Singer/ songwriter Jason Mraz filed complaint against MC for using live performance footage of his popular song “I’m Yours” in a Coors Light Instagram ad without permission, reported Complete Music Update among several news outlets. In May, Coors Light posted video containing “thirteen-second snippet” of Jason Mraz’s performance at BeachLife Festival in Redondo Beach with Coors Light branding and caption “Kicking off summer with the World’s Most Refreshing Beer at the BeachLife Festival,” Complete Music Update recapped. If MC were to have asked permission, Jason sez “he would have declined…due to the family friendly nature of the song,” according to lawsuit. Mraz seeks “statutory damages of $150,000 per infringement” as well as compensation for “various other breaches” based on “publicity and image rights,” sez paper, citing lawsuit. MC contends that it actually has the “contractual rights to post the short Instagram video in question,” but “immediately removed it as a courtesy to Mr. Mraz and his team when they reached out,” spokesperson Marty Maloney told Digital Music News. So co was “very surprised they have chosen to take this route.”

Constellation cfo David Klein just got gig to run cannabis partner Canopy’s biz, a move that shows “there is no question who is in control of Canopy,” as Consumer Edge analyst Brett Cooper observes. Canopy co-founder Bruce Linton is gone and Mark Zekulin will step down as ceo and resign his board seat.  David will be ceo and former STZ exec Mike Lee is cfo.  Loss of David is blow to Constellation, Brett sez, but “on a net basis we like the appointment,” since David experienced and will bring Canopy the “expense control” that’s been “lacking” there.  Operating expenses “running nearly 150% of revenues,” Brett points out.  Then too, for 6 mos thru Sep 30, sales/mktg expenses +86% and R&D spend +650%, Motley Fool reports.  Interestingly, David “knows the industry,” Brett asserts having learned it since STZ bought its stake.  But Canopy “Gets CEO with No Cannabis Experience,” headlined industry letter Green Market Report.  While Canopy share price, like other Canadian cannabis companies, tanked this yr, Constellation remains “very excited” about Canopy’s future and still sees “huge long-term growth opportunity,” sr veep communications Mike McGrew told CNN.  Canopy stock up 12% at presstime.

Brett and Motley Fool have similar take that Canopy still well-positioned, but given intro of cannabis bev/edibles in early 2020 – Canopy rolling brands in Jan and Feb – “it might be more prudent to wait for [Canopy’s] earnings report to see the results from the sale of its derivatives before thinking about buying shares of Canopy,” Fool advised.  More skeptical: Laurent Grandet at Guggenheim, who told CNN “he holds a negative view” of the Canopy investment since Constellation “likely overpaid and the deal is occupying executives’ mind shares and distracting them from key aspects of their business.”  Indeed, “we are very nervous about the Canopy investment outside Constellation’s core competency,” Laurent wrote last week, “with no clear path to generate any meaningful returns in the near term.”  David’s replacement: 18-year STZ vet Garth Hankinson, currently sr veep corporate development.

 An Anheuser Busch InBev brief sent to consultants “pitching to manage” the RFP (Request for Proposal) obtained and perhaps mischaracterized by Campaign US (global biz mag).  Importantly, AB spokesperson sez “we do not have an ongoing global media agency review” tho that’s what Campaign US said coming soon. The RFP does contain interesting info.  ABI going thru “a transformational journey within marketing with media and our relationship with agencies at the center,” said ABI.   ABI “currently invests over $1 billion in media across 50+ markets” globally, it said in document. “Despite knowing the unstoppable trends in digital disruption/fragmentation/ adoption and linear tv cord-cutting,” ABI added, “we are still largely a TV mass marketer spending approximately at 70% Traditional 30% digital” worldwide.  ABI spokesperson told INSIGHTS: “We are constantly evaluating our capabilities and processes. We are investing to become a more data-driven organization to enable deeper consumer understanding, create better products and campaigns and, most importantly, to engage consumers in more meaningful and relevant ways.” But no global agency review, and “our current partners are working close to us on this transformation journey.”

This RFP won’t be decided for months, by Sep 2020, brief sez, according to Campaign US. But it’s basically “a global media consolidation play,” according to “people familiar with the upcoming review.”  Lots of anonymous quotes follow.  “Everyone knows that an ABI media pitch is usually about reducing costs,” sez one source “familiar with the brief.” A consultant said: “I would not be surprised if some major media groups got together and agreed to reject this brief.  They need to stand up to unfair terms of the business.”  Like what? ABI “plans on pushing payment terms from 120 days to 150 for their media agencies.”  That’s not part of RFP, INSIGHTS understands.  One other said: “Only two years ago they put media agencies under huge pressures to cut fees and media prices and some of them won’t be happy to go through that again so soon for very little upside.” Added: “They are one of a handful of advertisers that still views media as a commodity, their agencies like a bank and push their suppliers to accept punishing payment terms.”

In rare public appearance at Beverage Digest Future Smarts conference, ceo of Reyes Coca Cola Bottling Bill O’Brien (a former Coke exec) acknowledged that Reyes will put some bev brands on beer trucks (in response to question). “I think there will be some places that we will investigate that.” Pointed specifically to Topo Chico mineral water brand that is “juggernaut” in TX, that’s been built on-premise, which is “the center of the plate” for beer distribs. “We see an opportunity there,” Bill said, to “distribute Topo Chico off some of the beer trucks.”  Then he expanded list to include “maybe some of our energy products, maybe some water, maybe Coca Cola in glass and aluminum.”  Asked if this would happen within next year, Bill said: “We’re exploring it now.”  But every legislature is “different. I don’t wish the California legislative environment on anybody. You have to be very careful as you wade into these waters.”  At outset, Bill pointed to Reyes Holdings as “story about family and about growth,” pointing out that it’s now the 9^th largest private company with 36K employees and $34 bil in revs.  Those same stats in press release that came out Friday as Reyes Beer Division closed on its latest acquisition, W.A. Thompson in Bakersfield, adding 200 new employees and 7.1 mil cases.  

The agency that has worked on AB’s biggest brand, Bud Light, which has declined about 8 mil bbls, over 20% in last 4 yrs, will now take the lead on AB’s hottest brand Michelob Ultra, which gained near 5 mil bbls, almost doubling in same timeframe.   While incumbent agency FCB will still work on ads for Ultra, Wieden & Kennedy “takes on lead strategic creative duties,” wrote Ad Age.   “The brand is a major pickup for W&K.” This continues “hot streak for the agency’s New York office,” which also got McDonald’s and Ford recently.  Measured media spend for Michelob brand family climbed to $118 mil in 2018, according to Kantar data.  Recall, AB looks to make Ultra #1 in share of voice in 2020.  Super Bowl ad under development “will be handled by FCB,” wrote Ad Age.

Tho Wieden & Kennedy has “total creative control” over Bud Light, recently AB “has shifted to more of a jump ball approach on some of its other brands,” according to Ad Age.  “To some degree… it appears” AB “will now take that approach with Ultra.”   However, change “still amounts to a significant setback for FCB” which now competes with W&K for work.  FCB will take on AB’s “beyond beer” brands like Ritas, Bon & Viv. 

This Mich Ultra move amounts to a big win for W&K, which hasn’t wowed with its Bud Light work.  Bud Light trend has gotten worse on its watch, first with Dilly, then this year its corn syrup ads, which spawned much controversy, even a lawsuit, but not improved trend.  In fairness, Bud Light losing lots to Ultra and now seltzer phenom, trends that are bigger than perhaps any ad campaign (premiumization, health and wellness).

To absolutely no one’s surprise, Total Wine, mega-retailer owned by now-Congressman David Trone and his family, stuck to their litigious ways with a petition to US Supreme Ct filed yesterday.  This time, Total wants high court to toss Connecticut’s post-and-hold, quantity discount ban and minimum pricing laws.  Recall, those laws upheld by 2d Circuit last yr, in decision that Total sez conflicts with 4^th Circuit and 9^th Circuit.  Indeed, this circuit court split is prime reason US Sup Ct should take the case, for final resolution, Total argues.  Conn laws, Total asserts, create a “scheme that mimics the results of an illegal price-fixing conspiracy while enabling the cartel’s participants to avoid any explicit ‘agreement.’  Yet no state actor supervises the ensuing prices to ensure their reasonableness.”  This “unsupervised private price-fixing” violates the Sherman Act, Total insists.  Total cites one of the judges who dissented from 2d Circuit’s decision not to rehear the case.  CT laws, he wrote, “allow de facto state-sanctioned cartels” to inflict “artificially high prices on consumers and retailers across all three states in our Circuit.”    

Notable too: CT and its supporters (including state wholesalers and Total’s retail competitors), “raised no 21^st Amendment defense” of the laws.  That’s “understandable,” because, citing another dissenting judge in post-and-hold litigation: “Where state legislation merely legislates a cartel of liquor dealers and plays no further role in determining prices and output, its self-evident purpose is not to protect the public from the evils of the demon rum, but to preserve the high standard of living of those who sell it.”  Then too, in a nod to last yr’s US Sup Ct decision tossing Tennessee’s residency requirement, Total cites an FTC report on post-and-hold laws that concluded “they undermine price competition and ‘generate monopoly rents’ but do not discernibly ‘generate any offsetting benefits in the form of reduced social harms’ such as ‘alcohol related accidents and underage drinking.’”   Indeed, lead counsel for Total on yesterday’s brief is same atty, Carter Phillips, who argued Total’s victory in Sup Ct last yr.   He’s very familiar with Sup Ct’s clear position that state alc bev laws need to have public health/safety component to maintain protectionist measures.

Nov NBWA purchasers’ index dropped to 47, showed NBWA economist Lester Jones at Brewbound yesterday.  Recall, anything below 50 signals contracting segment, above 50 an expanding segment.  Kinda dovetails with anecdotal reports that Nov mostly not so hot.  Imports still expanding, but just at 53, compared to 69 in Nov last yr.  This yr, FMBs at 69.  That’s lower than in last few mos, but still pretty strong and well-above 63 last yr.   Biggest drop: cider fell from 58 last Nov to 32 this Nov.  That’s almost as low as premium regular at 29.  Interestingly, several declining segments, premium light and regular, plus below premium, did better this Nov than last in this index, tho still well below 50 and continuing to contract.  Premium light for example jumped from 31 to 37.  

Per capita alcohol consumption has stubbornly stayed the same in recent decades, Lester showed again, even while the number of suppliers and label approvals exploded since 2010. And there are lots more retailers too.  There were 27,459 permitted alcohol suppliers, who got 195,000 labels approved and sold to 645,000 retail outlets in 2018, Lester showed.  Back in 2010, there were 11,106 permitted suppliers; they got 102,500 labels approved.  So suppliers more than doubled and annual label approvals almost doubled.  The number of brewer permits quintupled from 2,000 to 10,000 (far more permits than brewers that actually opened their doors).  That’s in just 8 years.

Number of retailers up more modestly, from 536K to 645K.   But still, that’s over 100,000 more retailers, selling same amount of alc bevs in all (at least at higher prices).   And interestingly, number of retail outlets started to decline in 2019, Lester showed, tying it to increased regulation.  Just prior Karl Strauss co-founder Chris Cramer had talked about all the challenges of today’s CA retail environment, including $15 minimum wage.  

Import trend gained steam in Oct.  Shipments +263K bbls, +9.3%, reports Beer Inst economist Michael Uhrich based on data from Commerce Dept.  Double-digit increase in shipments from Mexico (+14%) drove gain, along with solid numbers from Belgium and Italy, modest bump from Canada.  For 10 mos, imports +774K bbls, 2.5%.  Mexican shipments up 945K bbls, 4.4%.  Dutch shipments still down 174K bbls, -4.6% yr-to-date, despite additional 110K bbls from no-alcs.  Belgian-German combo +86K bbls, 3.6%.  Canadian shipments off 5%, Irish shipments -2%.  Italian biz up near 60%. 

Meanwhile, TTB has added some bbls in latest reports of domestic brewers’ taxpaid shipments, brightening overall shipments picture slightly.  With revisions and import gain, Jan-Oct total US shipments off 1.9 mil bbls, -1.1%.  Nov taxpaid comp very easy, -6% last yr, while Dec was +2.2%.  Imports off slightly Nov-Dec last yr.

Turns out, Kings & Convicts mystery investor with largest stake that helped ’em acquire Ballast Point from Constellation is chairman of The Wine Group (TWG), Richard Mahoney, reported Chi Trib. The Wine Group was formed in the 80s to buy Franzia, became 3rd largest US wine company in the 90s, and also owns brands like Cupcake, flipflop, Benziger, and 7 Deadly among several others, according to its website. So, Richard Mahoney will be the largest individual stakeholder in Ballast Point once deal closes. “He’s backed me and I’ve made him money,” K&C CEO Brendan Watters told paper. Brendan also didn’t rule out possibility of more acquisitions in the future: “never say never.” Stay tuned.

Nielsen execs Danelle Kosmal and Caitlyn Battaglia provided some new numbers and insights into hard seltzer phenom in presentation to Brewbound Live today.  Among many impressive stats: Seltzers projected to hit $1.5 bil in off-premise sales this yr with just over 200 items on the shelves.  That compares to projected $980 mil in Sauvignon Blanc sales with 1600 items and craft IPAs with same $1.5 bil in sales, but spread over 3600 items.  Tho dollar share off a bit vs summer high of 5.4, seltzers still at 5 share for 4 wks thru Nov 2, up from 3.4 share for 52 wks and compared to just 1.1 share same time last yr. 

Several key signs point to seltzers’ broadening appeal which bodes well for segment’s sustainability.  July 4, Labor Day and summer sales still very important, but each contributed smaller share of biz this yr than last yr, as “remaining weeks” since summer contributed higher share this yr.  So, seltzer clearly “finding success” outside summer, Danelle noted.  Then too, social media “conversations” about seltzer really jumping and at times outpaced overall alc bev conversations this summer.  And while social media convos in 2018 centered around health and wellness issues (low carbs, low-cal, keto diet), this summer that expanded to social gatherings and events, with less focus on health and wellness.  Like other successful alt alc bevs – canned wine, boxed wine, canned cocktails – seltzers tapping new occasions/events. 

Seltzer Drinkers Really Engaged   Who’s drinking seltzer?  “Engaged drinkers.”  How engaged are they?  Seltzer buyers spend avg of $477/yr on alc bevs, up 10% this yr.  That’s $219 more than avg household that buys alc bevs.  Then too, 40% of seltzer buyers are repeat purchasers vs 35% for rosé, 28% for canned wine.  These measures suggest significant chunk of seltzer is incremental to other alc bev buys, not a substitute.  When drinkers do “swap out,” Danelle not specific: “a little bit from beer, some from wine and some from spirits.”  As noted by Mike’s execs recently, gender split now 50-50 for seltzer.  And notable shift this summer in who talks about seltzer on social media, from mostly women in 2018 to much more diverse crowd this yr.  May be counterintuitive, but craft beer buyers twice as likely to purchase seltzer vs avg drinker.  And profile is similar: higher income/education, white millennials.

Tho seltzer born in East, now indexes highest in West (111 vs total US share), with sales +254%, +$160 mil for 52 wks thru Oct 5.  Similar +252% trend in Midwest (+$109 mil) with index slightly lower at 106.  In Northeast, $$ +$103 mil, +131% and index of 104.  Lotsa oppy still in South, where $$ jumped $209 mil, +242%, but index still just 72.  White Claw Assorted dominates top brands in every region, but smaller players “breaking through.”  Press Assorted is #2 in West, Vive #2 and #3 in Midwest, Rec Water #2 in South.  Truly and Bon & Viv brands in top 5 in most regions too.  What’s a winner look like?  Key attributes: 1) “flavors on flavors,” with cherry, mango and grapefruit being top 3, raspberry comin’ on strong; 2) variety packs are 2/3 of $$; 3) 12 packs are 70 share of $$; 4) slim cans dominate with 90 share of seltzer $$.  Other beyond beers puttin’ up big growth numbers these days, albeit on much smaller bases, include hard kombucha (+73.5%), wine cocktails (+43.5%), beer cocktails, i.e. Agua Fresca, (+207.4%) and canned wine (+75.8%), spirits cocktails (+75%).