Not to get too heady, but one theme that ran across numerous presentations at INSIGHTS Spring Conference this yr was a clash between beer world perspectives that can best be described as sharp "either/or distinctions" vs a more expansive "both/and" vision. For example, should beer, specifically craft, be marketed/merchandised with a focus on brands or styles? As he has in the past, Constellation Brand's Beer Chairman Bill Hackett, who has as much sales savvy (and success) as anyone, railed against notion of selling by style, predicting it would be the "death knell" of beer biz. Absolutely gotta build brands and brand equity, he insisted, to drive value and price. Another savvy leader, Boston's Beer's Jim Koch, seconded that emotion, pointing out distribs pay much higher multiples for beer brands than wine brands: "that's brand equity in hard dollars." Yet, these and other execs, including HUSA prexy Ronald den Elzen on same panel, also stressed importance of "focusing on the consumer." Capturing and accommodating consumer "occasions" (and places) where they make choices is needed to regain share from wine/ sprits. Just the day before at same conference, BA economist Bart Watson questioned execs who "rail against wine-ification," then "talk about how wine's gaining share versus beer." Beer biz needs to "wrap its head around: how do we keep protecting the brands that we've built, while embracing the positive impacts of wine-ification on overall volume." As category keeps "looking for more consumers" and "looking to expand the base," NBWA economist Lester Jones suggests "somehow we have to walk that tightrope" of giving consumers what they want and building strong brands. Then there's constant carping, even among craft brewers, including Sierra Nevada's Joe Whitney at Conference, about "rotation nation" of bars constantly switching out tap handles with local and new, making it very difficult to sell in a 2d keg, and especially hard for natl craft players. That "doesn't build brands," said Joe, and those bars "not a place we try to play." Yet craft brewers helped to create and certainly cater to this world, this craving for new brands, new flavors with seasonals, variety packs, special releases and more. And now, some (many? most?) consumers demand more and more. Another "tightrope" perhaps, but hardly a surprise. Definitions, Distinctions and Differentiation Then there's evergreen issue of BA definition of craft brewer. As we noted last issue, asked about Constellation's Ballast Point now being "defined out" of BA definition, Bill Hackett bluntly dismissed any concern: "I [could] give a shit" and declared BA definition "means nothing" and "consumer doesn't care." Ronald agreed, calling definition discussions a waste of time and energy. BA should be "more embracing of the entire industry," Bill advised, noting industry needs "one voice" on tax, building beer category and other issues. But Jim Koch said significant percentage of consumers do care and again defended BA defn and key "distinctions" between craft and big brewers based on different ethos/mentality that craft created and passion and pride they bring to the beer. "Differentiation drives premiumization," Jim said. Later in discussion, Bill embraced a little differentiation himself. After noting CBBD is letting Ballast Point "do what they do," Jim quipped that AB has "said the same thing about Goose Island." Bill responded: "Please put me in a different category." Interestingly, given BA's criticisms/questioning of AB actions and motives, later in day AB High End prexy Felipe Szpigel heavily credited BA. He said "craft is what it is" today because of BA. While he understands industry will disagree on certain matters, he seeks to "talk about things we can agree on," i.e. quality, safety and education. Yet Felipe also echoed Bill and Ronald by suggesting that when there's "too much discussion" of definitions, beer loses to wine and spirits. While some (including BMI) have suggested AB "disrupting the disruptors" with its craft strategy (and Bill wants to be "in a different category" than AB), Felipe simply said AB "focused on what the customers" want, and wants to compete in the space like anyone else. "What's wrong with that?" Where Are Brands Built? On an even older industry truism, Sierra Nevada's Brian Grossman broke sharply with tradition and declared that brands are no longer necessarily built on premise. That's "fundamentally shifted" due to rotator bars and because it's "hard to keep anything on draft." So there's "more focus" on building brands off premise. Joe pointed out that Torpedo IPA not originally made available on draft but first intro'd in 6pks. But newcomer (to US biz) Felipe countered that "on premise is key for building brands" and the category. Brands "get traction" on premise and are then supported off premise; that's the "model for us." So. Is it brand vs style or brand and style? Is it craft vs big brewer or can they be one and the same and it's really only about the beer itself? Can different brands be "built" in different channels? Then there's issue of how beer, FMBs, hard sodas, ciders and/or seltzers play together and interact with wine and/or spirits. Is it either/or, both/and or different strokes for different folks (boomers, gen-x, millennials)? While industry marketers figure this out, looks like lotsa consumers have already decided: it's beer and wine and spirits and lotsa brands in lotsa styles, whenever and wherever they want 'em in whatever proportion they choose. Given that's the case, can the industry find a unified voice to build the category amid constant differentiation?

 With so much noise in last 2 weeks, could ABI-SAB deal be coming down home stretch here in US? Dept of Justice "poised to approve" ABI buy of SABMiller and spinoff of 58% of MC to Molson Coors this mo, reported Bloomberg Jun 1, citing "people familiar with the matter." But approval could "include limits on ownership of distributors," and "measures to keep the beer behemoth from edging craft brewers from shelves," added Bloomberg, again citing anonymous sources. That's 2 of big asks from some of deal's many critics, including Brewers Assn prexy Bob Pease. Indeed, Bob got well-timed op-ed in New York Times blasting deal as "anticompetitive" and worse, day after Bloomberg piece, just as 200 folks from BA and state brewers guilds got to DC for its annual "Hill climb" in advance of SAVOR. However, Bloomberg article also said craft arguments "don't appear to be getting much traction" with DoJ so far. Since DoJ ain't sayin', hard to know which anonymous sources to believe. Earlier Reuters article suggested that DoJ investigating AB's VAIP (voluntary incentive) program. Yet VAIP far less restrictive than 100% share of mind. And that program never ruled illegal. What's more, VAIP has had little if any effect in mkt so far, from what INSIGHTS sees. AB distribs still by and large hot to trot for new non-AB brands. Meanwhile, ABI-SAB approved in EU, after it agreed to divest SAB's biz there, approved in Australia, Canada and recommended in South Africa with conditions. So ABI getting ducks in a row, mkt by mkt, but has sold off over 20% of deal so far.

Uneven trend in 2016 numbers hit 3 down drafts in most recent data, even while yr-to-date trends still suggest industry up. Domestic brewers' taxpaid shipments down near 2% in Apr, estimates Beer Inst's Michael Uhrich, cutting 4-mo gain to 156K bbls, 0.3%. In off-premise scans, another nasty number from Nielsen: for 4 wks thru May 21 volume down 4.2% in all-outlet + convenience data. But gotta note same period last yr included some buy-in for Memorial Day, not in this yr's figure. So another holiday imbalance. Yr-to-date, Nielsen shows volume just +0.1% thru May 21. That's soft. But not as soft as on-premise. GuestMetrics reports beer volume -6.5% for 4 wks thru May 15; -5.3% for 52 weeks. Beer continued to lose share to spirits, a full pt in latest mo. Meanwhile, retail consultant Bump Williams led off recent missive to clients: "I'm not sure what happened, but the lights for the Beer category went 'out' all of a sudden.... My guess is that a LOT of Beer distributors and brewers from around the country are feeling the YTD Blues of soft business and it's my fear that a lot of them won't be able to make up the lost volume and finish up in the black for 2016." Trends Bump's hearing around US: "between -9% and -1%" YTD. On more positive note, Apr import # not out yet, but Jan-Mar gain of 510K bbls keeps US YTD trend up 1%+. Also, Beer Inst estimate of state totals +1.5% thru Apr.