AB’s Natty Seltzers may not be disrupting growth of leading hard seltzer players at this point, but they’re off to a solid start in natl scans. Both flavors, Catalina Lime Mixer and Aloha Beaches, surpassed $2 mil in sales for latest 4 wks thru Sep 8 in IRI multi-outlet + convenience data. Collectively they reached $4.1 mil and nearly 158K cases. That’s over $26/case in early days, right in line with initial plan to sell at an 80 index to leading hard seltzer brands (see Aug 12 issue). Natty Seltzer brands instantly became AB’s #2 and #3 innovations in scans for 4 wks thru Sep 8. Only behind Naturdays ($6.5 mil) and outselling Rita Spritz variety pk ($1.2 mil) and Bud Light Lemon Tea ($1.1 mil) among other new brands for period.

But all told, Natty Seltzer still ways away from challenging top hard seltzer individual brands, let alone massive variety pk sales. White Claw Black Cherry, Mango and Ruby Grapefruit are each top-100 beer brands individually. They sold $21.8 mil, $11.9 mil and $5.9 mil respectively for latest 4 wks while growing triple-digits or better. White Claw Black Cherry is #21 beer brand in natl IRI for 4 wks, just behind Blue Moon Belgian White ($21.85 mil) at the #20 spot. White Claw Variety Pack #11 brand for 4 wks at $58 mil, up 284%.

 Recall, US Appeals Ct judges took AB and MC attys to task at recent hearing over corngate, “berating both sides” at one point, as Courthouse News reported (see Sep 23 Express).  Meanwhile, in US District Ct, where there’s already 157 docs filed since Mar, many with multiple exhibits attached, judge seems a bit fed up as well.  In brief text order this week, he denied MC request for certain docs from AB.  Having read “both sides’ arguments, their cited cases and their supporting documents,” he “determined that [the court] does not need further input from the parties at a telephonic hearing.”  What’s more, “in this lawsuit, the court is not surprised that plaintiff [MC] wants to open every existing folder at defendant’s [AB] ad agencies, but these RFPs [requests for production] do not pass muster under” legal rules.  MC’s got what it needs regarding challenged ads, judge figures, and additional request for “information about unaired, draft advertisements − is irrelevant to this lawsuit.”  MC’s “contentions to the contrary are speculative and unpersuasive.”

Is beer biz doing better or worse?  Here are more confusing datapoints following awful August domestic shipments and import numbers (-7%).  $$ sales surged 6.9% for 4 weeks thru Sep 28 in Nielsen all outlet, with volume up a relatively robust 3.3%. That is easily one of strongest 4-week periods of yr, right on heels of awful Aug shipments.  Go figure.  For 9 mos, $$ sales up 3.4% and volume up 0.5% in Nielsen.  Mike’s $$ sales up 108% for last 4 weeks.  What would they have been if it didn’t have all those out-of-stocks?   Mike’s gained 2.3 share for 4 weeks, 1.4 share yr-to-date. All of that is White Claw franchise, which hit 3.1 share, up 2.3.  Constellation $$ share up 0.9 for 4 weeks, 1 share YTD.  $$ sales up 14% for 4 weeks, 11% yr-to-date.  And Boston $$ sales up 24% for 4 weeks, 20% YTD (now including Dogfish Head in this data cut).  Up 0.5 share for each period.  Those 3 gained almost 4 share last 4 weeks, while AB lost 2, MC lost 1.1 and HUSA lost 0.4.  Yet each of AB and MC $$ sales up 1-2% for 4 weeks, while volume down less than 1%.  Like we’ve said, hard to read, except for sure, seltzers stayed hot and so did Constellation. 

“Forget ‘Succession’, ‘the Crown’ and ‘the Sopranos’, the latest family dynasty drama will be about the Anheuser Busch family,” began NY Post article last week. Series called “Under the Influence” and based on 1991 book, “the show will chronicle five generations of” Busch family.  Series comes from 101 Studios, “producers who made Paramount’s Western hit ‘Yellowstone’ starring Kevin Costner,” wrote Post.  Turns out 101 Studios launched this yr with $300 mil in funding, noted Deadline in Jan, and is run by ceo David Glassner and coo David Hutkin, who used to run the Weinstein Company.    

 Following tuff Aug domestic and import shipments – and a soft summer all in – but strong Sep scans, you mighta thought Sep Beer Purchasers’ Index, measuring distribs’ purchase intentions, poised for a rally.  And Sep index, reported by NBWA economist Lester Jones yesterday, was in expansion mode at 54.1.  That’s significantly ahead of Sep ’18 (46).  But it was also a little lower than Aug BPI (57.6).  So, like lotsa numbers in 2019, tuff to read.  Distribs still effusive over FMB prospects: seltzer-driven FMB index scored just below 80 in Sep.  But import index slipped to just above 50, demarcation between expansion and contraction.  That was almost 17-pt drop vs Sep ’18 and 7-pt drop vs Aug ’19.  Craft index slipped to 45.2, more than 10 pts lower than last Sep.  Premium light index up, but still sittin’ at just 35.6.  Premium regular, below premium and cider indexes all in contraction mode too. So, outside of FMBs, distribs not showin’ a ton of confidence going into Q4.  Relatively easy comp for Q4 tho: US shipments down about 2% last yr.

Modelo Especial brand $$ sales up 9% and gained 0.8 share to 15.4 last 13 weeks thru 9/21 in Nielsen all outlet data in Southern California.  That’s while each of brands #2-4 dropped around 8%.  Bud Light down 8.2%, Coors Light 8.6% and Corona Extra down 8.1% same period.  Bud Light lost 1.1 share to 8.2, Coors Light down 0.9 share to 6.9 and Corona Extra down 0.7 share to 5.6.  How quickly things change even in nation’s biggest scan mkt!  Michelob Ultra grew another 26% and became a top 5 brand with 3.8 share, up 0.7 share.  But growth of Modelo Especial and Mich Ultra, impressive as it remains, dwarfed by explosive growth of White Claw Variety Pack. It gained more than both combined. Jumped nearly 7x, 651%.  Grew explosively from 0.3 share to 2.1 share.  And White Claw became a top 10 brand, #9, surpassing Heineken, closing in on Miller Lite.  Miller Lite $$ down 3% and it dropped to 2.2 share.  Heineken and Stella (#10 and #11) $$ sales each down 7%.

Constellation at 30.3 share last 13 weeks in SoCal scans, up just 0.1. Modelo Especial now over half its biz there and still up 0.9 share, while Corona Extra almost 20% and down 0.7.  Means rest of Constellation portfolio lost 0.1 share in biggest mkt.  Includes double digit growth for Pacifico, Premier up 35%, but also Familiar down 6% (#15 brand) and Corona Light down 20%.  Anheuser Busch at 25 share, down 0.7, while MC down to 15.7 share, down 1.4.  And Heineken USA down 1.4 share to 7.6.  Boston gained 1.1 share to 3.1. 

Reyes Beer Division’s Harbor Dist  will buy W.A. Thompson Dist in Bakersfield, Co in deal expected to close Dec 6.  Thompson sells about 7.1 mil cases, including almost 3 mil each of Constellation and MillerCoors brands.  Purchase price all in likely between $175-200 mil. If Reyes pays 7x GP for Constellation Brands, as it has in recent deals, that’s already $120+ mil.  This follows Reyes buys earlier this yr of Central Coast (a little over 2 mil cases) and DBI (Reyes bought over 26.5 mil cases).  So this yr alone, Reyes has bought over 35 mil cases in nation’s largest mkt and will be spending between $650-700 mil.  That follows around $500 mil it spent in CA alone last yr on beer deals (recall it bought Constellation from 3 AB distribs, plus Beauchamp).   Reyes sez it bought 50 mil cases in CA in last 18 mos.  W.A. Thompson owner Mary Trichell took over biz many yrs ago when her husband passed away and she built one heckuva biz over decades.  Deal expected close by yr end. Once this deal closes, Reyes will distribute almost 130 mil cases, about 40% of all the beer in CA.    

Unusual amount of recent distrib deal activity includes two 4+ mil case MC distrib transactions announced just over past weekend.  First, KEG 1 is makin’ its move across state lines to purchase RMC Dist Co in Colorado Springs, the 2 cos jointly announced.  RMC over 4 mil cases.  Between TX and CO, KEG 1 will sell about 10 mil cases annualized when deal gets done.  It’s expected to close in Q4.  Recall, KEG 1 is consortium of 10 well-known MC distribs totaling over 100 mil cases, formed over a decade ago, as a Reyes alternative, tho it hasn’t made that many deals.  But it probably paid pretty penny for this purchase in desirable locale with growing population and portfolio that includes Constellation, Heineken, Mike’s, Boston, New Belgium, Diageo etc.  Deal also sets them up for potential further transactions, notably MC’s Denver branch, if it were ever to become available, tho nothing is happening on that now as far as INSIGHTS can tell.  That branch an object of keen desire for a number of distribs.  RMC ownership group, including David West, Bob Ariano and ceo Pete Betka, reportedly has a majority, while prexy Mike Pfalmer (original co Geo Pfalmer and Co started in 1940) has a stake as well.   

Meanwhile, Certo Brothers in Buffalo, NY sold to Wright Bev Dist in Rochester, according to Buffalo News and Buffalo Business First over the weekend.  Certo about 4.5 mil cases, one source estimated.   Certo in biz for 107 yrs, had tried to sell in past.  Wright Bev did not buy Certo’s building.  Certo has about 200 employees, including 82 warehouse workers and drivers, report local newspapers.  Wright Bev has about 400 employees.   Wright is negotiating with Genessee County Economic Development Center on new building in LeRoy, between Rochester and Buffalo. 

This is 3d and 4^th MC transaction that INSIGHTS reported on in last 2 weeks.  Others were smaller deals for Gerry Dist in MI and Norri in MN.  A fifth distrib deal just announced (this one in AB system): AB buy of Markstein in San Marcos last week.  And there are more coming soon. Pace of wholesaler consolidation is undeniably quickening now.  INSIGHTS has already tracked over a dozen deals in MC system this yr.  So this will be an above avg yr.  More consolidation happening for a variety of reasons, including big offers at right time for rational owners, more realistic expectations of sellers with declining assets and more. Got thoughts on quickening pace of consolidation?  Send ’em to This email address is being protected from spambots. You need JavaScript enabled to view it..    

Recall that after Molson Coors acknowledged earlier this yr that it had underreported tax liability after acquisition of MillerCoors, stock took a quick 10% hit and numerous investors filed securities fraud suits.  They charged Molson Coors’ and top execs’ actions artificially inflated stock price.  US Dist Ct judge in Colorado just consolidated 2 of those suits into one there and ruled that “multiple pending bids for lead plaintiff and lead counsel would be decided ‘soon,’” reports Law360.  Elsewhere, US Appeals Ct for 7^th Circuit refused to reconsider its decision to allow only parts of small brewer Mountain Crest’s antitrust suit vs ABI and Molson Coors over their actions in Canadian mkt.  Mountain Crest sought reconsideration of broader antitrust charges against ABI and TAP, but it will be able to proceed only on limited number of claims, “including that the companies conspired to get Ontario to approve” a rule restricting sales of specific package sizes, again per Law360.   

Distillers, vintners and importers are howlin’ about the 25% tariffs tacked on Scotch whisky, liqueurs, cordials and some European Union wines earlier this week in connection with civil aviation subsidies.  Distilled Spirits Council, Wine Inst, NAABI and 7 other trade assns said in joint press release that this latest round “further ensnarls the distilled spirits industry” in trade war started last yr when EU smacked American whiskey with 25% tariff to retaliate vs aluminum/steel tariffs and 54% tariff China levied on US wines.  Exports, which had been growing solidly, got whacked, natch, and lotsa jobs threatened, assns say.  In latest round, “Diageo was arguably the worst hit,” Reuters suggests, noting its scotch and Bailey’s brands “exposed to the levies,” while French champagne/ cognac “spared for now.”  Short term, Diageo can probably hold off on passing tariffs on to consumers, but “if Washington’s broader trade war with China is anything to go by, this could be just the aperitif.”     

Meanwhile, EU brewers and their US importers caught a break.  Their NA brews, which were on original list of targets for this latest round of tariffs, were not included.  Beer Inst had sent comments to US Trade Rep back in May asking that Euro NA brews be removed from “the list.”  Sure enough, USTR list that came out this week did not include NA brews.  Good news especially for Heineken 0.0, just gettin’ goin’ in US.