A bit of a head-scratcher on its face.  AB used hi-profile NFL Thursday night sponsorship slot to advertise Bud Light Platinum.  So Platinum becomes “the official beer of Thursday night football” and will get a “sizable chunk” of  AB’s NFL mktg budget, according to Ad Age.  But Bud Light Platinum ain’t a huge brand and hasn’t grown in yrs.  It peaked in its intro yr 2012 at 1.8 mil bbls and declined ever since.  Last yr, it was an estimated 725K bbls, less than 1% of AB’s volume.  And Bud Light Platinum volume down 13% yr-to-date thru August 11 in IRI multioutlet + convenience data.  At least, it is high priced.  Over $30 per case. Or nearly 1.5 index to Bud Light. “We see a lot of opportunity for growth with Platinum,” AB spokesperson told Ad Age, “especially with the new premium packaging and positioning as a beer for nighttime drinking occasions.”  Platinum will get “solid amount of NFL inventory,” AB reiterated.     

Platinum Packaging Makeover; “Brewed With No Corn Syrup” Still in New Bud Light Ads  AB gave Bud Light Platinum a packaging makeover with “new deep blue coloring, a slim can and its 6% ABV and ‘Brewed for the Night’ emblazoned on the pack,” said AB in release.  New ads take cue from Bud Light’s medieval world, adding Bud Knight Platinum to “familiar” cast of “Dilly Dilly characters.” In one ad, King and co leave Bud Light Knight behind to party with Bud Knight Platinum.  “Did you ditch him,” Bud Knight Platinum asks.  “He doesn’t have a clue,” sez the King. “Yes I do,” sez Bud Light Knight.  Separately, AB also introduced 2 new 15-second Bud Light ads that feature “crisp” taste of Bud Light and also “brewed with no corn syrup” slogan.  Recall, judge issued late May preliminary injunction that didn’t prohibit that slogan as it didn’t imply corn syrup in final product.  But ruling earlier this week grants preliminary injunction on packaging and prohibits (starting next year) “no corn syrup” on packaging on grounds that slogan could create misimpression that corn syrup is in competitor’s final product.    

Cider category continues to seesaw year after year, largely at the mercy of whatever direction leading brand family Angry Orchard is headed. And this year, with Angry Orchard and several other big company cider brands in decline, total cider $$ down 2.5%, volume down 4.4% yr-to-date thru Aug 11 in IRI multi-outlet + convenience data, including $$ down 4% and volume down 5% for latest 12 weeks. But regional cideries (excluding Boston Beer, AB, HUSA, MC and VT Cider/C&C) are consistently gobblin’ more share of category each year. Collectively they grew 17.5% (both $$ and volume) YTD thru Aug 11, according to INSIGHTS analysis of  data from the BWC Company/IRI MULC, gaining 5.5 share of category $$ to 32.6. So natl cider brands declined 10% and fell to just over 2/3 of category $$.

Angry Orchard Smaller Brands Driving Most of Its Decline YTD; Rosé -26% for 12 Wks Angry Orchard $$ sales declined 8% YTD to $138.6 mil thru Aug 11 in IRI MULC per BWC Company. Its $12.4 mil decline is nearly 2x the size of total cider category (down $6.6 mil). Notably, majority of decline YTD comin’ from smaller brands in portfolio. Flagship Crisp Apple $$ sales healthier, tho still off slightly (-0.5%) YTD. Crisp Apple remains a sizable brand within total beer; it’s 32nd best-selling brand by $$ in natl IRI data. Easy Apple had tuffest $$ drop of any AO brand this yr,  $$ down 56%, -$3.4 mil. Rosé sales slipping further into negative, down 9% YTD, including -26% for latest 12 wks while lapping last year’s launch. And both AO Variety Pk (-14.5%) and Green Apple (-19%) down double-digits YTD. Altogether, Angry Orchard still makes up 53.7 share of cider category $$ and 57.6 share of volume YTD, even as it shed 3.3 share of $$, 2.8 share of volume.

AB is Only Big Brewer/Natl Brand Growing in Cider, +4%; HUSA -27%, MC -24%, VT Cider -11% Notably, AB is the only larger brewer growing its cider biz this yr, with $$ up 4% to $10.6 mil thru Aug 11 in IRI. New Stella Spritzer, new 10 Barrel Soft Core hard cider and continued triple digit growth from Virtue Cider ($$ up 116%) more than offset Stella Cidre double-digits declines (-17%). Meanwhile, HUSA’s Strongbow down 27% to $10.1 mil YTD, falling to #4 cider player in US despite being #1 global cider brand. MC’s Smith & Forge (-52%) is dragging total MC cider down 24% to $8.1 mil YTD even as Crispin up +9% YTD and +31% for 12 wks. And while VT Cider showing signs of improvement lately, $$ sales still down 11% to just $6.2 mil YTD.

Bold Rock, 2 Towns Leading Regional Growth; Top Cos All Up  VA’s Bold Rock and OR’s 2 Towns are adding most $$ growth of any regional cider co (notably, both delved into hard seltzer category this year as well, but this dataset is only lookin’ at their cider biz). Bold Rock cider $$ grew 8% to $16.6 mil, further pulling away as #2 cider co nationally. Sales are well ahead of ABI and HUSA cider, and more than double the size of MC cider and VT Cider. 2 Towns ciders grew 23.5% to $8.8 mil YTD thru Aug 11, surpassing MC cider. And slew of other top regional ciders growing solidly as well, including Austin Eastciders (+17%) and Ace (+18%) both larger than VT Cider in scans at $7.8 mil and $7.1 mil respectively; VT’s Citizen Cider (+22.5%), WA’s Seattle Cider (+9%), MA’s Downeast (+45.5%), Incline (+68%), Ciderboys (+35%) and Schilling Cider (+36%) ranging from $3.9 mil to $2.4 mil in sales YTD.   But it’s not all rosy for top regional cider brands, as growth at least for these cos, now coming from innovations, data suggests, much like in craft beer space, with some of their lead brands now flat or down. All told, regional ciders just 0.4 share of total beer/fmb/cider $$ in IRI. Yet several regional ciders continue to gain ground and remain meaningful in their regions, out-selling many sizable craft beer brands in their respective areas.

Craft Brew Alliance lowered shipments and depletions guidance from lofty goal of +5-8% to somewhere between flat and +3% earlier this morn prior to co’s off-cycle conference call held earlier today following ABI’s decision not to acquire rest of CBA. This was more tuff news for CBA as stock price continues to drop further into single digit range; down near 5% to ~$9.30/share at presstime, only raising the stakes for CBA needing to make some kind of move ASAP.

Indeed, this is a particularly “challenging situation,” CEO Andy Thomas acknowledged on conference call, agreeing with one analyst who called it “one of the most challenging situations I’ve seen.” CBA is putting everything on the table while seeking best possible path forward for co and its shareholders, Andy reiterated to investors. That includes everything from alternative strategic partners, divestiture of brands, “go-it-alone scenario,” stock buy-backs, and much more. “There’s a belief out there” that CBA is “so intertwined” with AB that it “could never extract CBA, or Kona” from AB system. That’s “not a narrative I agree with,” yet that doesn’t mean CBA is “going to go and sell Kona” either, said Andy. But one thing’s for certain: “status quo” is “not an acceptable outcome,” he stated. “Everything is on the table…not because everything’s fine.” Progress “updates” could be made as soon as “in coming weeks.”

Yet investors should still be excited about several aspects of CBA’s biz, sez Andy. The “building blocks” that co has are “still really good blocks,” and management has “demonstrated” that “we’re willing to put blocks together differently,” he said, referencing potential “divestiture of some brands” or “total restructure of G&A” spend among various scenarios. Then too, ABI has “indicated their intent to be constructive moving forward” as CBA looks into alternatives. And CBA now has additional $20 mil in the bank. Tho that will “stay in cash” for now while “keeping our powder dry” and ready for use “depending on actions in the coming weeks and months,” chief strategy and financial officer Christine Perich and Andy added. All in, co is “optimistic” and “confident” it can “put [blocks] together in a way that unlock[s] value,” sez Andy. (For more details from CBA call see today’s issue of sibling pub Craft Brew News.)

AB announced big restructuring today that “is an investment in our front-line sales team,” chief sales officer Brendan Whitworth wrote distribs and involves “over 100 promotions,” AB told INSIGHTS in statement. But it also involves some layoffs. There are “a small number of job losses,” acknowledged AB. “Less than 1% of our sales force will be leaving the company,” said AB (13 jobs).  “These are difficult decisions to make, and ones we take very seriously, but they are vital to ensure we are structured in the best way possible.”  Many folks must also relocate.  All this is much buzzed about and creating confusion today within AB system, but AB has couched it as “an opportunity to evolve our Sales Organization… We realize that we must provide a higher level of commercial planning and execution in working with you” as Brendan wrote distribs.    

Here are some key elements of restructuring (quoting Brendan’s letter to distribs): “There will no longer be District Managers or Sales Directors. We are introducing new positions that will encompass our Commercial Mindset.”  Commercial Directors who will be “owning the relationship with the wholesaler/being the single point of contact.” And AB also “introducing support positions” like “Territory Managers” who play 2 key roles: “supporting Commercial Directors who work with wholesalers that have several buildings/branches” and “ensuring that we have enough span of control in more rural areas.” 

Under new structure “we expect folks to stay in their role longer, have a more strategic relationship with our wholesaler partners and drive a stronger commercial mindset,” wrote Brendan. “There will be an increase in 1:1 relationship with our largest wholesalers while maintaining a very healthy ratio for the entire system. The only difference is that those ratios will reflect more senior and experienced AB personnel.”  Another aspect of change, according to Brendan: it will “allow us to better manage our talent pipeline.”   From now on, “entry level sales employees will begin in” branches, NY & St Lou offices.  “This will allow them to learn about the business… before moving into a wholesale-facing position.” AB told INSIGHTS: “We have identified an opportunity to evolve our current Sales Organization through an elevated role structure.”  All this comes amidst steeper recent  AB share losses in scan data and just before AB’s big meeting with distribs in St Lou next week.

Cider category continues to seesaw year after year, largely at the mercy of whatever direction leading brand family Angry Orchard is headed. And this year, with Angry Orchard and several other big company cider brands in decline, total cider $$ down 2.5%, volume down 4.4% yr-to-date thru Aug 11 in IRI multi-outlet + convenience data, including $$ down 4% and volume down 5% for latest 12 weeks. But regional cideries (excluding Boston Beer, AB, HUSA, MC and VT Cider/C&C) are consistently gobblin’ more share of category each year. Collectively they grew 17.5% (both $$ and volume) YTD thru Aug 11, we found according to data from the BWC Company/IRI MULC, gaining 5.5 share of category $$ to 32.6. So natl cider brands declined 10% and fell to just over 2/3 of category $$.

Angry Orchard Smaller Brands Driving Most of Its Decline YTD; Rosé -26% for 12 Wks Angry Orchard $$ sales declined 8% YTD to $138.6 mil thru Aug 11 in IRI MULC per BWC Company. Its $12.4 mil decline is nearly 2x the size of total cider category (down $6.6 mil). Notably, majority of decline YTD comin’ from smaller brands in the portfolio. Flagship Crisp Apple $$ sales are healthier, tho still off slightly (-0.5%) YTD. Crisp Apple remains a sizable brand within total beer, currently 32nd best-selling brand by $$ in natl IRI data. Easy Apple had tuffest $$ drop of any AO brand this yr, as slashed 56%, -$3.4 mil. Rosé sales slipping further into negative territory, down 9% YTD, including -26% for latest 12 wks while lapping last year’s launch. And both AO Variety Pk (-14.5%) and Green Apple (-19%) down double-digits YTD. Altogether, Angry Orchard still makes up 53.7 share of cider category $$ and 57.6 share of volume YTD, even as it shed 3.3 share of $$, 2.8 share of volume.

AB is Only Big Brewer/Natl Brand Growing in Cider, +4%; HUSA -27%, MC -24%, VT Cider -11% Notably, AB is the only larger brewer growing its cider biz this yr, with $$ up 4% to $10.6 mil thru Aug 11 in IRI. New Stella Spritzer, new 10 Barrel Soft Core hard cider and continued triple digit growth from Virtue Cider ($$ up 116%) more than offset Stella Cidre double-digits declines (-17%). Meanwhile, HUSA’s Strongbow is down 27% to $10.1 mil YTD, falling to #4 cider player in US despite being #1 global cider brand. MC’s Smith & Forge (-52%) is dragging total MC cider down 24% to $8.1 mil YTD even as Crispin up +9% YTD and +31% for 12 wks. And while VT Cider showing signs of improvement lately, $$ sales still down 11% to just $6.2 mil YTD.

Bold Rock, 2 Towns Leading Regional Growth; Top Cos All Up, Tho Some Top Brands Dipped VA’s Bold Rock and OR’s 2 Towns are adding most $$ growth of any regional cider co (notably, both delved into hard seltzer category this year as well, but this dataset is only lookin’ at their seltzer biz). Bold Rock cider $$ grew 8% to $16.6 mil, further pulling away as #2 cider co nationally. Sales are well ahead of ABI and HUSA cider, and more than double the size of MC cider and VT Cider. 2 Towns ciders grew 23.5% to $8.8 mil YTD thru Aug 11, surpassing MC cider. And slew of other top regional ciders growing solidly as well, including Austin Eastciders (+17%) and Ace (+18%) both larger than VT Cider in scans at $7.8 mil and $7.1 mil respectively; VT’s Citizen Cider (+22.5%), WA’s Seattle Cider (+9%), MA’s Downeast (+45.5%), Incline (+68%), Ciderboys (+35%) and Schilling Cider (+36%) ranging from $3.9 mil to $2.4 mil in sales YTD.

Tho it’s not all rosy for top regional cider brands. Several Bold Rock top brands are struggling lately, including Bold Rock Seasonal down 15%, flagship Virginia Apple up just 1% and IPA cider down 4%. Similarly, Austin Eastciders flagship original dry cider slipped 10% YTD. So majority of growth, at least for these cos, now coming from newer innovations, data suggests, much like in craft beer space. All told, regional ciders hardly make a dent in natl sales picture. Collectively just 0.4 share of total beer/fmb/cider $$ in IRI. Yet several regional ciders continue to gain ground and become meaningful brands within their respective mkts, out-selling many sizable craft brands in their respective areas.

Hard Seltzer Effect? Even as regional ciders continue to gain ground, gotta wonder whether explosion of hard seltzer sales are having an effect on hard cider segment? Recall, cider execs in the past had pointed to hard sodas as key reason for cider decline in 2016 that carried over thru 2017. Cider returned to growth last yr with big help from rosé entrants. But this year it’s back in decline. Hard seltzers are already much bigger than hard sodas ever were, and currently about 3X the size of cider category and counting. Several leading regional cider cos (plus Boston Beer) already launched their own hard seltzer brands, including Bold Rock, 2 Towns and Seattle Cider among others, perhaps looking to jump ahead of any potential consumption disruption. Stay tuned.

AB announced big restructuring this afternoon that “is an investment in our front-line sales team,” as chief sales officer Brendan Whitworth wrote distribs and involves “over 100 promotions,” as AB told INSIGHTS in statement. But it also involves some layoffs. There are “a small number of job losses,” acknowledged AB. “Less than 1% of our sales force will be leaving the company,” said AB (13 jobs).  “These are difficult decisions to make, and ones we take very seriously, but they are vital to ensure we are structured in the best way possible.”  Many folks must also relocate.  All this is much buzzed about and creating confusion today within AB system, but AB has couched it as “an opportunity to evolve our Sales Organization… We realize that we must provide a higher level of commercial planning and execution in working with you,” Brendan wrote.    

Here are some key elements of restructuring (quoting Brendan’s letter to distribs): “There will no longer be District Managers or Sales Directors. We are introducing new positions that will encompass our Commercial Mindset.”  Commercial Directors “owning the relationship with the wholesaler/being the single point of contract.” And AB also “introducing support positions” like Territory Managers” who play 2 key roles: “supporting Commercial Directors who work with wholesalers that have several buildings/branches and 2. Ensuring that we have enough span of control in more rural areas.” 

Under new structure,  “we expect folks to stay in their role longer, have a more strategic relationship with our wholesaler partners and drive a stronger commercial mindset,” wrote Brendan. “There will be an increase in 1:1 relationship with our largest wholesalers while maintaining a very healthy ratio for the entire system. The only difference is that those ratios will reflect more senior and experienced AB personnel.”  Another aspect of change, according to Brendan. It will “allow us to better manage our talent pipeline.”   From now on, “entry level sales employees will begin in” branches, NY & St Lou offices.  “This will allow them to learn about the business… before moving into a wholesale-facing position.” AB  told INSIGHTS: “We have identified an opportunity to evolve our current Sales Organization through an elevated role structure.”  AB “constantly looking for better ways of working.”

As retailers continue to challenge state residency laws for retailers in wake of Jun US Sup Ct decision, retailer advocates also continue to press state legislators to pass laws that would allow wine/liquor retailers to ship across state lines.  Recall, one key case won by retailers last yr declared Mich law barring out-of-state stores from shipping to Mich consumers unconstitutional.  (Mich allows its retailers to ship to in-state consumers.)  US Dist Ct tossed Mich law last fall, but put injunction on hold until US Sup Ct decided Tenn case.  Now that Tenn case decided, state’s appeal will be heard by US Court of Appeals for 6^th Circuit.  Briefs will be filed this fall.  As that plays out, Natl Assn of Wine Retailers (NAWR) calls on Mich legislature “to fix an unconstitutional Michigan wine shipping law,” and “craft a constitutional law that doesn’t seek to protect special interests, but rather allows Michigan consumers to receive wine shipments from out-of-state wine retailers and the state to collect taxes on those shipments.” 

Press release also takes aim at Michigan Beer and Wine Wholesalers Assn (MBWWA), which NAWR claims “assured lawmakers the law’s discrimination against out-of-state retailers was perfectly permissible and could not be challenged,” even tho earlier version of same law ruled unconstitutional too.  Mich consumers have paid plenty to defend such “bad laws pushed by” MBWWA, NAWR sez, “hundreds of thousands if not millions.”  Indeed, Mich has “lost wine shipping laws,” twice in US Dist Ct in MI, once at 6^th Circuit and once at US Supreme Ct, each time with help of MBWWA, assn adds.  “We think it’s time the Michigan lawmakers do something for Michigan consumers and Michigan taxpayers and ignore the advice of Michigan beer and wine wholesalers.”

Jefferies analyst Kevin Grundy downgraded Boston Beer to “underweight” on increased seltzer competition this morn and stock down 6% today at presstime.  Jefferies consumer survey said brand loyalty “low” in segment and drinkers “keen to experiment,” according to report in Investor’s Business Daily.   But “still room to grow” with awareness at 64%.  “Demographics skew toward women at 56%,” wrote IBD, compared to 43% for beer.  And “spiked seltzer draws a younger crowd with 55% of drinkers aged 21-34 compared with the low 30s in percentage terms for beer, wine and spirits.”  Boston Beer volume growing at 36% in scan in Q3, projected Consumer Edge analyst Brett Cooper this morn.  So Brett now believes Boston volume will be up about 30% in Q3, compared to his previous estimate at 17%.

Boston Beer ceo Dave Burwick made rare public appearance on CNBC’s Power Lunch on Friday 8/30.  And he was talkin’ about, you guessed it, hard seltzer (plus a little bit o’ cannabis) and Truly’s near tripling.  Seltzers have “disrupted the broader beer business the way craft beer did in the 1980s,” according to Dave.  There’s a “Gold Rush right now.”  And Boston Beer is “tripling down.”   Meanwhile, Boston Beer will play in cannabis someday, said Dave. “We’re not going to be the first one in, but we’re going to study and learn” and once “category develops,” Boston “will play at some point down the road.”  

Yup, not one of top 5 new brands in IRI data so far this yr is a traditional beer.  Unsurprisingly at the top sits a seltzer.  The #1 new product yr-to-date is Truly Hard Seltzer Tropical Mix Pack at $35.5 mil yr-to-date thru Aug 25 in IRI MULC data, published this morn by Bump Williams Consulting.  Naturdays is right behind it at $35.3 mil.  Rounding out the top 5: Modelo Chelada Limon Y Sal at $17.1 mil, Corona Refresca Variety Pack at $13.2 mil and Heineken 0.0 at $11.6 mil.  Oddly, no Cape Line included in IRI data.  Cape Line franchise at $18 mil yr-to-date in Nielsen all outlet thru 8/17.  And variety pack at $15.6 mil, including $4 mil in last 4 weeks.  So it likely would be in top 5 in IRI too.

Meanwhile, Constellation got 2 of top 5 innovations.  And HUSA hasn’t had a top innovation brand in yrs and yrs, but Heineken 0.0 is generating some sales.  Interesting too that top new brands include considerable variety:  a chelada, a seltzer, an NA and some FMBs.   Editor’s Note: Definitions and timing play a role.  For example, Bump doesn’t count White Claw Mango as new this yr (it had minimal sales last yr).  

Bud Light Orange vs Bud Light Lemon Tea; Crook and Marker  Biggest difference between last yr and this yr: Bud Light Orange vs Bud Light Lemon Tea.  Last yr, Bud Light Orange led the pack. Got $50 mil in revs in same period, almost 50% bigger than this yr’s #1 new brand.  Compare to Bud Light Lemon Tea, which is #8 new brand, but only got $6.6 mil in revs yr-to-date, only about 13% of Bud Light Orange’s total in same period.  What’s more, Bud Light Orange ain’t cycling, down 37% for 12 weeks thru Aug 11 in IRI MULC.   Another much-discussed new brand, Crook & Marker, did make top 15 new brands. Its variety pack came in at #12 and got $5.1 mil in sales so far this yr.  Note, 5 of top 15 top new brands are craft brands, but new craft brand sales also considerably smaller, because nothing this yr as big as either Hazy Little Thing or Sam ’76 was last yr.  

In wake of US Sup Ct decision to toss Tenn residency requirement for liquor retailers and its potential impact on retailer efforts to obtain cross-border shipping rights, INSIGHTS suggested in Jul: “gotta figure thought [of shipping across state lines] has crossed the minds of some mega-wine and spirits/beer distribs, who would capture efficiencies by doing so.”  Now comes report in Wine & Spirits Daily that Minnesota-based Johnson Brothers, a multi-state wine/spirits distrib (24 states), “voluntarily forfeited its wholesale license in Massachusetts following a recent investigation into the company’s operations” by Mass Alc Bev Control Comm.  Among ABCC’s charges: 1) Johnson Bros bypassed state law requiring all alc bevs shipped into MA  be warehoused in facilities owned by licensee and held there before shipping to retailers (at-rest provision); 2) Johnson Bros made direct purchases from US Distilled Products Co, separate co owned by another Johnson brother, that ran afoul of MA’s cross-ownership rules. 

Turns out: 1) Johnson Bros had virtually no presence in Mass, just “a desk and file cabinet” at another distrib’s warehouse location; 2) its products “almost never enter the warehouse” and “seal to the trucks…never broken until it is delivered to the retailer,” according to investigative report.  Net-net: Johnson Bros took orders from MA mega-retailer Total’s 4 stores and arranged to have that product shipped from CT supplier/importer to those stores without ever coming to rest in MA.  The kicker: Johnson Bros did this at “a wholesale mark-up of approximately 4%.”   

According to W&S Daily, Johnson Bros “in large part does not dispute the facts” in report.  It did respond that US Distilled operates “at arm’s length” from Johnson Bros (despite family tie) and disputed additional ABCC charge, saying that having admin/managerial functions handled out of Minny office did not constitute illegal “transfer of its license.”  Johnson Bros forfeited license Jul 2 and seeks to avoid any further punishment.  Having stung beer distrib Craft Beer Guild for pay-to-play, Total for violating Mass pricing laws and now Johnson Bros, Mass ABCC is on a roll.