Far from a secret that this year’s major release from AB’s Texas-based acquired craft brand Karbach, Crawford Bock, aimed directly at the state’s longtime craft leader, Shiner Bock. But some recent Karbach marketing hit a little too close to home. Literally. Over last month, AB put up 3 billboards for Crawford Bock around tiny Shiner, TX, hometown of Gambrinus’ Spoetzl Brewery, maker of Shiner, according to open letter penned by Spoetzl for tomorrow’s edition of weekly Shiner Gazette. Billboards and related concert series sponsorship claim “There’s a new Bock in Shiner,” according to letter. Shiner is a town of about 2,000 people between San Antonio and Houston. 

Shiner Bock maker Spoetzl Brewery has operated in the town since 1909, letter reminds, while pointedly pointing out that Karbach “is owned and operated” by AB InBev, “a public multinational company with its global headquarters in Belgium.” Also claims “A-B does not want you to know that Karbach is produced at the formerly craft Karbach brewery and at its large, low-cost A-B plant in Houston. This is a huge company with deep pockets seeking to force its way into our town.” Letter brings attention to Brewers Assn’s “Independent Craft” seal, used on Shiner packaging, as well. Crawford Bock got out of the gate quickly this yr, helped by partnership with Houston Astros. It quickly rose to #3 Karbach brand in IRI multi-outlet + convenience data, with incremental $5.7 mil in sales yr-to-date thru Oct 6. That’s still tiny sliver of $65.6 mil in sales nation-wide for Shiner Bock over same period. That brand down about 3% so far this yr, tho holding closer to flat during recent periods.

Not surprisingly, different takes from Milwaukee and Denver press in recent stories on Molson Coors moving jobs outta Denver, adding in Milwaukee, the name change, etc.  Lotsa ink spilled on this story in those cities and elsewhere.  CEO Gavin Hattersley told Milwaukee Biz Journal that as he looked over North American biz structure, “it was impossible to have two separate names.  Molson Coors is the name that we’ve used globally, and it’s worked well.”  So, so long MillerCoors.  At same time, local matters.  In Milwaukee, “it will always be the Miller Brewing Company.  The signage will always be the same.”  Similarly, “the Coors Brewery in Golden has been called the Coors Brewing Company” since Molson Coors formed in 2005.  Molson Coors has taken similar tack in Eastern Europe where “corporate entity is Molson Coors, but the local companies continue, in consumers’ minds, in the local communities’ minds, always retain their heritage.”  And the brands will maintain heritage links: “Miller Lite, Miller Genuine Draft, Miller High Life are always going to be the way we come to market with our consumers.  Nothing is changing from that perspective,” said Gavin. 

At same, while Molson Coors eliminates or moves 300 or so jobs out of Denver corporate offices, it will be showing some love to modernize Golden brewery, to tune of hundreds of millions of dollars.  And more money and jobs going into Milwaukee for support functions.  Molson Coors just completed “significant expansion in our Tenth Street brewery” there and some of its newer products will be produced in that plant, i.e. Blue Moon Light Sky.  Gavin repeated to Mil Biz Jnl that revitalization will provide Molson Coors with “firepower” to support both core brands and above premium innovations.  Looking ahead, “the most important thing that has to happen is we have to transform the portfolio” to above premium, and “in three to five years I’d be disappointed if our above premium portfolio isn’t a much more meaningful proportion of our overall volume.”

Biggest Risk? Missing the Next Seltzer  Asked to identify “largest risk” Molson Coors faces over next coupla years, Gavin stressed that “the big deal for us is making sure we are staying ahead of the consumer.” Specifically, “seltzer is obviously a phenomenon, and we need to make sure we identify what the next seltzer is for our consumer.  The risk for us would be if we missed that.  That’s not our plan.”   

“We Have Marketing Talent Too,” Sez Denver Post, and Many Millennials; Coors “Is Colorado”  “I would say the morale is not terribly good” in Denver, Gavin acknowledged to Mil Biz Jnl.  Meanwhile, Denver Post dug into question “Why pick Chicago?”  Story led by quoting local history prof: “Coors has been the state’s best-known, best selling brand.  It has been more than a beer – it is Colorado.”  Story closed on similarly glum note that “notably absent from the company’s statements” about the upcoming moves, “were comments from Peter Coors, the scion of the Coors family, the closest thing the state ever had to a business dynasty,” and that’s “had a hand in Coors in one form or another” for five generations.  Pete declined interview requests, Post pointed out to end its story. 

Along the way, Post reported Molson Coors’ stated reason for picking Chicago over Denver.  “Marketing was the true reason,” spokesman Matthew Hargarten told the paper, citing raft of marketing talent in Chicago via larger presence of Fortune 500 companies and graduates from area biz schools. (Recall, AB moved its sales/ mktg operations from St Lou to New York in 2015, using similar logic: to be closer to AB’s ad agencies, natl sports leagues and “afford us greater exposure to developing trends in a diverse, urban center,” it said at time.)  But Univ of Colo at Boulder “has significantly beefed up its marketing program,” Post notes.  What’s more, Denver region has “expertise in business-to-business marketing in technology and in the marketing for the natural foods industry,” plus plenty of creative talent and an innovation-fostering culture, a local expert told the Post.  Besides, Denver “is an incredible town for millennials” a local biz prof pointed out, “whereas Chicago is not.”  In fact, many millennials moving outta Chicago and into Denver, he claims.  If Molson Coors seeks to be relevant to millennials, Post asks, “why craft that strategy in a city they are fleeing versus going with one they consider vibrant?”  Molson Coors’ new communications chief Adam Collins pointed to success of its Chi-based mktg team with Coors Light “Made to Chill” campaign, Miller Lite’s recent sales and Blue Moon’s strong Q3. “You are seeing some positive green shoots of progress with each of these brands.  The company is cognizant of not wanting to disrupt the positive progress of these brands,” Adam said.

Just as Sep shipments (domestic + import) picked up a little momentum following slow summer, NBWA’s Beer Purchasers’ Index, which takes temperature of distribs’ buying intentions, shot up to 70 in Oct.  That’s highest Oct score in 5 yrs, according to NBWA economist Lester Jones.  It’s way above last yr’s Oct index (48) and well above avg of 59 recorded in Q3 this yr.  Distribs remain excited by seltzers, natch.  FMB index flyin’ high at 85 in Oct, a new record, and “reminiscent of craft index readings of 80+ that lasted from October of 2014 through May of 2016,” Lester sez.  Craft index in Oct was 55, imports at 64.  Craft up vs last Oct, imports down, but both in expansion mode.  Premium lights and cider in 43-44 range; subpremiums down to 34 as “all three domestic segments continue to struggle” in contraction mode.  Meanwhile, Oct shipments were a fairly easy comp: total shipments -1.9% last yr; Nov even easier at -5%. 

Following tuff 8% decline in Aug, import shipments bounced back with modest gain in Sep.  Up 58K bbls, 2.1%, reports Beer Inst based on Commerce Dept data.  Shipments from Mexico, Canada and Belgian-German combo each up 5-6% for the month.  But Dutch shipments tumbled 13% and Irish shipments down 5%.  For 9 mos, imports +512K bbls, 1.8%. That’s about half of 2018 import trend and slowest since 0.7% decline back in 2013.  Mexican shipments +664K bbls, +3.4% yr-to-date.  Belgian-German combo +73K bbls, a similar 3.3%.  But Dutch shipments down 144K bbls, -4.1%, despite what looks like 100K incremental bbls for Heineken 0.0.  Canadian shipments down 61K bbls, -5.6%.  Irish shipments flattish.  Shipments from Jamaica, Poland, Dominican Republic and UK all down sharply.  But Italian shipments (Peroni) buckin’ the trend: +87K bbls, +60%.  Imports had soft Q4 last yr, -108K bbls, -1.3%.

Mike’s $$ sales up 109% for 4 weeks thru Oct 26 in Nielsen all outlet and it gained 2.3 share in latest period to 4.6 share.  Virtually all that gain comes from White Claw franchise, which gained 2.2 share to 2.8.  Total Mike’s $$ sales up 71% yr-to-date. And it gained 1.5 share of $$ YTD thru Oct 26.  That’s 1.5x as much share growth as Constellation Brands Beer Division, which continues to gain a hefty 1 share of $$ and up at double digit pace in scan.  And Boston $$ sales still up 20% and it gained 0.5 share YTD, including 0.6 on Truly franchise. 

Collectively, Mike’s, Constellation and Boston gained 3 share of $$ yr-to-date (4 share for 4 weeks. Who did they get that from?  AB and MC remain the biggest share donors.  AB down 1.6 share of $$ YTD (2.0 for 4 weeks) and MC down 1.1 share of $$ YTD (1.2 for 4 weeks).  HUSA down 0.2 share and Pabst down 0.1 YTD thru Oct 26. 

White Claw Dominates Short-Term Growth Stats  Here are more stats that demonstrate how much White Claw presently dominates beer industry growth.  White Claw Variety Pack is easily #1 growth brand last 4 weeks.  Up $34. 8 mil, 350%.  That’s far faster growth than 282% pace YTD.  And that’s far more growth than #2 growth brand, Modelo Especial, up $26.6 mil, 19% and/or #3 growth brand Michelob Ultra, up $21.6 mil, 15% last 4 weeks. And if you add White Claw Black Cherry, #4 growth brand also up $12 mil, then those 2 variants of White Claw gained as much as Michelob Ultra and Modelo Especial combined.  Those 2 brands led industry growth for the last several yrs.  That’s pretty impressive.  

Recall, back when aluminum/steel tariffs kicked in, small American Keg Co in Pottstown, PA got some press when prices for US steel it purchased rose sharply and it faced competition from less expensive beer kegs from China and elsewhere.  Turns out American Keg filed anti-dumping charges against keg producers in China, Germany and Mexico.  Commerce Dept did investigation and found “the Chinese government subsidized domestic keg manufacturers and dumped them into the US market while German firms only dumped kegs at low prices,” reports Philly Inquirer. “The agency first ruled on Mexican kegs over the summer, saying they were dumped too.”  Offset duties of 16-145% are among penalties suggested by Commerce; latter would “more than double the price of Chinese kegs,” paper adds.  US Intl Trade Comm will issue decision in Dec. 

Inquirer plays story as David vs Goliath, as AB InBev opposes any penalties, warning of potential price hike for beer consumers in US.  Meanwhile, paper quotes a local craft brewer cheering on American Keg.  ABI spokesperson said: “Less than a handful of keg producers around the world can meet the company’s capacity, quality, and timeliness requirements, and currently there is no producer in the US that meets the criteria.”  American Keg can’t satisfy demand, ABI said too, pointing out that most craft brewers lease kegs instead of buying them these days, a biz American Keg doesn’t “meaningfully compete” in.   

AB’s forward-looking mktg initiatives are extensively profiled in Adweek, including its use of neuroscience “helmets” (a mesh cap) in focus groups for Super Bowl ads. They “track a participant’s emotion about an ad or product,” wrote Adweek.  “Neuroscience—which is a little crazy,” acknowledged cmo Marcel Marcondes, “but we do use it because one of the key problems in research is that people rationalize when they give you answers. So when they use those crazy helmets and we track their emotions, we get a lot of things…. We get their emotional reaction to things.”  Article also profiled several other newer aspects of AB mktg (some of which we’ve reported before), like Apollo 11, internal team that “employs a ‘test and learn’ model” and “can prototype a new product, embark on a three month pilot period to test new products in a few regions” then either scale it or drop it.  That led to Naturdays and Natural Light Seltzer.  Then there’s in-house agency called Draftline.  Also, an “in house academy” called “Marketing Culture and Capabilities” team, “which brings in speakers to teach Anheuser Busch’s marketers how to deal with uncertainty and keep up with trends in earned media, licensing, storytelling and more.”  Then there’s Cheers, “an internal online community… made up of more than 6,000 people across the US.” With Cheers, AB “has been able to do everything from conducting live digital focus groups on Skype to putting out surveys and receiving responses overnight.”  AB also has “virtual newsroom that tracks each of the brands on a 24/7 basis and finds different ways to insert them into a conversation.”  Of course, “big flashy TV spots are still essential for making a brand culturally relevant.”

What AB wants most is to “be relevant to people,” Marcel said, not just “visibility.” Adweek cites several examples like “Victory Fridges” for Cleveland Browns, tribute ad as basketball star Dwayne Wade retired, committing $10 mil over 10 yrs thru Natty Light to help students pay off college loans. “The more relevant you are to people, the less money you need to spend.”  AB has set aside 5 to 10% of its “addressable budget” ($559 mil in 2018, according to Kantar figures cited by Adweek) for agencies to “to come up with ideas that feel off the cuff and ‘contextual’ to trends,” explained Marcel. “This gives the agencies room to experiment,” he added.  

Hear more about AB marketing from Marcel at the Beer Insights Seminar in just 2 weeks.  Click here for the agenda.  Click here to register. 

Stella Artois’ new ad campaign for the holidays, “Moments Worth Making,” again looks to be “more relatable” while keeping content “premium, warm, and relevant,” co shared. New 30-second TV spot begins airing today, showing “father and son reconnecting” during holiday gatherings over the yrs with Stella. Ad will air “nationally across an assortment of cable entertainment channels showing holiday movies, primetime television, online streaming platforms and networks airing football programming with a digital integration via Twitter,” per release. Recall, Stella shifted strategy on marketing for “more relevant and relatable” content earlier this yr, starting with Super Bowl ad starring Sarah Jessica Parker and Jeff Bridges, and summer campaign featuring Idris Elba. Holiday ads move away from using celeb star power while sticking to more relatable themes.

Gotta note, this is 2d straight year of flattish trends for Stella in scans; volume off 0.1% and $$ up 0.7% YTD thru Oct 12 in Nielsen All Outlet data. Stella Cidre franchise continues to struggle as well, down 7-8% YTD even with boost from newer Stella Spritzer. So, unclear what effect these broader Stella ads have had on the brand so far. Stella brand history is rooted in holiday tradition, and still does big chunk of sales in US during holiday period. Plus, co added new limited-edition black lager, Stella Midnight Lager, officially launching today as well.

Molson Coors’ 2 lead brands are both improving trends in Nielsen all outlet data, as shown on Molson Coors conference call last week.  Charts for both showed steady improvement from 2018 to 52-week to 13-week to 4-week thru Oct 19 trends.  Coors Light volume down 6.3% in 2018, -4.4% for 52 weeks thru Oct 19, down 2.4% for 13 weeks and down just 1.2% for 4 weeks.  Miller Lite trends are better yet and on same steadily improving trajectory.  Miller Lite volume down 1.9% in 2018 in Nielsen all outlet. Down 0.7% for 52 weeks thru Oct 19. Yet Miller Lite up 0.4% for 13 weeks, up 1.6% for 4 weeks.  Molson Coors also touted Coors Light’s 2 bil PR impressions in Q3 alone as it got “refreshed brand purpose” with “stronger emotional relevancy,” which is “driving talkability in culture” and “attracting new legal age drinkers.”  These numbers do show better trends on top 2 brands that are over half MC biz. Yet MC’s total sales-to-retailers still down 3.9% in Q3. 

After increasing slightly for a few years, alcohol-impaired traffic fatalities – when a vehicle operator tests 0.08 BAC or higher – declined by nearly 400, 3.6% in 2018 to 10,511, the Natl Highway Traffic Safety Admin (NHTSA) reports.  That was a slightly sharper dropoff than the overall decline in traffic deaths (-2.4%) for the year.  But alcohol-impaired fatalities remain about 29% of all crash deaths.  Note too, alcohol-impaired traffic deaths are down by 50% from over 21,000 since NHTSA started tracking the data in 1982.

Meanwhile, a very lengthy (over 5K words) front-page article in the NY Times today sharply questioned the accuracy of the most commonly used breathalyzer tests to detect high BACs and punish thousands of drivers every year in the US.  Turns out that a combination of “serious programming mistakes,” poor maintenance and human error suggests that “the devices, found in virtually every police station in America, generate skewed results with alarming frequency, even though they are marketed as precise to the third decimal place.”  How serious is the problem?  In just 2 states, Massachusetts and New Jersey, “at least 42,000 convictions are at risk,” of drivers already found guilty of DWI, due primarily to potentially invalid tests.  On the other hand, some impaired drivers have escaped punishment and more may do so as the reliability of these tests is increasingly questioned across the US. As the Times notes: “Throwing out tens of thousands of faulty breath tests will inevitably let some dangerous drivers back on the road.”   

If this problem is as serious as the NY Times suggests, it may also call into question the development and implementation of ignition interlocks – designed to stop impaired drivers from starting/operating their vehicles – down the road.  MADD and many others in traffic safety believe (hope?) interlocks are a key to ultimately eliminating drunk driving.  There are already bills in Congress to mandate all new vehicles have such devices by 2024 or so.  That’s even while American Beverage Licensees, and a few others, warn about the likely inaccuracy and other potential flaws in mandated ignition interlocks.  The NY Times exposé supports such healthy skepticism.  More detail in the November issue of Alcohol Issues INSIGHTS.