Could this have any relevance to all the beer distrib consolidation happening in CA?  In a speech yesterday, California Attorney General Xavier Becerra tackled subject of consolidation head on, tho he mainly seemed to be talking about public cos.  “A lot of us are concerned about making sure that consolidation is for efficiency purposes,” he said, rather than to push for higher prices, according to a report in Reuters.  “On Wall Street, “ he added, “consolidation is almost a given in order for  you to ensure greater quarterly returns.  We want to put the brakes on those who want to consolidate for the sake of quarterly returns….  If you’re consolidating, we’re looking.”   CA is also “leading a fight” to stop T-Mobile US from buying Sprint, and stopped Valero Energy Corp in 2017 “from buying the last independent petroleum distribution terminal.”  As Reyes has bought up more and more of CA distribution, some have wondered whether it would come under scrutiny there.  Not yet, but Atty Gen’s statements certainly make that prospect more plausible.    

Crook & Marker has rebooted and is coming back with a boatload of new products for 2020: 4 versions of a Spiked Soda (Cola, Ginger Ale, Lemon Lime and Root Beer) as well as a Spiked Lemonade, Spiked Tea and Spiked and Sparkling Coconut.  Each of those come in variety packs with several different flavors.  So lotsa new SKUs and added complexity, leading one distrib source to ask: “Who are you?”  His point: co lacks a clear identity for consumer.  Complicating matters further, Crook & Marker is asking at least some distribs to exercise right of first refusal within 30 days, claiming “the Spiked Soda products represent an entirely new brand line” and if distrib refuses, it loses any right to brand and Crook & Marker can assign it to whomever it wants.  That’s not likely to sit well with distribs or their attys.  “Exercising” right of first refusal means that distrib will “exercise diligent efforts to market and present all of the Innovations to substantially all retail accounts within the territory within 90 days,” it sez. And distribs must also “carry a sufficient inventory of the Innovations to fulfill all reasonably anticipated retail orders.”  If distrib declines ROFR (Right of First Refusal), he “relinquishes any and all claims to the Innovations and… acknowledges that Crook & Marker retains the unencumbered right to assign the innovations to a competing wholesaler.”  This from a co that distribs typically describe in underwhelming terms in yr 1.   How to win friends and influence people!

Anheuser-Busch InBev has struck a multi-year deal to be “announced imminently” to return as official beer sponsor of the National Hockey League, per Sports Business Journal.  AB’s returning to the rink for first time since 2011, when MillerCoors inked its sponsorship deal.  Recall at start of season in Oct, Boston Beer struck a 5-yr sponsorship deal for its Truly Hard Seltzer to be NHL’s “official hard seltzer,” which was co’s first deal with a national sports league.  Speaking of Truly, Boston Beer is expanding its availability for air travelers. American Airlines will begin serving Truly Hard Seltzer on select flights Jan 1 and on all flights by Feb 1, priced at around $8 in economy class, per The Points Guy blog.  In Nov, Jet Blue “became the first airline to offer hard seltzer” with its own deal to serve Truly, per Forbes.

Not the headline or story that brewers and other alc bev producers wanted to see today.  But Wall St Journal reports: “Lawmakers deadlocked over tax measures might not take action before they adjourn for the rest of the year, creating uncertainty for,” it turns out, a lot more industries than beer, wine and spirits.  Indeed, WSJ doesn’t get to “alcohol producers” as interested parties in tax legislation until final sentence of article.  Others who need tax bill by end of year include: biodiesel industry, medical-device makers, restaurants, low-income households, those with “Cadillac” health plans and more.   One House member blames Senate for stalemate, Repubs blame Dems, natch.  “They may yet agree on a deal,” WSJ reports, “perhaps a scaled-back collection of tax breaks added to a year-end spending bill.  But so far, no single must-pass provision has emerged as important enough to drag along the rest of the items.”  At same time, WSJ editorial board warns against a “return of the tax games.”  Editorial today criticizes Repubs and Dems in Congress for “working together behind the scenes to fleece taxpayers with another burst of special interest tax subsidies before they leave for the year.”  Net-net: editorial side of WSJ would prefer to see temporary tax breaks from 2017 die at end of this yr, and no new ones adopted. 

Meanwhile, beer folk keep punching away.  Brewers and their allies in alc bevs held “action day” in DC on Dec 5 to urge Congress to extend excise tax breaks set to expire on Jan 1.  And Beer Inst, Brewers Assn ceos Jim McGreevy and Bob Pease wrote op-ed in Washington Examiner yesterday pointing to “real stories and tangible evidence of the positive effects” that tax breaks created, in terms of increased investments, additional jobs, etc.  “Uncertainty surrounding the tax rate,” they wrote, “threatens this success” and brewers “may even be forced to make decisions that could very well unravel much of the growth seen in recent years.” 

New Belgium sale to Lion Little World Beverages/Kirin Holdings is still under review and now has hit an unusual potential road block amid process for approval from NBB’s ESOP. “Opposition” to Kirin’s “joint venture with a military-run company in Myanmar is creating headwinds for its expansion plans in the US” as NBB’s employees are being “urged” by various human rights groups to oppose deal, reported Nikkei Asian Review.

Kirin has joint venture with Myanmar Economic Holdings Ltd (MEHL) which is reportedly funneling revenue to the military there, according to United Nations report in Aug, “enabling the armed forces’ brutal crackdown against the country’s Rohingya Muslims.” And MEHL controls “more than 80% of Myanmar’s beer market.”

So NBB’s “reputation as a socially responsible company stands to be tarnished,” activists point out.

Among those voicing concerns, “long-time Burmese democracy campaigner Khin Ohmar” asks NBB not to go thru with the merger if Kirin maintains ties with MEHL, adding that NBB employees are “in a unique position to take the right stand.” The Karen Organization of America, The Karen Community of NC and Asheville-based Inclusive Development International also “urged” co to nix the deal. “The Burmese state and its key actors have committed genocide against the Rohingya and crimes against humanity against other ethnic minorities,” they said in joint statement to paper. “The heat is just going to keep increasing on Kirin,” sez Simon Billenness, executive director of the International Campaign for Rohingya. “It’s going to prove to be a barrier and a hindrance to them acquiring more companies, particularly craft brewers and other companies that have a more socially responsible approach to business.”

NBB deal is currently expected to close sometime in late Dec, an NBB spokesperson told paper.  And “management remains committed to the sale.” As sale announced, NBB co-founder Kim Jordan wrote open letter saying NBB committed to remaining a “force for good as a business.”  In response to these developments, co told Nikkei: “While reports about Kirin’s operation in Myanmar gave us pause, we believe Kirin’s commitment to human rights aligns with our mission and we remain fully committed to our values and beliefs.”

Three 15-second White Claw ads now airing nationally on ESPN, FOX, etc.  They are “high end black and white spots to continue to drive high end brand imaging,” said note to distribs.  In 6 Southwest states, “White Claw is the clear #1 at 61 share.  With the seltzer space growing next year in all channels, we’re envisioning White Claw climbing to 70 share across the region,” wrote gen mgr Robert Goodwin.  In latest 4 weeks, Truly at 23 share, AB 8.6 (Natty at 4), Smirnoff down to 2.7 and MC hanging in at 1.2 share. Bring on Vizzy!

Deidre Mahan, prexy of Diageo North America, pegged Guinness as “3d fastest growing beer in the imported category” on call with investors this morn.  It “continues to gain slight value share in the category, driven by the strength of core stout, partially offset with declines of Blonde.”  Then too, little over 1 yr after MD brewery opened, over 500K visitors so far.  In IRI MULC data thru Nov 3, Guinness Draught +4.6%, Extra Stout +10.3%.  Smirnoff family of FMBs/seltzers running +20.4% same period.  Interestingly, Deidre did not mention FMBs/seltzers in her 25-minute presentation (investors-only Q&A transcript not yet available), mostly focused on Diageo’s US spirits biz, natch, which is hummin’ along, driven by whiskey, tequila and gin, tho vodka/rum softer.

“We moving fast and furious,” sez Molson Coors portfolio brand strategy director Dilini Fernando (in MC blogpost this morn), and “catching this trend at the right time,” as MC announced launch of Vizzy hard seltzer at the end of March 2020.  Execs promised Vizzy would have key point of differentiation and here it is: “the first hard seltzer made with acerola cherry, the superfruit high in the antioxidant vitamin C.”  Don’t know how explicit mktg message will be, but “we’re making a big, bold claim,” sez Fernando, noting target is 25-39 yr olds “seeking to make better choices,” and pointing out that no alc bevs have so far made claims about antioxidants, even while over 500 other food/bev products have done so in last 2 yrs.  “Antioxidants are natural or man-made substances that may prevent or delay some types of cell damage,” MC blog points out.  Also, Vizzy “taking cues from non-alcohol trends, where consumers have progressed beyond products touting the removal of negative ingredients such as sugar and artificial colors and into products with the presence of positives.  Thus far, no hard seltzer has made such a claim.”  MC’s gotta tread lightly here, as TTB bars alc bev producers from making any health claims.  Gotta note too that while Dilini sez MC moving “fast and furious,” and ceo Gavin Hattersley has often said Molson Coors would “move faster,” Boathouse SpikedSeltzer launched in 2013 (AB purchased it in 2016), White Claw launched in Jun, 2016 and Vizzy still several mos away. 

Other Vizzy facts: four flavors, fermented cane sugar, gluten-free, 100 cals per 12 oz, 1 gram of sugar, 5% ABV, line-priced with White Claw/Truly.  MC hadda make “really big move” in seltzer, Dilini summed up: “rather than making incremental bets on innovation, we’re really trying to leapfrog trends.  We think there’s a lot of room to play in this space with truly differentiated products, and we know we have one with Vizzy.”   

David Coors Will Stay in Golden, Head Up Next Gen Bevs, Including Beer, Wine, Spirits and Cannabis Tho Molson Coors shutting down Denver offices, Peter Coors’ son David will remain there as prexy of Next Generation Bevs, part of the Emerging Growth Bevs division headed up by Pete Marino.  David will oversee AC Golden pilot brewery (located inside Golden plant), and manage “our new wine and spirits business and cannabis ventures,” Pete told Westword.  In addition to investments in Golden plant (several hundred million) “we’ll be announcing some exciting new investments to the RiNo [trendy River North Art District Denver nabe] brewery very soon as we expand the footprint of America’s #1 craft beer,” Pete also said.

Final figures may differ, but Brewers Assn flagged some preliminary estimates for 2019 in release today.  Recall, BA estimated 1^st half volume up 4%, and “given reports in the second half of the year, 4% overall growth again seems likely for 2019.”   IRI and Nielsen scans suggest slower trends but they include different set of brewers/brands.  All outlet Nielsen data reported today shows craft volume up just 0.1% thru Nov 30 and big set of “remaining brewers,” a good proxy for smaller craft, up just 1.8%.  Scan data does not capture taprooms, but even that biz has slowed this year, BA economist Bart Watson has noted.  Also from BA today: “more than 8,000 American breweries operated in 2019.”  And with increasing competition, more closures, so “an estimated 300 breweries will have closed in 2019.”    

What a coincidence!  Top 4 megabrands in industry collectively lost 2.5 share of $$ to 30 share in Nielsen all outlet data yr-to-date thru Nov 30.  Bud Light alone down 1.4 share of $$.  Meanwhile, White Claw and Truly gained 2.2 share to 3.1.  So the tail is wagging the dog.  And stealing share from the top.   Of course, megabrands in decline for yrs. Top 4 brands lost 2 share of $$ last yr to 32.5.  But share loss even steeper this yr.  And tho hard seltzer brands do grab some portion of their biz from other sources, even outside of beer, sure looks like lots of their biz sourced from biggest beer brands.  Michelob Ultra and Modelo Especial picked up 1.3 share between ’em.

With 11 months of data in, what’s it look like at supplier level?  Well, AB volume down 1.9%, but $$ down 0.5%.  Meanwhile, MC volume down 3%, $$ down 1.7%. Constellation volume up 10%, $$ up 11%.  AB and MC dropped almost 3 share of $$ in all.  AB down 1.7 share, MC down 1.1.  Constellation gained 0.9 share of $$. HUSA volume still down 4.4%, but $$ down 2.2%.  It lost 0.3 share of $$.  Mike’s volume up 75%, $$ up 76%. And it gained 1.6 share to 3.9 (4.7 for 4 weeks).  Meanwhile, Boston boxes up 22%, $$ up 21%.  It gained 0.5 share of $$ to 3.4.