Leveraging global power is key benefit to being “part of the largest brewing concern on planet earth,” so that’s

exactly what Goose Island will do, as prexy Ken Stout told Chicago Tribune. The AB-owned craft brand has

plans to open brewpubs or branded bars in 5 more countries across the globe (in addition to Philly and London

projects already announced), as well as to boost exports from the US while producing more Goose abroad. AB

will open Goose brewpubs in Sao Paolo, Brazil, Seoul, South Korea and Shanghai, China this month, in

addition to a branded pub in Monterrey, Mexico (Heineken’s Mexican hq) and Vintage Ale House concept

opening in London. A Toronto brewpub is expected to open next year. Success in London could greenlight

plans to open a similar concept in Brussels, Belgium. Folks at Goose already benefit from global-focused sales

team at ABI’s High End biz unit when exporting to Canada, Mexico, Brazil, England, Scandinavia, Belgium,

the Netherlands, South Korea and China. But it’s also got plans to begin producing some Goose beers in China

and possibility to do the same in Brazil and Europe, the Trib reported this morn.

Tho High End prexy Felipe Szpigel insisted on lack of craft retail strategy at our Spring Conference in May,

“Goose Island is finally making its strategy clear” with these moves, according to the paper. Call it what you

want, but what’s good for the goose is good for the gander, as they say. “We’re like the oldest child in this

whole craft acquisition thing,” Ken said, “and we get access to things first.” So while Goose gets first crack at

global craft expansion, back home, AB’s other 8 acquired US craft brands continue to grow thru expanded

brewing capabilities, distribution and owned retail stateside too. Recall, new brewpub projects in cities further

from home already in the works for 10 Barrel and Golden Road, at least.

AB’s Stella

Artois still sells “around 20% of our yearly volume” in final 6 wks of the year, geared around the holidays,

brand vp Harry Lewis shared with INSIGHTS. And sales are picking up again leading into this holiday period;

volume up 17% and $$ up 18.5% for 4 wks thru Nov 27 in IRI multi-outlet + convenience data compared to

+15% and 17% YTD. Stella’s historically a brand with a holiday tradition, originally brewed as a Christmas

gift in its Belgian hometown, Leuven. So Stella’s focused on that aspect of its heritage since coming to the US.

It typically only advertised during the holidays in earlier stages, Harry explained. Yet even as brand has grown

substantially, now with yr-round attention, distribs and retailers alike “always reserve the space and displays

and the execution for Stella” during Nov and Dec. Harry also credited 12pk and newer 6pk cans as “huge

success” that’s fueled growth. In fact, 12pk cans “outpaced” Corona cans “for the second month in a row.” And

6pk cans launched in Sep, “helping in convenience stores” where Stella distribution not as strong. Indeed,

Stella “putting our bets” in c-stores, “filling those gaps.” And on premise, Stella chalice remains “the symbol of

the brand,” and Nova draft units are working “really well, closing some of the distribution gaps.”

Meanwhile, Stella Cidre “benefits a lot from Stella growth,” sez Harry. While Cidre trends slowed in more

recent periods (volume +14% in IRI for latest 4 wks), total volume is up 60% vs 2015, he shared. And displays

and features in the mkt for Stella are increasingly associated with Stella “family.” So both Stella and Cidre

“have seen great benefits through the holiday season.” When Stella family is placed together, the family grows

23% in that account, he added.

Stella’s Biggest Ad Campaign Yet; Cidre Targeting Picnics as “Untapped Occasion” Next yr will be Stella

Artois “biggest campaign” yet “in terms of investment,” continuing with “Buy a Lady a Drink” campaign (w/

Matt Damon starring) that’s helping provide clean drinking water to women and their families in the developing

world. Not only will AB donate water for every limited edition chalice purchased, now “we’ll donate 6 months

of clean drinking water” for every 6pk purchased, 12 mos for every 12pk purchased. “This campaign resonates

a lot with people,” since “it’s not only about the product,” but about “doing good.” Stella will also be able to

tap “a new suite of assets” for marketing occasions, such as Golden Globes, Oscars, Sundance, Tribeca, etc.,

Harry added. And it’ll continue with “Host” theme, since “hosting is the only occasion that’s growing in the

US significantly.” Then too, AB will “double the amount of media in the market” for Stella Cidre in 2017 and

invest in a new TV commercial that specifically targets an “untapped occasion”: picnics. While Stella looks to

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continue double-digit growth streak, currently 23 consecutive qtrs and counting, “number one job” as mktg

team is to “protect sophistication” of Stella.

Word

bubbling up that after nearly 3 yrs, AB will finally get a deal done that it has long desired in its backyard.

Union Dist (a Sheehan Family Co) has sold Blue Point brands across five boroughs of NYC for yrs and yrs.

That had to bug AB, following AB purchase of Blue Point Brewing in Feb 2014. But carve out in state

franchise law wouldn’t allow AB to move (efforts came after AB bought Blue Point) and they couldn’t get a

deal done. Until now. Brands still haven’t changed hands, but reportedly will in early Jan. Some retailers

already notified. AB will get Blue Point brands for its branches in Queens, Bronx, Staten Island and Manhattan,

while Union will still sell Blue Point in Brooklyn. And Union will get AB brands in part of Queens.

Blue Point Down 1% Last 12 Weeks in IRI; AB Acquired Craft Slows Some But Still Way Up Meanwhile,

Blue Point not the shining star of AB’s craft portfolio, at least in IRI data. Down 0.8% for last 12 weeks thru

Nov 27 nationally in IRI multi-outlet + convenience, but still up 10% yr-to- date, including territorial expansion.

That’s one of slowest growth rates of any of AB’s acquired craft brewers. Blue Point sold 219,000 cases in IRI

MULC YTD, about 5.6% of AB’s acquired craft volume of 3.9 mil cases (not including Karbach yet). Goose

Island is roughly half of AB’s acquired craft volume and it’s still up 28% YTD, tho also slowed to 13.5%

growth last 12 weeks. Total AB acquired craft volume +32% YTD, +23.7% for 12 weeks.

As mandated by South African govt as a

condition of its takeover of SABMiller, Anheuser Busch InBev sold its stake in Distell Group, which makes

wine, spirits and ciders, to a state-owned pension fund.

Heineken getting

much bigger as on-premise retailer in UK. It teamed with Patron Capital and they won bidding war to acquire

Punch Taverns for $502 mil. Punch a public co with about 3,300 taverns. Heineken will keep 1900 of ‘em and

pay $380 mil, plus assume $1.2 bil in debt, while Patron will keep the rest of taverns. That’s in addition to the

1049 Heineken already owns, according to Bloomberg. Heineken will now become the 3d largest pub operator

in UK. This big move serves as a reminder that laws, and the biz, very different in other parts of world.

“Heineken’s move looks strange in the context of a marketing led international brewer but reflects the realities

of the U.K. beer market,” Societe Generale’s Andrew Holland told Market Watch, “which is unlike any other in

the world.”

Profile of David Trone, who recently gave up prexy position of mega-retailer Total Wine, in WSJ today, tells

familiar story of David and his brother Robert building $2.5 bil “retail empire” with 149 stores in 20 states.

Lots more stores in planning, natch. Reminds too that David spent $13 mil to come in 2d in Dem primary this

yr for MD House seat and about Total’s long-time litigiousness. Recall, Total’s currently challenging CT’s

pricing laws in fed ct. But two biz points popped. First, fully half of Total’s wine sales now in “winery direct

offerings,” in effect direct shipped/private label wines that Total purchases from “small and medium sized

wineries…whose wines are not in distribution in the US.”

“I’m A Total Contrarian,” Sez David Trone At same time, Total fully exploiting the premiumization that’s

happening in wine as well as beer and spirits. Runs lotsa in-store seminars to educate buyers and trade them up

to pricier bottles. “The current sweet spot for a Total Wine buyer is between $10 and $30 [per bottle],

according to Mr. Trone.” Another way Total appeals to “wealthier buyers”: futures, where buyers pay upfront

for wines that aren’t delivered for years. That’s “best way to access the top market,” sez David, tho unlike other

retailers, Total requires just 50% deposit, not 100%. “I’m a total contrarian,” he told WSJ, adding: “If all we do

is follow the data, then no one has an advantage.” So, while private label and premiumization have been

historically contradictory trends in US beer, and private label beer (usually lower-priced) hasn’t worked, Total

succeeding by doing both simultaneously, with tweaks. (Walmart’s dippin’ a toe in that water as well with its

Trouble craft beer brand.) Interestingly too, tho Total way ahead of the curve compared to many retailers, only

1% of its sales are online. But soon after he met with WSJ reporter, David toured Apple hq in effort to

“improve” Total’s web presence. Expect that to happen.

Consumer price index for beer increased 1.7% in Nov vs Nov 2015,

per latest govt stats. That matched CPI gain for all items in Nov, after lagging behind all items for first time in

19 months in Oct. CPI for spirits was up 1% in Nov vs yr ago, its biggest monthly gain in 2016, while wine

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CPI had its steepest decline at -0.9%. YTD thru Nov, CPI for beer rose 1.8% vs 1.2% gain for all items, 0.4%

gain for spirits and wine prices flat.

NBWA economist Lester Jones has talked about 2017 as yr of “data wars,” as more and more sources vie for

industry execs’ attention (and investment). Nielsen launched on-premise database earlier this yr. Now comes

“two-month year on year depletions” trends for handful of beer and spirits co’s, reported by analysts at Stifel

“in cooperation with our counterparts at Beverage Marketing Corporation” (BMC). BMC has been in data biz

for yrs, but this is new view.

Stifel report included Sep/Oct all-channel depletions trends, including on-premise, for Constellation and

Heineken USA. Data shows Constellation depletions up 15.2% for that period (about same as shipments

estimate yr-to- date thru Sep), slightly ahead of IRI trends. So Stifel upped its estimate for coming STZ qtr thru

Nov. Brand depletions trends all ahead of IRI MULC for same period: Corona Extra +11%, Corona Light

+10%, Modelo Especial +24%. Total HUSA depletion trends in BMC data tracked more closely to IRI figures,

Stifel reports. All in, HUSA portfolio +0.4% in Sep/Oct. Brand Heineken +2.5%, Dos Equis +7.2%, Heineken

Premium Light -6%, Tecate Light +25%. Interestingly, BMC data shows depletions trends for each of three top

distillers weaker than IRI-tracked channels, which Stifel attributes to softer on-premise, even for top spirits

players. Indeed, Sep/Oct depletions down for each even while revs up: Diageo (-0.6%), Pernod Ricard (-0.3%)

and Brown Forman (-1.3%).

Eagle Dist of Huntington WV (Guy Spriggs,

Scott Spriggs and Casey Hill) bought Proud Eagle of South Charleston, WV, around 3 mil cases (Bill Rucker,

Jim Linsenmeyer). Eagle is part of Triple Crown Bev, which also owns small distribs in KY and OH. Eagle

Dist now reportedly totals about 5 mil cases annualized. Meanwhile, Bill Rucker still owns 2 smaller AB

distribs, Mountain Eagle and Northern Eagle elsewhere in WV.

Eagle Dist now AB’s biggest distrib in WV. And WV remains one of AB’s highest share states, one of the few

where it is still over 60. In fact, AB at 61 share in WV in 2015. It sold about 10.8 mil cases in 2015 in this

smallish mkt (down from 12.4 mil cases in 2012). AB lost 5 share in WV in last 3 yrs. And total mkt volume

down 6% same period. Dropped to 17.6 mil cases. So WV a tough mkt. This makes at least a dozen AB distrib

deals we’ve tracked in 2016, including 3 small ones at once in UT earlier this fall. Yr started slow on distrib

deals, but now slightly above average in AB network, with perhaps more by yr-end.

In 2+ weeks

since Pabst announced hiring of new ceo Simon Thorpe, it has already announced 2 partnerships, first with

largest Mexican craft brewer Minerva (near 17,000 bbls in Mexico, as reported in sister pub Craft Brew News,

volume 7, #103) and today with Michigan craft brewer New Holland. New Holland will be roughly level at

about 35,000 bbls this yr, and is currently sold in parts of 35 states, founder/prexy Brett VanderKamp told

INSIGHTS. Mutual goal of partnership is to make New Holland beers available nationwide, but that will take

some time, both Brett and Pabst biz development veep Rich Pascucci agreed. “There’s a lot of room to run,”

Brett added. Roughly 80% of volume already aligned in distribution network. So partnership “not putting a

high priority” on further distrib transitions. Flagship brand is 11% ABV barrel-aged stout Dragon’s Milk,

which is 40% of volume. About half New Holland’s biz in home state Mich. Pabst building out high-end sales

platform, which already includes partnerships with Vermont Hard Cider, Tsingtao, Small Town Brewery. But

these 2 recent announcements significantly up its game in craft beer. More in our Craft Brew News later today.