Shipments data from Beer Inst for 42 "reporting" states shows areas where AB improved trends to get to better overall 6-mo number (-0.3%), as well as stubborn weak spots for AB and MC, principally CA. Constellation trends strong across the board, natch. Pabst and HUSA trends spottier but individual state and region numbers are relatively small for them, so modest bbls changes can translate into larger-looking % changes.

Key trend for AB and MC: critical CA mkt remains a tuff challenge. Indeed, AB down almost 200K bbls, 4.8% in CA in 1st half; its entire dropoff estimated 140K bbls, 0.3%. So outside of CA, AB posted slight net gain. MC dropoff more widespread, but MC down 140K bbls, nearly 6% in CA Jan-Jun. That's about 30% of its 1st-half loss. AB up or even across south and most of Midwest, scoring gains in 3 regions, held even in 1. AB also improved trends considerably in Mtn states vs calendar 2015, tho still down. Its New Eng trend worsened. In biggest reporting states, AB took hit in CA, off slightly (about 1%) in OH, MI and PA. But AB posted gains in key TX and FL mkts, as well as GA, IL, AZ and WI.

Meanwhile, MC continued down in each region and most of its biggest states. In addition to CA, MC off 2.3-2.5% each in TX and FL, 1% or more in MI, IL and WI (legacy Miller heartland). Up in OH tho, as well as GA, AZ and PA. CBBD region and state figures exclude Ballast Point; that explains lower double-digit trends vs the high-teens trend with Ballast included. But CBBD gains solid or better across the board, including 8.5% pop in CA with Modelo portfolio (+165K bbls). It's just 187K bbls behind MC statewide for 6 mos, closer yet including Ballast Pt. CBBD also ratcheted up TX trend, jumped in OH and revved up in GA. HUSA stung in New Eng and off 4% in CA. But even where trends down mid-singles elsewhere, volume changes modest. For example, near-10% drop in MI was just 5K bbls. Pabst up in 6 of 8 regions, and posted good gains in CA, TX, GA and AZ. Outside of those states, movement less than 10K bbls. Craft slowdown reflected in Others trends. Collectively, Others up double digits in Southeast, WN Cent and WS Central regions, but Northeast, EN Central, Mtn and Pac trends in low-mid singles.  

While overall beer biz showin' some growth off-premise, not happenin' on-premise, at least not in GuestMetrics universe of 9K+ outlets across US. Extra people, extra attention and extra dollars just ain't movin' needle as spirits continue to gain share in bars, restaurants, etc. Sure, taproom biz still healthy and takin' biz from mainstream joints, but can't be offsetting this loss. Yr-to-date thru Aug 7, beer volume -5.6% in GM world. That follows 4.5% dropoff same period last yr, for 10%+ decline over last 2 yrs. Beer declined across the board, but sharpest in key bars/clubs outlets, -6.1% YTD. Spirits ain't exactly knockin' it outta the park on-premise. But liquor's -1.7% volume trend almost 4 pts better than beer this yr, about same spread as in 2015. Net-net: beer lost 0.9 volume and $$ share thru Aug 7, virtually all of that to spirits.

Craft Still Gainin' Share, But Not as Much Craft slowed share gains on-premise too. Tho craft volume down 4.4% YTD, share up 0.4 to 33.6. In $$, craft share hit 38, up 0.7. So it's still strongest performer on-premise among major segments (small, 4-share "premium plus" segment gaining volume, driven by Michelob Ultra). Despite Constellation gains, import volume -5.5% and holding share. Craft + imports just over 51 share of volume, just under 58 share of $$ on-premise. Premium light volume down 8.3% and continued to shed share. Off 0.7 to just over 1/4 of volume, just over 1/5 of $$.

Trends: 21 of Top 25 Brewers Down; AB Holding Share While 4 of top 6 brewers down off-premise YTD in IRI, top-player trends much worse on-premise. Remarkably, 21 of top 25 brewers lost on-premise volume thru Aug 7. Some numbers pretty scary. Among top 10, MC and Yuengling each down 8-9%; HUSA, Boston Beer, DBCUSA and Gambrinus down 10%+. AB and Pabst off 5-6%. So AB held share of on-premise so far this yr at 24.2. Lagunitas volume dipped 0.8%, but gained share. Lone volume gainer in top 10: Constellation +2.6% and picked up 0.5 share. Most sizable craft brewers down; a bunch down double digits. Gotta get to Sapporo, Firestone Walker and Founders, none in top 20, to find gainers YTD.

Better Trends for Big Brands? Barely Big brands continue to struggle just like big brewers. Six of top 10 brands posted worse trends YTD thru Aug 7 than last yr. Bud Light -9.2% (vs -8.7%), Miller Lite -7.5% (vs -6%). Coors Light improved modestly, but still -7.2%. Corona, Blue Moon, Dos Equis and Bud each softer this yr than last. Mich Ultra goin' great on-premise too, +5.8% and only gainer among top 10. Corona -2%, Stella -0.4%. Among next 10 brands, lotsa double-digit drops (Heineken, Angry Orchard, Shiner Bock, Sam Lager, etc), tho #s 19 and 20, Lagunitas IPA and Modelo Especial, each up.  

Total beer biz up 0.8% in IRI multi-outlet + convenience yr-to-date thru Aug 14. But 4 of top 6, AB, MC, HUSA and Boston Beer, each show modest volume declines YTD. AB down 0.7%, MC down 1.5%, HUSA down 1.4% and Boston Beer down 3.2% YTD in IRI data (if you include Alchemy & Science subsidiary, Boston close to flat in these channels). Pabst volume up 4.1% YTD, but it too turned negative over last few mos. Down 6.7% for 4 weeks thru Aug 7 as it laps Not Your Father's Root Beer intro. Interestingly, AB volume up slightly last 12 weeks. Meanwhile, Constellation up 13.2% YTD, still turnin' up heat.

Mike's, DBCUSA, Yuengling Up; Sierra, CBA, Gambrinus Down Suppliers #7-9 all showed growth, including surprising Mike's still truckin' along at rock solid 8.4% pace. Yuengling up over 4% in IRI MULC and pickin' up speed (tho it was down 3% all channels in 1st half) and newly rechristened Diageo Beer Co USA up almost 2%. But several leading craft cos takin' it on chin so far in IRI in 2016. Sierra Nevada down 4.1%, Craft Brew Alliance down 4.3% and Gambrinus down 6.2%. Each down more in recent weeks. So with Boston, 4 of top 6 craft brewers down YTD. NBB is an exception among largest craft cos, mainly because it expanded to many new states in 2016 and also has biggest new craft brand in Citradelic. Even so NBB volume up only 0.8% YTD. Bigger exception: Lagunitas, still experiencing strong growth. Up 22.2% YTD.

Top 4 Brands Flat or Down, Lost 1 Share; 8 of 15 Biggest $$ Growth Brands Are FMBs What about top brands? Bud Light down 2.2% and Bud down 3.5%, but Coors Light even and Miller Lite +0.2%. Those 4 brands still are about 41 share of industry volume in IRI MULC and lost 1 share yr-to-date. But three other top 10 brands, Corona, Michelob Ultra and Modelo Especial, slightly less than 10 share of volume and gained 1.3 share of volume, 1.55 share of $$ YTD. Corona volume up 7%, Ultra up 23.6% and Modelo Especial up 22%. Those 3 brands collectively grew $416 mil YTD. That's 58% of $720 mil beer category growth so far this yr. Another almost $200 mil in $$ sales growth from 8 different FMBs that are in top 15 $$ growers, including 5 hard sodas. Meanwhile, several leading subpremium brands are down between 2-4% (Natty Light on lower end of that range, Keystone and High Life towards upper end). But Busch Light up 0.3% and Busch down 1.2%.

High End Still Addin' 1.8 Share of Volume, 2.3 Share of $$; Constellation Near Half That Import volume up 7%, craft up 6%, superpremiums up 7.5% and FMBs up 10.2% in IRI MULC YTD thru Aug 14. Those 4 above premium segments gained almost 2 share of volume and almost 2.5 share of $$ YTD, tho cider down double digits and lost share. Speaking of share, AB lost 0.77 of volume and MC down 0.63 YTD, while Constellation up 0.83. But for 12 weeks thru Aug 7, AB lost 0.63 and MC lost 0.68 share, while Constellation gained 0.92. Constellation gained 1.16 share of $$ YTD, fully half of high end share gain. AB and MC lost 2 share of $$. Pabst only other player that gained more than 0.1 share of volume or $$. Up 0.16 share of $$ YTD, tho that's reversed in more recent periods.  

Following summer flurry, now around 20 deals so far in 2016 to buy part or all of craft brewers tracked by INSIGHTS. That's slightly accelerated pace from number of craft mergers and acquisitions in 2015. Yet deals are definitely smaller. There's no billion $$ blockbuster like Constellation's 100% purchase of Ballast Point, no deals as high profile as Heineken's 50% stake in Lagunitas. But MillerCoors got in game in significant way, buying majority of Hop Valley, Terrapin and Revolver. Lagunitas bought stakes in 3, Independence (TX), Southend (SC) and Moonlight (CA) and at presstime, leased Hilliard's old facility in Seattle which will become another Lagunitas Taproom and Beer Sanctuary. Founder Tony Magee likes these smaller, local deals and sez he wants to do "a lot of them." AB's last announced deal, to buy Devils Backbone in early Apr, still not approved by DoJ. But on Aug 23, it set terms under which it could make qualifying offer for much larger CBA down road. There were also 2 significant private equity deals. Ulysses Mgt bought majority of Victory, formed Artisanal Brewing Ventures. And Oskar Blues Holding Co added majority of Cigar City. About half of deals INSIGHTS tracked that went to these 5 entities. Still lotsa action in space if not making quite as big a splash as last yr.

While lots of smaller transactions popped, bigger potential transactions still much in air (and in news) even if they didn't happen. Hong Kong-based hedge fund Tybourne Capital accumulated 10% of Boston Beer. Highly unusual. Perhaps it's betting that largest craft brewer Boston will sell. Bloomberg reported rumblings that Constellation could be a potential Boston suitor months ago. Unclear what, if anything, actually happening here. Meanwhile, another top 5 craft brewer, New Belgium, reportedly sought $1 bil and tho there were suitors, none came close to that #. New Belgium co-founder Kim Jordan said at employee retreat recently that New Belgium will remain "fully independent" and 100% employee-owned. AB and CBA moved closer together on several fronts, with AB agreeing to contract brew up to 300,000 bbls of CBA products, pay CBA lotsa $$ for intl rights, extend agreement for AB distribs to sell CBA and set terms under which AB could potentially buy the rest of CBA. Even if no deal, these moves might have served another purpose: to block other potential suitors. Both Pabst and Boston reportedly took a look.  

AB's 11th hour move to match and redirect Adams Bev deal for Rex Dist to Mitchell Dist sent shock waves thru AB system and beyond. Move came just 2 days before close. Adams Bev prexy Philip Mullin reportedly learned of decision at AB wholesale panel meeting in NYC. He is current chairman of AB wholesaler panel. Philip returned our call, but company policy is not to comment on such matters. Meanwhile, what about Yuengling? Yuengling just entered MS this yr. And Rex Dist sells Yuengling. But new buyer Mitchell the only AB distrib in state that did not take on Yuengling brands. Adams was slated to buy Yuengling as part of the Rex deal. Fate of Yuengling in Rex mkt unknown at presstime.

AB's decision raises lotsa questions. In era, when AB purportedly emphasizing distrib relations, why did it reject its panel chair? And why did it wait until 11th hour, after Adams had already incurred considerable time and expense? Many also wonder whether AB taking punitive action on Yuengling and/or rewarding Mitchell for not taking Yuengling initially. But wouldn't both of those rationales potentially run afoul of DoJ consent decree? As AB ceo Joao Castro Neves noted in initial letter to distribs about decree, "the sale of third party beer will not be a factor we may consider," in buy-sell transactions. Could AB really not have considered that when making its decision here? In several directions, the optics of AB's decision here are challenging.

In statement, AB vp of wholesaler and biz development Bob Tallett said: "Mitchell is an excellent operator and . . . currently runs three operations in Mississippi . . . After a thorough evaluation, we believe Mitchell Beverages' existing presence in Mississippi, proximity to Gulfport, and greater familiarity with the market will provide better customer service and allow for a smoother transition . . . Clay Adams and Philip Mullin continue to be valued wholesalers in our network. Since 2012, we approved Adams Beverages' acquisitions of three A-B distributors in Charlotte and Shelby, N.C. and Tuscaloosa, Ala. - which more than tripled their size . . . This growth demonstrates the strength of our partnership and our belief in Clay and Philip," he added. "This was the right decision for our business and we expect there will be other opportunities for Adams Beverages to continue to grow."

Following purchase of Rex, Mitchell's MS volume will increase to about 9.5 mil cases, almost half of AB's volume in its highest share state. Including its operations in Maryland, Mitchell will sell nearly 15 mil cases overall. In other summer AB deals, Eagle Sales of Rapid City and Chamberlin, SD (Helland family) will sell to Quality Brands of Omaha (Gillick family), which will become over 7 mil cases. And Choice Brands of OH (Bellas family) will sell to neighboring Muxie Dist, which will become close to 2 mil cases, selling MC and Constellation in part of territory.  

Notable quickening of deal flow for both distribs and craft brewers in summer of 2016. At least 4-5 distrib deals announced in Aug alone, after slow start to yr. Some surprising twists and turns, but most frequent sellers are small to mid-sized AB distribs. (Most deals detailed and first reported in our INSIGHTS Express.) Then too, lotsa smaller craft deals this yr. But big cos most likely buyers (often just a stake). Of 10 craft deals since Jun, 3 bought by Lagunitas, 3 by MillerCoors. But as always, AB looms large in deal space, directly or indirectly. With ink barely dry on DoJ consent decree, AB and Craft Brew Alliance unveiled series of agreements, including minimum "qualifying offers" from AB for rest of 5th largest craft brewer, CBA (AB currently owns 31.6%). These offers possible over next several yrs, at minimum prices between $22 and $24.50 per share. That's more than a 50% premium to closing price day this announced. As AB and CBA codified their conditional commitment to each other, CBA's stock boosted by over 30% in 2 days ($80-90 mil). AB doesn't have to make offer, nor does CBA have to accept, but agreements make offer from someone else less likely and more expensive. AB also still exerts huge influence in distribution deals, even if it can't add branches beyond 10%. For example, AB exercised its contractual right to "match and redirect" Rex Dist to Mitchell in in MS. 

Join us for the 23d annual Beer Insights Seminar, at the Waldorf=Astoria in New York City, with a reception Sunday eve Nov 13th and a jampacked day Monday November 14th. This year, you'll get another top-notch program. Just added: two generations of leaders of one of the most successful independent craft brewers, Bell's Brewery. Founder Larry Bell and his daughter and vp Laura Bell will join our program.

We'll also feature some of the most prominent leaders in the US beer biz and a leading progressive global beer ceo (with a notable US presence). MillerCoors ceo Gavin Hattersley will talk about how he's transforming the company with the goal of getting to growth in 2019. Constellation Brands Beer Division president Paul Hetterich will talk about how he's evolving the biz at hottest US beer co. And FIFCO ceo Ramón Mendiola Sánchez (FIFCO owns North American Breweries) will talk about his triple bottom line philosophy and how his co is applying it in the US and Costa Rica. Beer Marketer's INSIGHTS president Benj Steinman will provide an industry overview. More speakers will be announced in coming weeks. Seating is limited. You won't want to miss this exciting event. Click here for more info. Click here to register.  

Beer "won" annual Gallup Poll on American's drinking habits again this year: 43% of drinkers said they drink beer most often vs 32% for wine, 20% for liquor. Despite ups and downs, that's virtually the same split as 10 yrs ago and 20 yrs ago in same poll. And that's even with notable changes in share of absolute alcohol each beverage claims. Recall, beer has lost about 6 share of absolute alcohol over last decade. So right off the bat these poll findings expose big gap between what people say they drink and what (and how much) they actually drink. Even tho only 20% of drinkers say they drink liquor most often, liquor now claims over 1/3 of US absolute alcohol consumed. And wine less than 16 share of absolute alcohol, even while over 1/3 of drinkers say they consume it most often. Then too, American drinkers continue to tell Gallup that they consume only 4 drinks/wk on average. That's a small fraction of actual consumption based on sales/shipments.

In addition to this volume gap, Gallup responses reveal wide gender gaps for beer and wine. Indeed, Gallup's feature story on the poll highlighted beer gap. Pooling data for 2010-2016, Gallup reports beer is preferred alc bev of 54% of male drinkers, but just 23% of female drinkers. That 31-pt gap creates huge challenge (and potential oppy) for beer marketers. It's one they've talked about for yrs, but not yet met. Wine has opposite issue. Half of all female drinkers prefer wine vs just 18% of men, and that changed little this century. But virtually no gap for liquor: 22% of men, 23% of women preferred liquor in the 2010-2016 data, vs 19% and 25% respectively for 2001-2009. These figures support more extensive survey results reported by Mediamark. In its most recent survey, 54% of men said they drink beer, 31% of women. At same time, 27% of men said they drink wine vs 37% of women. But for spirits, split was 46% of men, 43% of women. (Some drinkers consume different combos of bevs, natch.)

So this yr's Gallup Poll on Americans' drinking habits shows once again that at least reported US drinking habits very slow to evolve even in fast-changing marketplace with constant innovations, expanded outlets, new mktg strategies, convenience pkgng and more. One key measure the same for literally decades: about 2/3 of Americans drink and 1/3 abstain. The 65% of 18+ yr-olds that "had occasion to drink" in 2016 was exactly the same as in 1994 and 1966. It's been as high as 71% and as low as 56% in this 50-yr period. But vast majority of those yrs within 4 pts of that 65%. And 4 pts is Gallup margin of error in surveys of about 1,000 adults per year. So whatever industry marketers have accomplished, they have not persuaded a larger percentage of Americans to drink. And given relatively flat (absolute alcohol) per capita consumption trends, they're not convincing drinkers to drink much more, either. This is a positive from the alcohol policy perspective. It supports industry's argument that ads/mktg, price promotions and expanded availability simply impact brand/beverage choice. But it makes it that much more of a challenge for those marketers to drive additional sales.  

Join us for the 23d annual Beer Insights Seminar, at the Waldorf=Astoria in New York City, with a reception Sunday eve Nov 13th and a jampacked day Monday November 14th. This year, you'll get another top-notch program. Just added: two generations of leaders of one of the most successful independent craft brewers, Bell's Brewery. Founder Larry Bell and his daughter and vp Laura Bell will join our program.

We'll also feature some of the most prominent leaders in the US beer biz and a leading progressive global beer ceo (with a notable US presence). MillerCoors ceo Gavin Hattersley will talk about how he's transforming the company with the goal of getting to growth in 2019. Constellation Brands Beer Division president Paul Hetterich will talk about how he's evolving the biz at hottest US beer co. And FIFCO ceo Ramón Mendiola Sánchez (FIFCO owns North American Breweries) will talk about his triple bottom line philosophy and how his co is applying it in the US and Costa Rica. Beer Marketer's INSIGHTS president Benj Steinman will provide an industry overview. More speakers will be announced in coming weeks. Seating is limited. You won't want to miss this exciting event. Click here for more info. Click here to register.  

 Beer "won" annual Gallup Poll on American's drinking habits again this year: 43% of drinkers said they drink beer most often vs 32% for wine, 20% for liquor. Despite ups and downs, that's virtually the same split as 10 yrs ago and 20 yrs ago in same poll. And that's even with notable changes in share of absolute alcohol each beverage claims. Recall, beer has lost about 6 share of absolute alcohol over last decade. So right off the bat these poll findings expose big gap between what people say they drink and what (and how much) they actually drink. Even tho only 20% of drinkers say they drink liquor most often, liquor now claims over 1/3 of US absolute alcohol consumed. And wine less than 16 share of absolute alcohol, even while over 1/3 of drinkers say they consume it most often. Then too, American drinkers continue to tell Gallup that they consume only 4 drinks/wk on average. That's a small fraction of actual consumption based on sales/shipments.

In addition to this volume gap, Gallup responses reveal wide gender gaps for beer and wine. Indeed, Gallup's feature story on the poll highlighted beer gap. Pooling data for 2010-2016, Gallup reports beer is preferred alc bev of 54% of male drinkers, but just 23% of female drinkers. That 31-pt gap creates huge challenge (and potential oppy) for beer marketers. It's one they've talked about for yrs, but not yet met. Wine has opposite issue. Half of all female drinkers prefer wine vs just 18% of men, and that changed little this century. But virtually no gap for liquor: 22% of men, 23% of women preferred liquor in the 2010-2016 data, vs 19% and 25% respectively for 2001-2009. These figures support more extensive survey results reported by Mediamark. In its most recent survey, 54% of men said they drink beer, 31% of women. At same time, 27% of men said they drink wine vs 37% of women. But for spirits, split was 46% of men, 43% of women. (Some drinkers consume different combos of bevs, natch.)

So this yr's Gallup Poll on Americans' drinking habits shows once again that at least reported US drinking habits very slow to evolve even in fast-changing marketplace with constant innovations, expanded outlets, new mktg strategies, convenience pkgng and more. One key measure the same for literally decades: about 2/3 of Americans drink and 1/3 abstain. The 65% of 18+ yr-olds that "had occasion to drink" in 2016 was exactly the same as in 1994 and 1966. It's been as high as 71% and as low as 56% in this 50-yr period. But vast majority of those yrs within 4 pts of that 65%. And 4 pts is Gallup margin of error in surveys of about 1,000 adults per year. So whatever industry marketers have accomplished, they have not persuaded a larger percentage of Americans to drink. And given relatively flat (absolute alcohol) per capita consumption trends, they're not convincing drinkers to drink much more, either. This is a positive from the alcohol policy perspective. It supports industry's argument that ads/mktg, price promotions and expanded availability simply impact brand/beverage choice. But it makes it that much more of a challenge for those marketers to drive additional sales.