Growing importance of Latino mkt underscored on MC’s Behind the Beer blog this week, which 3x published pieces on its efforts in that arena (blog often used in effort to amplify MC new product intros and media campaigns or articulate its positions).  First, MC wrote that Sol Chelada “off to afast start,” saying that Sol Chelada, ranks as #3 new item in Nielsen all outlet data thru Mar 30.  “That’s despite not being launched until Feb 1 and selling in a single SKU-a 24 ounce can.”  Consumer and retailer response “off the charts,” sez MC.  Meanwhile, following 200% growth in 2018, Sol “aims to keep its hot hand,” with new media. It’s up another 142% YTD thru Apr 6 in Nielsen sez MC. A 3d feature today is more general focus on demographic shifts, with nearly 59 mil Latinos in US in 2017, “playing a larger role in the nation’s culture, politics and economy.  And they’re increasingly reshaping American beer sales and the marketing strategies of brewers,” wrote MC. 

Sol and Sol Chelada Still Small in Segment, Despite Rapid Growth  But despite many millions spent, MC (and AB) still only have small presence in Mexican imports, the biggest growth segment of the beer biz for last 5 yrs and 12 share of volume.  Having tripled last yr and still more than doubling, Sol is 0.7 share of Mexican import $$ in IRI multi-outlet + convenience data yr-to-date thru Mar 24.  Sol Chelada all incremental, but so far it’s just 12K cases in IRI MULC YTD and .01 of Mexican import $$.  Between the 2, how much higher can MC go in segment?  AB also under 1 share of Mexican imports. 

Blue Moon “Mandated to Replace Shock Top” at Red Lobster  More news from MC on Blue Moon, its largest above-premium brand, one that started to make some inroads among Hispanics a few yrs back, (tho not much said about that in last couple of yrs).  Blue Moon “mandated to replace Shock Top in all 641 Red Lobster locations that have three or more tap handles,” wrote MC’s Nigel Tordoff to distribs.  Nigel called this a 100,000-case oppy.  Blue Moon Belgian White lost 1 mil cases, 3% in 2018, INSIGHTS estimates.  And down 4% yr-to-date thru Apr 6 off premise in Nielsen all outlet.

Not surprisingly, AB fired back at MC corn syrup lawsuit with both barrels and a ton of paper.  Ten documents filed in Wisc fed ct ask it to: 1) dismiss MC lawsuit claiming AB corn syrup ads deliberately mislead, cause confusion and harm MC; 2) deny MC request for injunction forcing AB to halt current ads, run corrective campaign and pay damages. (Almost identical article appears in latest Beer Marketer’s INSIGHTS.)

As it has all along, AB asserts its ads true, merely state what MC admitted before and after the ads, that Miller Lite and Coors Light use corn syrup.  “Such truthful advertisements do not violate the law,” AB insists.  Similarly, comparative ads that “call attention to ingredients of competitive products,” are perfectly legit under same Lanham Act that MC claims AB is violating.  Regarding charge that ads imply MC brands have high fructose corn syrup, AB sez “a Plaintiff cannot assume that consumers will take a truthful statement and leap to false conclusions about other matters.” 

Interviews that Bud Light chief Andy Goeler gave to media not “actionable” in first place, no allegation any consumers swayed by them and they were “grossly mischaracterized” by MC.  Rather than “overtly” admitting consumers confuse corn syrup with HFCS, when Food & Wine asked if AB aimed to “tacitly imply” similarities of corn syrup/HFCS, Andy said: “No.  Absolutely not.  Absolutely not.  And I disagree with your point about consumers not knowing.... These people are very tuned to ingredients.”  Andy “never acknowledged” consumers confused, AB asserts, and never said consumers believed corn syrup in final product.  And no ads made any reference to HFCS.  MC claims consumers confused, but provided no evidence of “actual consumer confusion,” AB points out.  “Anecdotal evidence of confusion is insufficient.”  Nor did MC plead any “facts” or “examples” of actual damages or loss of good will, AB argues.  That’s fatal to MC request for relief and injunction.  MC’s claim that AB “diluted” its trademarks also falls, AB argues, since Lanham allows “fair use” of competitors’ marks in comparative ads. 

Legal vs Marketing Battle; “Game On”  Per usual in legal battles over marketing issues, AB uses its motions to market a bit.  For example, “Bud Light leads with transparency,” AB motion to oppose injunction claims early on, “while MillerCoors only plays lip service to it.”  While MC materials have admitted for yrs it uses corn syrup as ingredient, “it has spent the last ten weeks trying to spin the fact” and asks court to declare those admissions “misleading” when Bud Light sez it.  Then too, MC claims damages “even though it has told the marketplace that it has benefited from the ads.”  While MC points to statements from Andy Goeler allegedly linking corn syrup to HFCS, AB cites email from MC chief communications officer Pete Marino to AB’s corporate affairs veep Gemma Hart during the Super Bowl that read: “Game on....  This is going to be a lot of fun. You gave us a gift in some way, so thank you.... I love this stuff.”  MC also subsequently tweeted “happy to have this fight any day of the week.”  Nor can MC argue harm, AB sez, when it publicly claimed its brands held share trends, which MC blog noted after Super Bowl.  AB also provides background on decisions to disclose ingredients, Miller Lite ad comparing carbs and calories, mktg back-and-forth after Super Bowl, numerous affidavits from execs, mktg expert and (much) more.  It attacks MC’s own mktg expert, natch, and can’t help but note that while MC claims 18% of people who wrote to MC after SB said they’d “end or decrease” purchases,  that was “32 total people out of the approximately 100 million who watched the Super Bowl” or “hundreds of millions” who saw ads.  You can’t claim confusion, AB asserts, “on such an infinitesimal fraction of the marketplace.”       

A final flourish from AB: “Ingredients matter.  They differentiate products, and consumers want to know what specifically is used to brew their beers.... If MillerCoors believes its brands’ reputation for quality has been harmed, this is due to its own ingredient decisions, not Bud Light’s decision to tell consumers about them.”  So, court should toss suit and deny injunction, AB concludes.  While court battle continues, gotta note that Bud Light’s latest ad, shown during NCAA finals, didn’t feature Corngate. And both companies are making fewer public pronouncements about Corngate these days.

Not surprisingly, AB fired back at MC corn syrup lawsuit with both barrels and a ton of paper.  Ten documents filed in Wisc fed ct ask it to: 1) dismiss MC lawsuit claiming AB corn syrup ads deliberately mislead, cause confusion and harm MC; 2) deny MC request for injunction forcing AB to halt current ads, run corrective campaign and pay damages. (Almost identical article appears in latest Beer Marketer’s INSIGHTS.)

As it has all along, AB asserts its ads true, merely state what MC admitted before and after the ads, that Miller Lite and Coors Light use corn syrup.  “Such truthful advertisements do not violate the law,” AB insists.  Similarly, comparative ads that “call attention to ingredients of competitive products,” are perfectly legit under same Lanham Act that MC claims AB is violating.  Regarding charge that ads imply MC brands have high fructose corn syrup, AB sez “a Plaintiff cannot assume that consumers will take a truthful statement and leap to false conclusions about other matters.” 

Interviews that Bud Light chief Andy Goeler gave to media not “actionable” in first place, no allegation any consumers swayed by them and they were “grossly mischaracterized” by MC.  Rather than “overtly” admitting consumers confuse corn syrup with HFCS, when Food & Wine asked if AB aimed to “tacitly imply” similarities of corn syrup/HFCS, Andy said: “No.  Absolutely not.  Absolutely not.  And I disagree with your point about consumers not knowing.... These people are very tuned to ingredients.”  Andy “never acknowledged” consumers confused, AB asserts, and never said consumers believed corn syrup in final product.  And no ads made any reference to HFCS.  MC claims consumers confused, but provided no evidence of “actual consumer confusion,” AB points out.  “Anecdotal evidence of confusion is insufficient.”  Nor did MC plead any “facts” or “examples” of actual damages or loss of good will, AB argues.  That’s fatal to MC request for relief and injunction.  MC’s claim that AB “diluted” its trademarks also falls, AB argues, since Lanham allows “fair use” of competitors’ marks in comparative ads. 

Legal vs Marketing Battle; “Game On”  Per usual in legal battles over marketing issues, AB uses its motions to market a bit.  For example, “Bud Light leads with transparency,” AB motion to oppose injunction claims early on, “while MillerCoors only plays lip service to it.”  While MC materials have admitted for yrs it uses corn syrup as ingredient, “it has spent the last ten weeks trying to spin the fact” and asks court to declare those admissions “misleading” when Bud Light sez it.  Then too, MC claims damages “even though it has told the marketplace that it has benefited from the ads.”  While MC points to statements from Andy Goeler allegedly linking corn syrup to HFCS, AB cites email from MC chief communications officer Pete Marino to AB’s corporate affairs veep Gemma Hart during the Super Bowl that read: “Game on....  This is going to be a lot of fun. You gave us a gift in some way, so thank you.... I love this stuff.”  MC also subsequently tweeted “happy to have this fight any day of the week.”  Nor can MC argue harm, AB sez, when it publicly claimed its brands held share trends, which MC blog noted after Super Bowl.  AB also provides background on decisions to disclose ingredients, Miller Lite ad comparing carbs and calories, mktg back-and-forth after Super Bowl, numerous affidavits from execs, mktg expert and (much) more.  It attacks MC’s own mktg expert, natch, and can’t help but note that while MC claims 18% of people who wrote to MC after SB said they’d “end or decrease” purchases,  that was “32 total people out of the approximately 100 million who watched the Super Bowl” or “hundreds of millions” who saw ads.  You can’t claim confusion, AB asserts, “on such an infinitesimal fraction of the marketplace.”       

A final flourish from AB: “Ingredients matter.  They differentiate products, and consumers want to know what specifically is used to brew their beers.... If MillerCoors believes its brands’ reputation for quality has been harmed, this is due to its own ingredient decisions, not Bud Light’s decision to tell consumers about them.”  So, court should toss suit and deny injunction, AB concludes.  While court battle continues, gotta note that Bud Light’s latest ad, shown during NCAA finals, didn’t feature Corngate. And both companies are making fewer public pronouncements about Corngate these days.

Not surprisingly, AB fired back at MC corn syrup lawsuit with both barrels and a ton of paper.  Ten documents filed in Wisc fed ct ask it to: 1) dismiss MC lawsuit claiming AB corn syrup ads deliberately mislead, cause confusion and harm MC; 2) deny MC request for injunction forcing AB to halt current ads, run corrective campaign and pay damages. (Almost identical article appears in latest Beer Marketer’s INSIGHTS.)

As it has all along, AB asserts its ads true, merely state what MC admitted before and after the ads, that Miller Lite and Coors Light use corn syrup.  “Such truthful advertisements do not violate the law,” AB insists.  Similarly, comparative ads that “call attention to ingredients of competitive products,” are perfectly legit under same Lanham Act that MC claims AB is violating.  Regarding charge that ads imply MC brands have high fructose corn syrup, AB sez “a Plaintiff cannot assume that consumers will take a truthful statement and leap to false conclusions about other matters.” 

Interviews that Bud Light chief Andy Goeler gave to media not “actionable” in first place, no allegation any consumers swayed by them and they were “grossly mischaracterized” by MC.  Rather than “overtly” admitting consumers confuse corn syrup with HFCS, when Food & Wine asked if AB aimed to “tacitly imply” similarities of corn syrup/HFCS, Andy said: “No.  Absolutely not.  Absolutely not.  And I disagree with your point about consumers not knowing.... These people are very tuned to ingredients.”  Andy “never acknowledged” consumers confused, AB asserts, and never said consumers believed corn syrup in final product.  And no ads made any reference to HFCS.  MC claims consumers confused, but provided no evidence of “actual consumer confusion,” AB points out.  “Anecdotal evidence of confusion is insufficient.”  Nor did MC plead any “facts” or “examples” of actual damages or loss of good will, AB argues.  That’s fatal to MC request for relief and injunction.  MC’s claim that AB “diluted” its trademarks also falls, AB argues, since Lanham allows “fair use” of competitors’ marks in comparative ads. 

Legal vs Marketing Battle; “Game On”  Per usual in legal battles over marketing issues, AB uses its motions to market a bit.  For example, “Bud Light leads with transparency,” AB motion to oppose injunction claims early on, “while MillerCoors only plays lip service to it.”  While MC materials have admitted for yrs it uses corn syrup as ingredient, “it has spent the last ten weeks trying to spin the fact” and asks court to declare those admissions “misleading” when Bud Light sez it.  Then too, MC claims damages “even though it has told the marketplace that it has benefited from the ads.”  While MC points to statements from Andy Goeler allegedly linking corn syrup to HFCS, AB cites email from MC chief communications officer Pete Marino to AB’s corporate affairs veep Gemma Hart during the Super Bowl that read: “Game on....  This is going to be a lot of fun. You gave us a gift in some way, so thank you.... I love this stuff.”  MC also subsequently tweeted “happy to have this fight any day of the week.”  Nor can MC argue harm, AB sez, when it publicly claimed its brands held share trends, which MC blog noted after Super Bowl.  AB also provides background on decisions to disclose ingredients, Miller Lite ad comparing carbs and calories, mktg back-and-forth after Super Bowl, numerous affidavits from execs, mktg expert and (much) more.  It attacks MC’s own mktg expert, natch, and can’t help but note that while MC claims 18% of people who wrote to MC after SB said they’d “end or decrease” purchases,  that was “32 total people out of the approximately 100 million who watched the Super Bowl” or “hundreds of millions” who saw ads.  You can’t claim confusion, AB asserts, “on such an infinitesimal fraction of the marketplace.”       

A final flourish from AB: “Ingredients matter.  They differentiate products, and consumers want to know what specifically is used to brew their beers.... If MillerCoors believes its brands’ reputation for quality has been harmed, this is due to its own ingredient decisions, not Bud Light’s decision to tell consumers about them.”  So, court should toss suit and deny injunction, AB concludes.  While court battle continues, gotta note that Bud Light’s latest ad, shown during NCAA finals, didn’t feature Corngate. And both companies are making fewer public pronouncements about Corngate these days.

“Increasingly we demand virtues from our vices, too,” Wall Street Journal writes today, explaining rise of craft beers explicitly aimed at athletes as recovery beverages. Small sampling includes the much-discussed bets from craft’s biggest players, Boston Beer’s 26.2 Brew and FKT Pale from Sierra Nevada-acquired Sufferfest. Also features Dogfish Head’s lo-cal IPA Slightly Mighty and pair of lower-ABV offerings from two members of Artisinal Brewing Ventures group, Sixpoint Jammer and Southern Tier Swipe Light. Note two of the 5 riff on classic German style gose, traditionally brewed with a little salt, now often touted as “electrolytes.” But science writer turned to by WSJ throws a little cold water on those additions: “it’s drilled into us by sports drinks that they’re these magic pellets, but electrolytes are simply salt, and we’re really not deficient in them at all.”  That said, this author points to 3 other (somewhat contrarian) benefits to using a low-ABV beer as a recovery bev: 1) it’s “mostly water, so it is hydrating”; 2) the carbs “are actually helpful” (even tho many of these bevs tout lower carbs than most beers); and 3) alcohol itself helps underscore “the need to relax” after a workout. “The trick is to stop at just one.”

March taxpaid shipments by domestic brewers dipped 299K bbls, -2%, estimates Beer Inst economist Michael Uhrich, with 1 fewer selling day.  That followed 0.6% drop in Feb, 1.5% gain in Jan.  For Q1, taxpaids down 194K bbls, 0.5%, Michael estimates.  Add in 7% import decline Jan-Feb and known US shipments off 567K bbls, -1.3%, very similar trend to last couple of yrs.

While large cannabis cos continue to operate at a loss, that’s not stopping ’em from investing bigtime in future oppys with assumption that cannabis will become federally legal here in the US and abroad. Canopy Growth, largest public cannabis co that’s 37% owned by Constellation, “entered into a definitive arrangement” for “right to acquire 100 percent” of US-based cannabis co, Acreage Holdings, cos announced. Yet deal can only be completed once production and sale of cannabis becomes federally legal in US, on top of pending approval from shareholders for each co and from gov’t entities. Deal currently valued at $3.4 bil “on a fully diluted basis,” albeit with very complex set of payoffs involving whole lotta ifs, ands, and whens, including “modified warrants and other rights” between Constellation and Canopy Growth. But the “why” is clear. If/when legalization happens and transaction is approved, Canopy/Constellation and Acreage “would immediately create the undisputed leader in U.S. cannabis, the only relevant market where Canopy Growth does not yet have a major presence,” according to Canopy/Acreage release. 

Acreage Holdings, founded in 2014 as High Street Capital Partners initially, touts itself for having “among the most diverse portfolios of cultivation, processing and dispensing operations in the US” spanning 20 states including 87 dispensaries and 22 cultivation and processing sites. It debuted its natl retail store brand, The Botanist, last yr with plans for continued expansion. One of the top infused beverage cos in NV, Dixie Brands, was an early investment of Acreage’s. And recall, Acreage is perhaps more dialed in politically than any other cannabis co, with series of notable ex-politicians on its board of directors, including former House speaker John Boehner, Canadian Prime Minister Brian Mulroney and ex-governor of MA William Weld (now a Republican presidential candidate).

“Today we announce a complex transaction with a simple objective,” said Canopy Growth co-CEO Bruce Linton. This “secures our entrance strategy into the United States as soon as a federally permissible pathway exists” and “will enable” Acreage to invest further in innovation and expansion across the US and beyond. Ultimately, deal “expected to create a global cannabis powerhouse with an anticipated leadership position in every targeted international market for legal cannabis sales.”

Deal Prospects Lead to Pop in Stocks for Canopy and STZ Prospects of Canopy/Acreage merger sparked spike in stocks for both Canopy and Constellation, it seems. Canopy stock suddenly up 8% to $61.65 Canadian dollars on Toronto stock exchange today alone, after gradually declining since late Jan. Constellation (STZ) stock up ~4% today to $199/share (USD) at presstime. STZ stock price still down vs last year, tho jumped $28, +15-16% in the last mo, as mkt reacted positively to latest financial qtr results as well.

Spirits category in North America “has accelerated,” wrote Macquarie’s Caroline Levy, “and share gains from beer continued,” citing industry contacts.  Largest spirits player, Diageo, is benefiting “from the stabilization” of Smirnoff, Crown Royal “spiked sharply,” plus other fast-growing brands like Casamigos and Don Julio. “We believe Diageo can continue to invest to maintain momentum.” Diageo spirits $$ up 8% for 12 weeks in IRI data thru 4/7, compared to 6.5% in 12 weeks prior.  Beer/FMBs were +9.5% for 12 weeks, compared to +13% for 12 weeks prior, impacted by Easter timing.  She raised estimates “owing to more certainty in top line trends” both in US and Latin America.

That was 1 of 2 interesting reports from Caroline this morn, the other on Constellation.  Her “industry contacts suggest that Gallo paid a very low price for STZ’s wine brands (and won the prize by getting Black Box which was not really for sale).”  STZ’s remaining wine brands have “far better sales growth prospects than before,” but “with diminished scale, STZ will have less influence with both wholesalers and retailers.”  Meanwhile, Caroline also noted “slight softening” in STZ beer in latest period, but “this should be fully reversed in the next period as Easter” later this year.  Modelo “continues to deliver remarkable growth” and Corona family is “well positioned” with Premier, Refresca and Familiar.

It’s become a mainstream media special: lengthy features on outsized potential of non-alcoholic beers, shift in generation Z drinking habits, trend towards health and wellness.  Two more appeared overnight, 1 in Financial Times, the other on Bloomberg.   “Beer That Tastes Like Beer But Doesn’t Get You Buzzed is Booming,” headlined Bloomberg, featuring UK co called Nirvana.  “Brewers throw their weight behind non-alcoholic beer,” headlined FT.  “Supermarkets in Paris and Amsterdam now have entire shelves devoted to non-alcohol beers… and their low alcohol cousins,” reported FT.  “In the UK, Ocado and Tesco sell roughly 20 types online.”  NA beers jumped 18% in last 5 yrs in Western Europe, FT wrote, citing Euromonitor.  Growth “even stronger in the UK.”  But chart shows that in US, NAs have by far least share of beer mkt compared to any mkt shown. Will $50 mil spend on Heineken 0.0, tests of Bud Prohibition or any other combo of entrants change that?  In available data, NAs growing so far this yr, $$ up solid 9%.  But it’s a modest pop for NAs following big time launch of Heineken 0.0. 

NA Beers at 0.3 Share of Mkt in IRI; AB Dominates; Heineken 0.0 Got 7 Share of NAs NA beers sold 1.1 mil cases in IRI multi-outlet +convenience data yr-to-date thru Apr 7 (IRI data courtesy of The Bump Williams Co), up 4.7%.  That amounts to 0.3 share of $$.  But $$ sales up 9%, $2.4 mil to $28.3 mil.  Heineken 0.0 sold 50,000 cases for a 4.5 share of volume, but got close to $2 mil in sales and about 7 share of $$ with higher price point.  Growth in segment basically all from 0.0.  AB has 3 biggest brands in segment that got 62 share of segment $$, covering 3 price points. Biggest brand is O’Doul’s with $$ sales down 0.8%, then Busch NA $$ up 8% and Haake Beck is #3, basically flat.   MillerCoors top NA brand is Coors, #8 in segment, under 4 share, down 4%.  Sharp’s, which started out as #1 brand, is now #10, under 2 share of segment and down 16%. 

It’s only 2 mos, but rare in recent years that domestic shipments lookin’ better than imports.  Unfortunately, neither healthy.  Import shipments down 48K bbls, 1.8% in Feb, following 11% decline in Jan, reports Beer Inst economist Michael Uhrich, based on data from Commerce Dept.  So, Jan-Feb imports down 373K bbls, 6.8%, while domestic brewers’ taxpaid shipments up 163K bbls, 0.7%.  Add ’em up and Jan-Feb total shipments

-210K bbls, 0.7%.  Recall, that’s going against easy comp of -3.2% for taxpaid-imports Jan-Feb last yr. 

Mexican shipments bounced back in Feb, but just a bit, +2%. So, still down 234K bbls, 6.3% for 2 mos.  Again, only 2 mos, but still…  Belgian shipments jumped 23% in Feb, but German shipments down.  For 2 mos Belgian/German combo flattish.  Dutch shipments down 82K bbls, 11.7% for 2 mos, despite additional 15K bbls of no-alcs.  Irish and Canadian shipments down mid-high singles, but Italian shipments +42%, supporting word that Peroni off to good start in 2019.   Finally, exports whacked again in Feb, -175K bbls, -19% for 2 mos.