Long, interesting profile of FIFCO CEO Ramon Mendiola appeared in Buffalo News last week. Headline: “A ‘better way of living’ through beer? This CEO thinks so.”  It’s mostly about Ramon’s embrace of triple bottom line philosophy, championed by British biz researcher John Elkington in 90s.  Triple bottom line measures success socially and environmentally as well as financially. “I started it out of fear,” Ramon tells Buffalo News, not just to do-good, but because “I was afraid initially of more regulations, more laws, more taxation, especially related to the alcohol business.  I saw what happened in tobacco and I was very sensitive.” Under triple bottom line, FIFCO has hit its audacious goals: “generating zero solid waste by 2011, be water neutral by 2012 and carbon neutral by the end of 2017.”  And the financial results? “The performance of the company has been fantastic for us.  I think by doing the right things, by engaging with your employees in a different way, by taking care of your footprints, your performance will come.” 

Unstated in article, but here in US, NAB volume declined an estimated 105,000 bbls, 4% last yr and it lost 400K bbls, 15% last 5 yrs.  And NAB down 4-5% again so far this yr in both Nielsen and IRI scan data.  NAB financial results not public. Recall, it spent $40 mil modernizing Genny brewery in Rochester. Also became much more prominent in community.  While Seagram’s coolers continue to grow, and Genny basically held, Labatt brands have been hurtin’.   NAB already changed CEO, head of sales, head brewmaster so far this yr. It also recently dissolved its NAB board here in US, as FIFCO already has 2 boards in Costa Rica, 1 with 25% owner Heineken.  At the end of Buffalo News article,  Ramon again reasserts company objective of doubling by 2020. 

Beer biz doldrums very evident in latest scan data.  Total volume down 1.3%, $$ sales flat yr-to-date thru Mar 10 in Nielsen all outlet.  That’s about a half point worse than last year.  Not only is volume down slightly, it’s harder to get pricing for big chunk of industry volume.  In all, avg prices still up 30 cents a case, 1.3% last 4 weeks.  But that’s only because trading up continues.  Above premium volume up 4.5% YTD.  Imports up 4.3%, craft up just 1.5%, superpremiums up 8.5%, FMBs up 5%. Meanwhile, premium beers down 5%, economy beers down 2%. Almost no price realization for these segments that are 2/3 of biz. Avg premium case price up 0.3%, avg economy price down 0.5%. Trends can still change, but in yrs past, scan trends 2.5 months in don’t change a ton.  That’s not such good news. Currently, trends mostly very similar to last yr, but somewhat softer. 

AB volume down 3.1%, MillerCoors down 2.8% YTD.  But top 2 barely getting any price.  In fact, MC avg prices down 4 cents a case, 0.2%, while AB’s avg price up just 9 cents, 0.4% for 4 wks.  AB $$ sales down 2.7%, MC down 2.9% YTD. AB and MC again losing almost 2 share of $$ between ’em. AB down 1.2 share of $$, MC down 0.7 share. Biggest share gainer, natch: Constellation.  Constellation volume up 11%, $$ up 13%. It’s gaining 1.3 share of $$ YTD. What’s more, avg Constellation prices up 67 cents, 2% per case for 4 wks. Next biggest gainer: Mike’s growing at a 20% clip.  Mike’s gained 0.3 share of $$ YTD. Biggest change: Boston Beer.  Returned to healthy growth in scan, up double digits last 4 weeks. Up near 8% YTD led by Twisted Tea, and new brands like Sam 76, Angry Orchard Rosé and Truly. Up 0.2 share of $$. Constellation, Mike’s and Boston gained 1.8 share of $$ YTD.

Megabrands still struggling mightily.  Each of Bud Light, Coors Light and Bud volume down 5-6% YTD.  Miller Lite down 2%. Those 4 brands still 38.1 share of cases, but only 34.4 share of $$. Down 1.8 share of $$, 1.5 share of cases. Hottest brands in industry picked up vast majority of that slack (and have healthy pricing too). Michelob Ultra volume up 17.5%, $$ up 19.5%.  Gained 0.8 share of $$.  Avg price up 2%. Modelo Especial volume up 17.7% and $$ up 20.8%.  Avg price up 89 cents, 3% per case.  It gained 0.7 share of $$.

Some other brand/operational notes: MC went to one ordering system in Golden. That created all kinds of issues as logistics couldn’t talk to operations, beer sat in Golden warehouses.  Distribs couldn’t get beer.  Some key brands only made in Golden went into reverse.  Coors Banquet down 4% for 4 wks, 2% YTD. Recall, it’s up 11 yrs in a row.  Blue Moon Belgian White down 3.6% for 4 wks, -1.5% YTD. Then too, things got tougher for most big imports except Modelo Especial. Stella slowed markedly, -1.4% for 4 wks; +5% YTD.  Heineken down 2.7%. Dos Lager down 5%. Even Corona up just 2% YTD and flat for 4 wks.  Total Heineken USA down 7.5% for 4 wks, 5% YTD. Corona Light down 2% YTD, but Familiar and Premier are top-10 growth brands in last 4 wks, gaining 0.4 share of $$ between ’em.       

On-premise trends in 2017 about same as in 2016, reports Nielsen CGA.  Volume dipped 1.9% while $$ sales down 1.1% compared to -2% and -0.7% respectively in 2016.  Nielsen projects 467 mil case-equivalents sold on premise.  That’s about 34 mil bbls, for a little over 16 share of total volume.  Importantly, Nielsen does not include projections for taproom sales, an increasingly important part of craft biz, and near 3 mil bbls in 2017.  That’s over 10% of craft volume and 8-9% of on-premise volume.  Given rapid growth in taproom biz, on premise closer to even for the year and likely out-performed off premise all in.   

Craft volume slowed to +0.7% in Nielsen’s on-premise universe last yr and $$ sales up just 1.2%.  But craft still picked up 0.8 share of on-premise $$ to 32.5.  That’s just below domestic premium’s 33.6 share for the yr, down 5-6% and losing 1.6 share of $$.  Import trends slightly better than craft; imports hit 19 share of volume, 21 share of $$.  So craft + import had 53.5 share of $$.  No other segments over 4 share of volume or $$.  Superpremiums at 3.9 share of volume, subpremiums just 3.3. 

AB and MC shed another share of on-premise volume and $$ between ’em.  Top 2 down to 45.6 share of $$.  AB had 28.2 share of volume, MC 20.8, slipping below half of volume collectively.  Look at difference off premise.  Top 2 had 74.1 share of off-premise volume last yr, according to Nielsen; craft collectively just 7.3 share there.  Back to on premise: Constellation picked up 0.6-0.7 share, grabbing 8.2 share of volume, 9.2 share of $$.  No other top supplier moved the needle more than 0.1 in either direction on premise. Top 4 brand trends on premise even softer than they were off premise.  Bud Light -7.6% and gave up full share of $$ to below 13.  (Bud Light had 16.3 share of off-premise $$ last yr.)  Miller Lite and Coors Light volumes down 4-4.5%.  Bud down 6.2%.  Corona eked out tiny 0.1% gain on premise.  Mich Ultra +7.2%, Modelo Especial jumped 22.3%.  Blue Moon Belgian White had #7 spot among on-premise brands, tho volume/$$ dipped slightly.  Yuengling off 4%.  Collectively, top 10 brands -3.2%, remaining brands off 0.6% for yr.

Tho CPI for beer on premise +2.5% for the year, Nielsen tracked just a 0.8% increase with avg 12-oz serving up just 3 cents to $3.78.  Then again, given breadth of on-premise establishments, an “average” price may not mean much.  No single segment, supplier or brand tracked by Nielsen had more than a nickel change in avg 12-oz serving price.  Among top-10 brands, avg serving prices ranged from $3.24 for Yuenglling Lager to approx $3.50 for Bud and Miller Lite to $4.31 for Corona, slightly above Stella Artois.

2017 state shipments numbers illustrate even more strikingly that California like no other state when it comes to beer.  That’s principally because of the size, strength and rapid growth of Constellation there. In 2017, Constellation, jumped 560,000 bbls, 13% to 4.8 mil bbls in CA.  It gained 2.5 share to 20.7.  Constellation passed MillerCoors with a bullet in nation’s largest mkt as MC fell 222K bbls, 5% to 4.3 mil bbls. Constellation got 1/3 of its growth in CA, where it does about 25% of its biz.  Meanwhile, AB also dropped another 307,000 bbls, 3.7%. Down 1.1 share to 31.9.  MC lost 0.9 share to 18.3. So AB and MC together down to 50.2 share. Constellation gains coming right out of AB and MC hide, but also HUSA’s.  HUSA down more steeply than either AB or MC in CA; down 127,000 bbls, 7.9%.  It lost a half share.  Meanwhile, after yrs of explosive growth, All Others down slightly in 2017, which tracks with scan data that showed craft down in CA last yr.  

 Five-year view even more revealing.  AB dropped 1.3 mil bbls in CA last 5 yrs, while MC lost nearly 1 mil bbls.  Meanwhile, Constellation gained 1.9 mil bbls.  Again, almost a one-to-one trade.  In last 5 yrs, AB lost 6.8 share in CA, and MC lost 4.9 share, Constellation gained 7.9 share. Until last yr, All Others (mainly CA craft) had also gained big volume and share.  In fact, between 2012-2016, All Others jumped 1.4 mil bbls and gained 5.4 share.  Last yr, All Others held share at 21.6.  

Big news in letter from Bell’s ceo Laura Bell to distribs last night: “This is one of the hardest emails I have had to write during my time here at Bell’s…. Effective May 18^th, 2018, I will be stepping away from my role as CEO of Bell’s. Day to day operations will be overseen by Larry Bell in addition to senior leadership, of whom I have the utmost confidence.”  WOW!  This is a stunning announcement right on eve of Craft Brewers Conference.

Bell’s by far one of the most successful independent craft brewers. It’s in top 10, and unlike so many of the largest indie craft, it grew double digits last year to 465,000 bbls.  And it’s growing again this yr.  Bell’s is also one of the only large indie craft that had a plan for generational succession.  Founder Larry Bell had gradually passed on day-to-day responsibility to his daughter Laura in recent yrs.  Laura worked her way up, becoming ceo only a little more than a yr ago.  Making the announcement even more baffling, Bell’s just had its natl sales conference with distribs a couple of weeks ago.  As ceo, Laura led that meeting.

“We are not selling and will remain a 100% independently owned family business,” Laura assures in e-mail to distribs.  “I will remain on the Board of Directors” and “will still have a role when it comes to making big decisions for this company.”  Almost nothing said about why Laura is leaving in letter.  She notes she worked at Bell’s starting right after college, stating: “I loved it, and love Bell’s.”  But she adds: “I have not taken the opportunity to explore my other passions and interests.”   

At presstime, INSIGHTS talked to Bell’s founder Larry Bell. In brief conversation, he said “number one, I love my daughter and want her to be happy in all things in life…. All she’s ever done” since she got out of college “is work for the brewery.” Now she’ll take some time to “see life outside of the brewery. We’ll see where this adventure takes her.”  But Laura at 32, is still part of the brewery, still a shareholder, still a member of the board, Larry reminds. “We’ll miss her in her current role,” he says. Larry will look to fill that position in some form, perhaps with an exec veep as he is still president of the brewery.  Laura would be welcome back too, even as ceo, Larry made clear.  Meanwhile, family all going on a trip to Kentucky Derby next month, Larry said.  And Bell’s is in “a really solid spot.” It’s up about 3% so far this yr in shipments (more in depletions) going against rollout numbers in Texas last year, with expansion to several more states as 2018 goes along. 

“Without any admission of fault or wrongdoing, Mission Beverage Company and Pabst Brewing Company have entered into a confidential settlement of the civil action styled Mission Beverage Company v. Pabst Brewing Company.”  So ends years-long battle over Pabst’s 2015 termination of Calif distrib Mission.  No detail provided.  Recall, Pabst terminated Mission as successor brewer after ownership change.  Mission sued for illegal termination.  After arbitration, distribs Classic and Beauchamp paid for brands, but suit vs Pabst stayed alive.  And 2 Calif courts ruled termination illegal.  Nothing in key Calif statute “expressly grants the successor beer manufacturer the further right to cancel distribution rights regardless of its contractual obligations with the existing distributor,” ruled Calif Court of Appeals.  Both courts separated arbitration procedure set up by Calif law to assure that replacement distrib(s) pay terminated distrib fair mkt value from the issue of whether a brewer breached a contract when it terminated.  (A similar issue being fought out in WA and MD courts between Pabst and several distribs in those states.) 

 In 60 days, Corona Premier got 3/4 of the distribution of Corona Extra in A&B accounts, Constellation Brands Beer Division prexy Paul Hetterich told Beverage Forum.  That level of distribution that fast is a “new thing for us to garner.”  After test mkts went well last yr, Constellation decided to launch Premier nationally and while it’s “going very well,” it’s still “early days,” said Paul, noting reorder rates and velocity still not known. But it “looks good at the moment.”  How good? Corona Premier got 0.3 share of $$ in Nielsen all outlet for last 4 weeks thru Apr 14.  And Premier $$ sales up $7.7 mil,  as it was virtually all incremental. Believe it or not, Premier got about half as much  growth as Modelo Especial, up $15.5 mil in Nielsen.

Big news in letter from Bell’s ceo Laura Bell to distribs last night: “This is one of the hardest emails I have had to write during my time here at Bell’s…. Effective May 18^th, 2018, I will be stepping away from my role as CEO of Bell’s. Day to day operations will be overseen by Larry Bell in addition to senior leadership, of whom I have the utmost confidence.”  WOW!  This is a stunning announcement right on eve of Craft Brewers Conference.

 Bell’s by far one of the most successful independent craft brewers. It’s in top 10, and unlike so many of the largest indie craft, it grew double digits last year to 465,000 bbls.  And it’s growing again this yr.  Bell’s is also one of the only large indie craft that had a plan for generational succession.  Founder Larry Bell had gradually passed on day-to-day responsibility to his daughter Laura in recent yrs.  Laura worked her way up, becoming ceo only a little more than a yr ago.  Making the announcement even more baffling, Bell’s just had its natl sales conference with distribs a couple of weeks ago.  As ceo, Laura led that meeting.

 “We are not selling and will remain a 100% independently owned family business,” Laura assures in e-mail to distribs.  “I will remain on the Board of Directors” and “will still have a role when it comes to making big decisions for this company.”  Almost nothing said about why Laura is leaving in letter.  She notes she worked at Bell’s starting right after college, stating: “I loved it, and love Bell’s.”  But she adds: “I have not taken the opportunity to explore my other passions and interests.”   

 At presstime, INSIGHTS talked to Bell’s founder Larry Bell. In brief conversation, he said “number one, I love my daughter and want her to be happy in all things in life…. All she’s ever done” since she got out of college “is work for the brewery.” Now she’ll take some time to “see life outside of the brewery. We’ll see where this adventure takes her.”  But Laura at 32, is still part of the brewery, still a shareholder, still a member of the board, Larry reminds. “We’ll miss her in her current role,” he says. Larry will look to fill that position in some form, perhaps with an exec veep as he is still president of the brewery.  Laura would be welcome back too, even as ceo, Larry made clear.  Meanwhile, family all going on a trip to Kentucky Derby next month, Larry said.  And Bell’s is in “a really solid spot.” It’s up about 3% so far this yr in shipments (more in depletions) going against rollout numbers in Texas last year, with expansion to several more states as 2018 goes along. 

In same letter (see above), MC region veep Brian Erhardt pointed to 82,000 Sol placements off-premise in last 13 weeks and 9,000 more on-premise.  And that’s presumably just in his region.  Sol volume up 25% last 4 weeks thru Apr 14 nationwide in Nielsen all outlet.  Down 5% yr-to-date.  Recall, MC raised Sol pricing lots.  So Sol $$ sales up 43% for 4 weeks and now up 8% YTD.  

MillerCoors will not be out of the woods on its supply chain issues in Golden by end of Apr as originally expected, INSIGHTS now hears.  Situation getting better but full fix is weeks away, INSIGHTS understands.  On top of it, for totally different reasons, MC having trouble getting distribs sufficient supply of its sole Mexican import Sol.  Recall, this is intended as one of biggest MC product launches in yrs.   But because of issues trucking beer from Mexico, MC struggling to fill orders for some big planned promos.  When it rains it pours. 

“We are seeing continued improvement at the Golden Brewery,” wrote region veep Brian Erhardt to distribs on Monday, “and look forward to returning to normal operations and inventory levels in time for the summer selling season…. We know that many of you are still dealing with low inventories and out-of-stocks.  We will continue to work with you to mitigate the problem any way we can.”  Those important messages at end of long letter, that mostly talked about how,  because of “supply constraints,” MC would temporarily relax DPIs (“distributor performance indicators”), President’s Award requirements and other standards and measurements.