It’s Kevin Osborne, not Kevin Ellsborne who moved from Pabst region veep to Florida regional sales director.  Clarification:  A close reader noted that we neglected to say whether Constellation’s trend in Nielsen all outlet that we reported on Tuesday was in $$ sales or volume.  Constellation up 12.6% yr-to-date by volume. Its $$ sales up 14.4%.   

Just on heels of Boston Beer’s Jim Koch comment that there will be no price war in craft beer, someone sent picture of Las Vegas display offering 2 24-oz cans of New Belgium’s new Dayblazer for $3.00. Source chided: “No price war in craft beer?” Regular price $2.99 each, sign sez. But at half price, 2 for $3.00, that means for $4.50, you could get the equivalent of a six pack of beer. That’s “economy” beer pricing, said source.  He questioned craft in singles, but priced at that level “it’s even crazier.”  

Bold Rock continues to be strong growth story in segment that’s still declining 8% yr-to-date in Nielsen all outlet.  Bold Rock up 59% in 1st qtr, it said, following up on 70% growth to 45,000 bbls last yr.  In IRI data, it was up 82% in 1st qtr.  So Bold Rock plans to expand its production facility in Mills River, North Carolina (same town as Sierra Nevada’s 2d brewery) with 30,000 sq ft of new production space in 2017.  Bold Rock’s original cidery is in Nellysford, VA.   It is the “largest independently owned craft cidery,” Bold Rock sez and the 6th largest cidery overall. Top cider franchises in Nielsen are all declining, except Strongbow, some very steeply.  Angry Orchard down 7.4%, Smith & Forge down 25.9%, Stella Cidre down 1.4% and Woodchuck down 42.5% yr-to-date in Nielsen.  Strongbow up 3.7%, with 32% growth last 4 weeks.  

Heineken’s recently released short video “Worlds Apart” quickly lit up the internet (3.6 mil views in 8 days) and the ad commentariat.  “Worlds Apart” puts together individuals with diametrically opposed attitudes about feminism, climate change and transgender issues (they’re unaware of the differences at the outset) and tasks them to work together to build a bar. At the end of four and a half minutes, the video falls back on a very, very familiar theme: the value of adults discussing issues/differences over a beer, even if those differences are deep.    Unlike the quickly pulled and much disparaged recent Pepsi ad that attempted to tackle a similar theme, the Heineken ad does not use professional actors, does not have a celebrity and offers very light brand message.  

Response has been mixed but decidedly positive from what we’ve seen: i.e. “A Heineken commercial puts Pepsi’s ‘protest’ ad to shame” (Business Insider), “Hey Pepsi, Here’s How It’s Done.  Heineken Takes on Our Differences, and Nails It” (Adweek); “Heineken ‘Worlds Apart’ Ad Is A Beautiful Blend of Beer and Politics” (HuffPost).  There were skeptics, who complained that Heineken’s trying to sell beer after all, and critics, apparently from the alt-right uncomfortable with the positive portrayal of a transgender person.  And all points of view aren’t yet in.  Regardless of what one thinks of President’s Obama’s famous 2009 “beer summit,” to the extent that theme survives and has value can’t hurt beer, especially in such a polarized political climate.  Whether Heineken has effectively channeled it is up for debate.  But is there a better pro-beer meme out there?        

Heineken’s recently released short video “Worlds Apart” quickly lit up the internet (3.6 mil views in 8 days) and the ad commentariat.  “Worlds Apart” puts together individuals with diametrically opposed attitudes about feminism, climate change and transgender issues (they’re unaware of the differences at the outset) and tasks them to work together to build a bar. At the end of four and a half minutes, the video falls back on a very, very familiar theme: the value of adults discussing issues/differences over a beer, even if those differences are deep.    Unlike the quickly pulled and much disparaged recent Pepsi ad that attempted to tackle a similar theme, the Heineken ad does not use professional actors, does not have a celebrity and offers very light brand message.  

Response has been mixed but decidedly positive from what we’ve seen: i.e. “A Heineken commercial puts Pepsi’s ‘protest’ ad to shame” (Business Insider), “Hey Pepsi, Here’s How It’s Done.  Heineken Takes on Our Differences, and Nails It” (Adweek); “Heineken ‘Worlds Apart’ Ad Is A Beautiful Blend of Beer and Politics” (HuffPost).  There were skeptics, who complained that Heineken’s trying to sell beer after all, and critics, apparently from the alt-right uncomfortable with the positive portrayal of a transgender person.  And all points of view aren’t yet in.  Regardless of what one thinks of President’s Obama’s famous 2009 “beer summit,” to the extent that theme survives and has value can’t hurt beer, especially in such a polarized political climate.  Whether Heineken has effectively channeled it is up for debate.  But is there a better pro-beer meme out there?        

“Despite an awful 1Q17,” wrote Susquehanna’s Pablo Zuanic, “and bearish (for the stock) parallel headlines (increasing signs Jim Koch has no plans to sell, a more challenging outlook for craft, insider selling), SAM shares seem to have found a bottom at $140.”  With plenty of cash, and modest expectations, “we deem the valuation compelling.” Pablo upgraded to “Positive” on SAM and stock took off this morning on rare boost.  Up $5.85, 4% at presstime.

Total beer biz $$ sales up $83.6 mil, 0.9% in IRI multioutlet + convenience yr-to-date thru Apr 16.  Same big 3 growth brands as last yr are killing it again in 2017, as we’ve been writing now for yrs. Mich Ultra sales up $80.3 mil, 23.9%, Modelo Especial up $63.5 mil, 21.6% and Corona $$ sales up $39.2 mil, 9%.  Last yr, both Henry’s Hard Orange and Best Damn Root Beer rounded out the top 5, putting up big incremental gains.  This yr, they are down big.  And no new FMB is near the top 10 growth brand list.  Last year, 4 of 10 top growth brands were new FMBs. FMBs collectively down 7% and lost 0.5 share of $$ YTD.

So Stella climbed to #4.  Up $14 mil, 16%.  And a healthier Heineken is in top 5 for first time in a long time, with $$ sales up $7.5 mil, 3.6%.  (Heineken not in top 10 last yr.)  Another HUSA brand, Tecate Light, is #6, up $5.86 mil, 30% (while Tecate down 11%).  Interesting to note that Heineken said Tecate franchise down in US in 1st qtr, but it’s up slightly in IRI thru Apr 16. Twisted Tea right behind Tecate Light  at #7, with $$ sales up $5.8 mil, 17%.

Next several brands are very tightly bunched and full of surprises.  Pacifico a top-10 growth brand for first time, at #8, with $$ sales up $5.265 mil.  While almost all of top 10 growth brands are once again high end, this year High Life is #9, up $5.233 mil, 3.7%.  But that’s MC’s only Top 10 growth brand, which says something.  AB and Modelo each have 3, Heineken USA has 2. All high end except Tecate Light. The  #10 growth brand is a craft stunner, Space Dust IPA from Elysian (rolled out nationally by AB), up $5.226, 338%.  It just barely grew more than Modelo Especial Chelada, which is up $5.221 mil, 26% and is now up to #40 beer brand on IRI’s Top 100 list.  

After quarterly release noted Boston would implement “tactical” pricing in Q2, not surprising that some questions on call dealt with craft pricing.  “I don’t see major pressures in the future downward on craft pricing,” said chairman Jim Koch.  “A lot of craft brewers aren’t that profitable” and couldn’t “support a lot of downward pricing.... So I don’t see price wars erupting or anything like that.” But “primary downward pressure” on craft pricing, said Jim “is the advent of 15-packs into craft beer.” Unstated, but Jim’s emphasis suggests Boston might enter 15-pack fray in some way. Earlier, Martin also maintained that “craft pricing has been pretty healthy.”  Tactical pricing just means “we want to make sure that if there’s an ad or a feature in a major retailer that we’re on it and if that means that we’re potentially half a price point off that we adjust. We’re not talking about national adjustments or deep discounting in any way at all.”  Need for tactical adjustments became clear after Boston missed some opportunities over Thanksgiving and Christmas. “We’re only making tactical adjustments that make sense,” he added.

While Sam Adams franchise very soft, mainly because of spring seasonals, Boston’s Twisted Tea “continues very strong,” said Martin.  Tea growth “compensating” for “some weakness in Sam Adams… lapping of launches” plus declines in Coney Island and Traveler Shandy.  Angry Orchard drop-offs are “stabilizing” and new media “tested really well.”  And what about Truly Spiked and Sparkling?  “Still a pretty small category” overall, between 2 mil and 4 mil cases last yr, “maybe” 4 million annualized.  “And this year, we just don’t know. And I think it’s fair to say retailers are being a little more cautious.”  But that little category is “bubbling away” on a “very small base.”  More on Boston Beer’s call in Craft Brew News.  

Perhaps some of beer industry woes this yr are tied to broader economic phenomena.  That’s a bthought after reading this morning’s front-page article in Wall Street Jnl, which begins by noting “lackluster sales” in 1st qtr at Pepsi and P&G as “producers of some of America’s biggest products struggle to give shoppers what they want.”  Overall, purchases of consumer packaged goods “declined 2.5% in unit terms in the first quarter, according to Nielsen,” wrote WSJ.  And “big brands are struggling the most.”  Article also talked about increased “sources of volatility,”  emergence of smaller brands, and sluggish economic growth.  Sound familiar?  

Perhaps some of beer industry woes this yr are tied to broader economic phenomena.  That’s a bthought after reading this morning’s front-page article in Wall Street Jnl, which begins by noting “lackluster sales” in 1st qtr at Pepsi and P&G as “producers of some of America’s biggest products struggle to give shoppers what they want.”  Overall, purchases of consumer packaged goods “declined 2.5% in unit terms in the first quarter, according to Nielsen,” wrote WSJ.  And “big brands are struggling the most.”  Article also talked about increased “sources of volatility,”  emergence of smaller brands, and sluggish economic growth.  Sound familiar?