.” Wholesaler consolidation fits right into that improved manufacturing efficiency. NAB has done over 250 wholesaler consolidations in 3 yrs. First it went down from 704 to 564 distribs between early 2009 and August 2010. Then it bought IBU and added all those Magic Hat/Pyramid distribs. Since then, it has gone down from 748 to 627. But that’s still about 100 more than AB, even tho NAB is a 1 share player. “They’re slightly bigger than us,” quipped Rich. “We are certainly not done,” said sales veep James Pendergraft. James also placed a lot of emphasis on increased distribution. He did a whole exercise that illustrated essentially how Seagram cooler’s hottest brands are only carried by small % of distribs. At close, James said: “Increasing availability and distribution” is #1 priority. But he also noted that for NAB “a lot of different things are working.” Finally, NAB always subject of lotsa speculation, especially about whom they’ll buy,but lately even some about when they’ll sell. NAB offered up little new on either front, but still eminently worth quoting. “We didn’t make any acquisitions last year,” noted prexy Rich, “though we looked at a lot of opportunities. We made a lot of offers and came close” but “nothing happened.” He said it’s “amazing to have a boss that’s yelling at you to buy things.” (That would be KPS partner Raquel Palmer, who attended meeting.) “We’re doing very well,” noted Rich, “making a lot more money” and not doing it by cutting mktg, training, brewery expenses, etc. KPS is continuing to invest “and very, very happy” with its investment assured Rich (and Raquel affirmed). “That being said, there will be an exit someday for KPS.” That’s a “question people are starting to ask. Now people are getting a little nervous.” But Rich added: “If we focus on good things, we’re going to have a great outcome.” Whether it’s strategic buyer or even an IPO, a buyer will “want our brands, our relationships with you.” KPS is “not in a rush to get rid of us. If somebody calls and offers us $1 billion,” then Raquel probably wouldn’t “be here next year” except in advisory role. Still: “We’re one of the most stable companies in the industry,” concluded Rich, so that even if there were a deal someday, “it will be a good outcome for our people too.”

Combo of “difficult volume environment” at MC and cost squeeze from looming big IT investments led UBS to downgrade Molson Coors stock to neutral from buy, analyst Kaumil Gajrawala wrote this morning. “Slowing” Coors Light, “ongoing Miller Lite declines,” plus overall MC volume decline, with “no clear plan in place to address them” made UBS take “more cautious stance” on TAP. Premium domestics losing share to craft, wine/spirits and imports, noted Kaumil, and “even if” employment improves, MC has “limited exposure” to growing segments. On top of that, in terms of MC synergies, “low hanging fruit” achieved and “company has failed to deliver much of these cost savings to the bottom line.” In 4 qtrs prior to JV, Molson Coors reported $689 in pre-tax income, sez Kaumil. But his current estimate for 2011 is $756 mil, “despite achieving the targeted goal of $750 mil in cumulative cost savings ovr that time in the 42% owned JV.”

“Further upside in operating leverage will likely be limited by $300-350 million per year in IT spending,” wrote Kaumil. That will cut into future cost savings and pressure margins. Seems like MC still running 3 separate IT systems: one from each JV partner and the “new” one. When completed, project should “bridge the technology gap” between MC and ABI, but Kaumil would rather see same $$ go to mktg and innovation. In any case, he’s knocking back his estimate of Molson Coors equity income from MC JV over next 2 yrs by $66 mil in toto and reduced MC volume estimate for 2012 from flat to -1%, tho he still expects pricing +2.3%.

“In leaving, according to regulatory filings, Peacock appears to be walking away from stock options that would today be worth roughly $28 million,” reports St Lou Post Dispatch. But former prexy Dave tells paper: “I really didn’t mind leaving that money on the table. It was just the right time for me.” The juxtaposition of those 2 quotes sure suggest that’s not the whole story. One could safely guess that even if he didn’t receive his stock options, Dave will be handsomely compensated on his way out door. And indeed that is the word. Dave had reportedly told some folks he was leaving in recent weeks, tho timing turned out to be quicker than at least some had expected.

The move while “significant is not a complete break from the past,” wrote Redburn’s Chris Pitcher. While Dave “heavily involved in the integration of the two businesses,” that is now “largely completed.” His direct reports will report to Luiz Edmond (Paul Chibe, David Almeida) or David Almeida (Don Johnson). “The change in reporting structure effectively subsumes the management of the US business into a broader North American Zone Management Committee.” Even tho its members mostly in St Lou, this change “perhaps psychologically moves the decision making process a bit farther from the old AB structure.” But Chris adds: “If the position wasn’t replaced, then it probably wasn’t part of the longer term plan for ABInBev.” And so his headline is: “We expect limited operational impact.”

Still, Chris does cite one cautionary note: “What will be critical is managing the transition with distributors and it is too early to tell how pivotal Peacock was in maintaining those relationships.” He cites “uncertainty” as the “main concern.” As Dave leaves, AB’s relationships with distribs are definitely in need of repair. To illustrate depth of some distribs’ alienation from ABI, here’s one distrib’s reaction to Dave’s departure: “Will the last American leaving St Louis, please grab the flag.” And another: “Sad day for AB… and for its wholesaler network. Circle the wagons.” He apparently expects more tuff love from AB. Interesting times: This week, as Dave leaves, AB’s SOT team enters Cleveland/Akron, Bud Light Platinum is coming out in some markets, and AB’s distributor panel is reportedly meeting in St Lou. Like to be a fly on the wall for that one, for sure.

Asheville area newspaper and radio station reported last night that Sierra Nevada “expected to announce this week they have chosen Western North Carolina” for much anticipated eastern brewery. Times News and WHKP say Sierra has picked 50-acre site in industrial park near Asheville airport, that plant will include brewery, restaurant, tasting room and music venue. Sierra’s planned investment: approx $115 mil. But local town, county and state “have reportedly been working together for many months with Sierra Nevada…and all have approved incentives to lure the brewing company to the site,” according to WHKP. That included $3.75 mil package approved by county officials last mo for “unnamed manufacturer” widely believed to be Sierra.

Presuming this time it’s for real, this would mark significant milestone for craft, the first Eastern brewery built by a Western craft brewer, probably since Redhook built Portsmouth, New Hampshire back in 90s. It’s a big bet on the future and Sierra has gotta plan to fill the plant faster than CBA has filled Portsmouth.

Consumer price index for beer at home up just 1.4% in 2011 (that’s annual avg), reports Bureau of Labor Stats. That’s while CPI for all items up 3.1%. Increase last yr was smallest since 1% pops in 2005-2006. For 4 yrs after that beer CPI basically matched or ahead of inflation. Longer term, beer prices still behind inflation. On-premise beer prices up more than off premise, +2.5% sez BLS, and brewer prices jumped 3.9%, ahead of rev/bbl increases reported by ABI and MC. Meanwhile, CPI for spirits at home edged up just 0.1%, following 0.2% dip in 2010. Wine CPI down for 2d straight yr, off 0.7% after 1.4% decline in 2010. But on-premise price rose for both; spirits and wine up +2.9% and 1.9% respectively. Since 08, beer CPI up 7.1%, spirits CPI up 2.2% and wine CPI flat.

AB prexy Dave Peacock, one of the last big links between pre- and post-AB InBev, has resigned, “leaving his position effective today and serving in an advisory role,” ABI’s North American prexy Luiz Edmond announced to employees. Luiz will take over “leadership of the US business unit in addition to my zone responsibilities.” Dave was last remaining member of 6 on commercial leadership team that was named just after ABI took over in late 2008. And only one member of old AB strategy committee remains, zone general counsel Gary Rutledge. So in a little over 3 yrs, there’s been a ton of turnover throughout the organization, but also at very sr levels. Yet on other hand, most of sr mgt that ABI put in place on mgt committee of North American Zone has stayed. Today ABI names mktg veep Paul Chibe and sales veep David Almeida to that committee, in addition to Luiz’s new role. “The old AB culture has been expunged,” ex-chief creative officer Bob Lachky told Ad Age. “The management team has been totally transitioned and that was to be expected.”

The decision is “very personal,” Dave told INSIGHTS. “I thought about it for a long time. I’m lucky enough to have the opportunity” to do other things, tho he has nothing specific lined up right now, he said, other than to “spend more time with my family.” His advisory role is kind of open-ended with Dave referring to a “shorter-term” role, and yet also his hope to remain as chairman of Beer Institute through the end of his term in Jun. But Luiz also told INSIGHTS that Dave’s are “big shoes to replace” and that ABI will seek his advice over “the next few years.” Indeed, “we don’t like Dave leaving now,” continued Luiz, but there are “great people underneath him. It won’t be an easy transition but we’ll try to make it as smooth as possible…. It didn’t work out the way we’d like it to work. Dave made amazing contributions during the merger and after.” As expected of a good soldier such as Dave, Dave told INSIGHTS he’s “never been more confident” in AB’s plan “going forward.”

Dave had fairly remarkable run at AB in his 20 yrs there, encompassing many changes and challenges, especially during last 5 yrs. That included brief stint as mktg veep (successful launch of Bud Light Lime) and then prexy during short reign of August Busch IV, leading up to ABI takeover of AB. Dave deeply involved in first trying to fend off that takeover, then embracing it. He then played leadership role as AB president through period of transition. He has been face of new AB in US for distribs, media and public ever since. Meanwhile, most sensed that the real power resided more with Luiz and others in ABI’s sr mgt. That made for a complicated role for Dave. Attempting to juggle all that must have often been quite daunting, up to and including his recent “tough conversation” as he called it, with distributors at convention in Dallas. As result of all this, at least some of the good will and trust built between Dave and distribs over the yrs had eroded. On today’s conference call with distribs, not a single question asked of Dave. Luiz’s letter credited Dave with helping complete “one of the largest combinations in American business,” helping ABI “weather the recession” and “redesigning our marketing and sales structures,” plus getting the NFL sponsorship back for Bud Light, building the high-end portfolio and initiatives to help improve Bud’s trend.

Fellow-BI board member and Brooklyn Brewery prexy Steve Hindy said of Dave: “Dave was an advocate for small brewer participation on the Beer Institute Board of Directors…. He understood the importance of large and small brewers coming together on matters of importance to the entire industry. He was always available to small brewers and always willing to listen. I can only hope that the new leadership at ABInBev continues its commitment to industry unity.” This quote illustrates there were many sides to Dave. He has had to wear so many hats. Few people were at the center of more events in recent industry history.

MC’s posted its weakest STR trend of yr in final qtr of 2011: -3.3% adjusted for shipping days. Down about 2.4% for calendar yr. Meanwhile, shipments trend improved in Q4, down just 1.6%. But shipments off approx 1.85 mil bbls, 3% for the yr, as we estimated in beer marketer’s INSIGHTS earlier in mo. Coors Light Q4 STRs down low single-digits. That’s 1st dropoff for the brand since Q3 2010. Miller Lite STRs down mid-singles for 3d-straight qtr. MC’s below-premium biz also down mid-singles for 3d-straight qtr. But 10th and Blake clicked along at double-digit growth. SABMiller reported volume also down 2% in Europe, but stronger elsewhere. Up 11% in Africa, 8% in Latin America 7% in Asia Pacific and 2% in South Africa. All in, SABMiller global volume +3%, revenues up 7% and rev/bbl up 3%, mostly from “price benefits, with mix gains achieved in all regions except Europe.” Tho MC strugglin’ in US, reading SABMiller trading update reminds that it ain’t standin’ still. Over last 6 mos, SABMiller: closed $10.5 bil purchase of Foster’s in Australia (which continued to lose volume/share there in Q4); made several deals to strengthen its biz in Africa; announced alliance with Efes to bulk up both co’s biz in Russia and elsewhere in eastern Europe, Middle East and Central Asia; closed $7 bil bond issue, touted in South African papers as “the largest US dollar corporate bond issue in almost 2 years,” to finance Foster’s acquisition.