AB keeps comin’ with new products.  It will launch Stella Artois Midnight Lager on Nov 4, “a limited release premium dark lager for the holiday season” with “bold notes of chocolate and caramel, and a cold refreshing finish.”  Stella Artois volume flat (+0.3%) in Nielsen all-outlet yr-to-date, including 0.8% drop last 4 weeks.  In Dec, AB will intro Budweiser Reserve Variety pack with regular Bud, Bud Copper Lager and Bud Amber Lager.  Bud franchise down 7% in Nielsen. 

Meanwhile, AB has launched Hoegaarden NA line called Soft Brew in Rochester and 1 other mkt, according to Rochester Biz Jnl.   And in Jul, AB launched 3 beers “that aim to reach Latin American consumers” in NY and CA, wrote VinePair: Golden Road’s K-38 Clara (“clear”) and K-38 Obscura (“dark”) plus Presidente collab with Blue Point called Una Fria.  “Almost 20 percent of the US is comprised of Latinx people.  This is a huge opportunity,” said Mika Michaelis, prexy of AB’s Brewers’ Collective.   

This yr’s winners all accelerated in Nielsen all-outlet scans for 4 wks thru Aug 10, while others mostly decelerated.  Constellation, Boston, Mike’s and Diageo picked up their respective paces (vs yr-to-date trends).  AB, HUSA and Pabst slowed further.  MC trend for 4 wks a point better than YTD, but still off 2.4%.  As seltzermania continued (FMB $$ +44% for 4 wks, While Claw franchise +275%, Truly +173%) look at some notable share “milestones.”  Mike’s hit 5 share of $$ for 4 wks, +2.2.  Boston picked up 0.7 share to 3.8.  And Constellation +0.9 to 14.5, with no seltzer play.  Meanwhile, AB slipped to 39 share of $$, -2.2.  MC fell below 20 to 19.9 (-1.2).  And Mike’s almost a full point ahead of HUSA $$ share (4.1%) and Boston just 0.3 behind HUSA in $$ share.  Pabst just 1.2 share of $$ in Nielsen scans, same as FIFCO.  Diageo 0.4 ahead of both for 4 wks, as it revved to near 20% growth in most recent period, added 0.2 share to 1.6.  Brand trends all familiar, with 7 of top 10 growers being seltzers or flavored. How much do seltzers/flavors matter?  With FMBs, total volume +2 mil cases for 4 wks.  Without ’em, down 1.5 mil cases.

Boston Beer’s stock continues up, up, up to new all-time highs.  Now at $437 per share, up $202, 86% yr-to-date, including another $40 per share, 10% in last week alone.  Its stock mkt capitalization is now nearly $5.3 bil.  Amazingly, SAM stock has more than tripled in last 2+ yrs.   Boston Beer’s stock climb directly attributable to turnaround in sales results.  And its sales still picking up steam.  “Boston Beer growth accelerating with roughly 40% growth in the last month and nearly 60% growth on a 2-year stacked basis,” wrote Consumer Edge’s Brett Cooper yesterday, citing IRI data thru Aug 11.  Boston Beer also entered M&A arena with deal for Dogfish Head, which provided pop earlier in yr.  But Boston Beer stock already trading at lofty multiples, so its continued ascent probably related to more than its sales momentum and m&a.  Could it be that investors see Boston as only public company play on explosive growth of seltzers?

Meanwhile, one big beneficiary of Boston Beer’s recent climb is founder/chairman Jim Koch (others on smaller scale would be Dogfish Head’s Sam and Mariah Calagione since much of their payment in stock over time).  A July Forbes mag article on American manufacturers led with Jim and pegged his net worth at $1.4 bil then.  Same article lists Dick Yuengling at $1.3 billion. Other bev manufacturing billionaires listed include Arizona Bev’s Don Vultaggio at $3.4 bil and GT Dave of GT’s Living Foods Kombucha at $1 bil.    

In wake of Amazon seeking to open small retail store in San Fran so that it can deliver alc bevs to consumers there thru its Prime Now service (see Aug 13 Express), wine-searcher.com did a little investigative reporting to see what Amazon was doing in Los Angeles, where it ostensibly did the same thing.  One little problem: when reporter went to Amazon’s warehouse location in LA, he found “there is no liquor store there,” as he reported yesterday.  And today, wine-searcher sez that Calif ABC has opened investigation as result.  “The cat is out of the bag,” ABC agent told wine-searcher, “and I imagine that the people at Amazon are scrambling right now, saying ‘We don’t want the ABC on us.’”  There could be “plausible explanation,” he added, but there could also be “more egregious violations,” especially if Amazon filed false info with state to get license.  In any case, Amazon would not be first biz to test limits of state alc bev laws to launch new biz model.  But Calif ABC apparently lookin’ into situation.

MC debuted newest ads for Blue Moon’s “Reach for the Moon” campaign, as its sales trend continues to improve into Q3.  New spots, Routine, Eclipse and Surface, pose new question: “what if once in a blue moon didn’t have to be only once in a blue moon?” Co lookin’ to market Blue Moon to “today’s older millennial drinkers” as more of an “aspirational” brand, per release. Ads “will be featured across 25 different networks and 100 different programs in cable and broadcast primetime,” including So You Think You Can Dance and Master Chef on FOX, SportsCenter and 30 for 30 on ESPN, Thursday night and Monday night NFL programming, plus YouTube, Hulu, ESPN.com, social and more. Indeed, increased TV weight year-round is part of MC’s plan to double Blue Moon’s media spend this yr, with ultimate goal to surpass Bud Light on-prem as #1 tap handle in the country, VP of natl craft and innovation brands Bryan Ferschinger stated at mtg (see Mar 14 issue). Tho gotta note, MC Blue Moon ads markedly different than what co initially showed its distribs at meeting last Mar. Following unfavorable reactions from distribs, MC went back to the drawing board, and came back with ads more in keeping with orginal brand cues, again reflecting influence of new CMO Michelle St. Jacques.

Flagship Belgian White continues to gain momentum after coming off its best qtr since Q4 2017 in Q2 2019 (see Aug 1). July volume was “positive,” with “significant trend improvements in the off-premise,” as brand grew double-digits in key retailers like Walmart, Albertsons and Ahold Delhaize, per release. Volume grew 4.7% in latest 4 wks Nielsen data, and has “clawed back” to nearly flat YTD, per MC Behind the Beer blog. Tho improvements are comin’ against backdrop of volume down nearly 6% in 2018 Nielsen data. While Blue Moon has 73% brand awareness, only 24% are “regular drinkers of the brand,” sez MC. These ads aim to “find ways to breakthrough and become a part of the regular routine for more drinkers; not only on-premise, but in off-premise occasions as well.”

Beer volume (including FMBs) up 0.6% for 12 weeks thru Aug 10 in Nielsen xAOC data published this morning by Wells Fargo’s Bonnie Herzog.  But avg beer prices up a healthy 3.4% for same period as trade up accelerated.  Meanwhile, domestic beer volume down 3.2% same period (with avg prices up 2.2%).  That’s same as its 52-week trend. So growth in beer biz mostly ain’t coming from beer per se, it’s coming from FMBs, principally seltzers. But wine biz volume trends no great shakes these days either.  It’s just flat in scans last 12 weeks, tho wine avg prices also up 3%. Total distilled spirits volume still up 3.7% for 12 weeks, an acceleration from 3.3% for 52 weeks.  So if seltzers are taking big chunk of volume from spirits, it ain’t evident in scan data so far.  Not only that, but spirits avg prices up 1.9% for 12 weeks.  Spirits $$ sales up a robust 5.7% in period.

FMB volume up 33.6% for 12 weeks.  Mike’s up 66% and Boston Beer up 60% same period. They are at 39 and 16 share respectively of broader FMB segment.  Mike’s Hard slipped into slight decline last 12 weeks.  Down 1.8%.  Twisted slowed to 6% growth same period in this Nielsen data set.

Just like in beer biz, top 2 wine and spirits cos are losing share in latest period, tho each far less concentrated than beer. In wine, Gallo is #1 with 19.5 share, while Constellation #2 with 14.3 for last 12 weeks.  But while wine flat, Gallo and Constellation wine sales are each down 5%.  And in distilled spirits, Diageo has about 19 share, while Pernod Ricard at 9.6 share.  Each is growing less than segment, 0.8% for Diageo and 2.6% for Pernod Ricard. But they are still up. 

Taboo of beer sales at College football games began fading in recent years and even more so of late. Why’s that? First, beer sales brought in money and actually helped reduce drinking related problems at West Virginia Univ, one of first major Div 1 programs to lift their ban. Experience at WV and other schools, “softened opposition” among Univ presidents and boards.  Today, “what has driven more schools to embrace wider alcohol sales is the growing sight of empty seats on Saturdays,” wrote Wall Street Journal.  “Colleges and alcohol companies are increasingly becoming allies in trying to maintain interest in two products whose popularity is falling: football tickets and beer,” noted WSJ, as attendance at Div 1 Football Bowl Subconference schools has dropped 5 straight years and is “down 11% from a decade ago.”  List of big college programs now open to beer sales growing fast and recently OK’d at Univ of Illinois, TCU in Texas, LSU and Missouri. Univ of Arkansas is latest big SEC program to embrace beer sales, and it hopes that helps lift attendance which has dipped 14% over last 2 seasons. “I don’t know that someone is going to make a decision to come to a game just because alcohol is being served, but we just can’t take that chance anymore,” said athletic director Hunter Yurachek. Univ of Illinois hopes beer sales will “reverse a two-year decline in attendnence,” and lift it from lowest avg attendance in Big Ten, per AP.  As WSJ noted, “winning teams, marque opponents and modernized stadiums can all help,” drive attendance. “But success is fickle, the quality of the opponent varies and facility upgrades can be costly. Selling alcohol is relatively simple and actually makes money.” 

Calif 3-tier law was upheld as suit brought by Fla-based wine importer looking to directly ship to retailers in Calif without having physical presence was ultimately dismissed last week. The lawsuit, Orion Wine Imports, LLC vs Jacob Appelsmith, Director of the Department of Alcohol Beverage Control, alleged that Calif law bars the Fla biz and its owner from obtaining license to sell to Calif retailers, forcing it to ship thru in-state distribs, violating both dormant Commerce Clause and Privileges and Immunities Clause. Yet judge dismissed these claims on Aug 15, agreeing with the state that “plaintiffs have not clearly advanced a coherent claim” regarding dorment Commerce Clause and “lack standing to bring their Privileges and Immunities claim.”

All importers are required to deliver wine to a physical presence within Calif, and any out-of-state biz “may apply for and obtain either or both an importer’s and/or wholesaler’s ‘license’ in California,” judge wrote (our emphasis). Another key point “misstated” by plaintiffs regarded belief that Orion and other out-of-state entities could only obtain in-state licenses “by opening a permanent business, not by leasing warehouse space.” Plaintiffs expressed “confusion” regarding these arguments at hearing vs what was written in Second Amended Complaint, and “barebones pleading exposes the absence of a full understanding of the regulatory structure and where there is a possibility of obtaining licenses after leasing public warehouse space,” judge added. Then too, claims under Privileges and Immunities Clause were dismissed since Supreme Ct has upheld that it “does not apply to corporations” and could not prove that biz owner Peter Creighton’s “injury” was separate from his corporation’s injury. (Under the clause, “[t]he Citizens of each State [are] entitled to all Privilges and Immunities of Citizens in the several states.”) And notably, judge also dismissed plaintiffs’ “Notice of Relevant Decision by the Supreme Court,” referencing Tenn Wine & Spirits Retailers Assn vs Thomas decision, stating “that decision does not affect the court’s decision here.” (Tho judge didn’t rule out Tenn’s potential relevancy in future decisions.)

Net-net, this is “an incredibly important step…particularly in light of the multiple legal challenges to the three-tier system pending across the country,” Calif Beer and Bev Distribs prexy Victoria Horton wrote to members. Orion represented by Tanford and Epstein, attys “who have long advocated for the dismantling of the three tier system in favor of direct shipping of alcoholic beverages,” Victoria reminded. This suit is “one of several cases filled across the federal courts as part of a coordinated nationwide attack on the three-tier system,” she added. Orion has 21 days from Aug 15 decision to file an amended complaint.

Mass-based AB distrib, Quality Bev, will acquire Williams Dist pending supplier approval, making Quality Bev “the single largest stand-alone beer distributor in Massachusetts” and “the state’s leading supplier” of ABI products, co announced. Deal includes distribution rights thruout western MA, plus facility in Chicopee, MA. Quality and Williams already aligned on several supplier partners aside from AB, including Constellation, Yuengling, Wormtown, Sierra, Shiner, SweetWater, Heavy Seas, Magic Hat, Switchback, Stony Creek and Grey Sail, according to cos’ websites. Williams also has Harpoon and New Belgium among others.

Williams Dist has been owned and run by Sadowsky family since founded in 1950. “This was a difficult decision, but one we think is best as the beverage distribution business continues to evolve and change,” stated Williams prexy Scott Sadowsky. Gotta note, principal supplier AB has lost over 1/4 of its volume in MA since 2008, down from 28.3 mil cases to 20.5 mil cases statewide. Constellation’s continued growth not nearly enuf to make up the difference on its own statewide. Plus some of Williams’ other partners are comin’ off tuffer yrs lately. Used to be if you had Constellation and a well-rounded craft book, all was relatively well for distribs generally. Now perhaps that’s shifted to White Claw and Truly hard seltzers (both principally MC network brands) as main difference makers to offset mainstream brand declines.

Meanwhile, “Quality Beverage’s corporate strategy remains focused on increasing operational efficiencies, maintaining market share and aligning with trusted partners who share our work ethic within contiguous territories,” prexy and CEO of Quality Bev Conrad Wetterau stated. Recall, Quality Bev acquired remaining 40% of Consolidated Bevs in Auburn, MA, back in Sep 2013, then surpassing 8 mil cases and representing nearly 30% of AB biz in MA. So Wetterau doubling down on beer distribution biz after selling off big chunk of its sizable food distribution biz, Golden State Foods, to Reyes/Martin Brower late last yr.

Despite slower start than co initially planned, Crook & Marker is doubling down on ambitions to disrupt FMB/hard seltzer space, officially launching new production facility it’s calling “T-Rex.” Facility has high-speed canning line that can crank 1,200 cans per minute giving Crook & Marker capacity to sell “millions of cases monthly,” per release. “This significant investment in our production capabilities was made to ensure we can meet the most aggressive consumer demand with no interruptions in supply and enable growth for our distribution and retail partners for years to come,” said chief sales officer Ray Faust. “This has been an extraordinary summer for the better-for-you category and there is still tremendous runway for growth,” including “strong demand for Crook & Marker,” he added.

Crook & Marker sold just 42K cases in IRI multi-outlet + convenience thru Jun 16.  Got 0.2 share of FMBs.  A number of distribs talked of slow start for Crook & Marker, tho co talks of pick up lately.  It’s a new product/brand with relatively low awareness, unique package size and high price point within FMB space. Crook & Marker already got slick packaging redesign with all-black background mixed with white and vibrant blue/orange and red/purple, lookin’ to add extra pop on the shelves. But as co quickly pushed for natl distribution this yr with aim to disrupt FMB/seltzer space, its launch overshadowed by continued explosive hard seltzer growth primarily from White Claw and Truly. And so far, Crook & Marker a long ways off from becoming “a bigger opportunity” than Bai, as founder Ben Weiss suggested late last year. But it’s still pushing forward, as new production facility shows.