Topline for summer ’16 in IRI multi-outlet + c-store (MULC) scans: not too bad.  For 12 wks beginning mid-May thru Aug 7, IRI shows volume +1.5%, $$ sales +4%.  Each of those summer trends about half-pt ahead of yr-to-date trends in same outlets.  High end drove gains, of course.  Of 6-mil-case gain, imports grabbed additional 4.2 mil cases, superpremiums +2.2 mil cases, craft +1.4 mil cases and FMBs +1.3 mil cases.  High-end trends ranged from +5.4% for craft to +10.2% for superpremiums.  Domestic premiums dropped almost 2 mil cases, 1.1%.  Miller Lite and Coors Light each up slightly (400K cases in toto) while Bud Light shed 1.2 mil cases.  Subpremiums fared a bit better in IRI than premium segment: down 750K cases, 0.9%.  Cider down 12%, almost 400K cases.  Dollar sales up in each segment except subpremiums (-0.8%), cider and NAs.  Domestic premiums eked out 0.3% $$ gain, but imports grabbed nearly half of $$ gain, up $163 mil of total beer increase of $344 mil.  Each high-end segment boosted $$ sales 9-11%.  All in, avg price up about half a buck per case-equivalent, 2.4%, again driven by trade up.  Premium prices up about quarter per case.  Subpremium prices didn’t budge over the summer, according to IRI.

Who’s winning the summer so far?  Constellation, natch.  Volume +14.3%, $$ up almost 18%.  It grabbed over 2/3 of 6-mil-case industry gain and near half of total $$ gain for 12 wks.  CBBD picked up 1.3 share of $$, 0.9 share of volume over the summer.  No other top 25 supplier gained more than 0.12 share of $$ or more than 0.09 share of volume, or more than AB’s 505K-case gain.  That’s pretty remarkable.  AB trends 0.9, 0.7 better than MCs in $$ and volume respectively. MC, HUSA and Boston each down 1-2% (volume) for the summer so far. Diageo Beer Co, Yuengling, NAB and New Belgium up low to mid-singles.  Mike’s an outlier, posting a near-10% gain.  Not only Boston, but several craft brewers lost volume over the summer, including Sierra Nevada, Gambrinus and Craft Brew Alliance.  Lagunitas up 20% tho, Bell’s up 32%, Stone up 18%.  Founders and Firestone Walker flew, as did Alchemy & Science, which IRI separates from Boston.  Big brand trends mostly followed ’16 pattern.  Michelob Ultra, Modelo Especial and Corona Extra combined for 6.4-mil-case gain.  Stella, Heineken and Dos Equis each up, with Stella far outpacing the others.  One summer shift: most top subpremium brands did better over summer than yr-to-date, possibly connected to flat and/or lower pricing.          

Topline for summer ’16 in IRI multi-outlet + c-store (MULC) scans: not too bad.  For 12 wks beginning mid-May thru Aug 7, IRI shows volume +1.5%, $$ sales +4%.  Each of those summer trends about half-pt ahead of yr-to-date trends in same outlets.  High end drove gains, of course.  Of 6-mil-case gain, imports grabbed additional 4.2 mil cases, superpremiums +2.2 mil cases, craft +1.4 mil cases and FMBs +1.3 mil cases.  High-end trends ranged from +5.4% for craft to +10.2% for superpremiums.  Domestic premiums dropped almost 2 mil cases, 1.1%.  Miller Lite and Coors Light each up slightly (400K cases in toto) while Bud Light shed 1.2 mil cases.  Subpremiums fared a bit better in IRI than premium segment: down 750K cases, 0.9%.  Cider down 12%, almost 400K cases.  Dollar sales up in each segment except subpremiums (-0.8%), cider and NAs.  Domestic premiums eked out 0.3% $$ gain, but imports grabbed nearly half of $$ gain, up $163 mil of total beer increase of $344 mil.  Each high-end segment boosted $$ sales 9-11%.  All in, avg price up about half a buck per case-equivalent, 2.4%, again driven by trade up.  Premium prices up about quarter per case.  Subpremium prices didn’t budge over the summer, according to IRI.

Who’s winning the summer so far?  Constellation, natch.  Volume +14.3%, $$ up almost 18%.  It grabbed over 2/3 of 6-mil-case industry gain and near half of total $$ gain for 12 wks.  CBBD picked up 1.3 share of $$, 0.9 share of volume over the summer.  No other top 25 supplier gained more than 0.12 share of $$ or more than 0.09 share of volume, or more than AB’s 505K-case gain.  That’s pretty remarkable.  AB trends 0.9, 0.7 better than MCs in $$ and volume respectively. MC, HUSA and Boston each down 1-2% (volume) for the summer so far. Diageo Beer Co, Yuengling, NAB and New Belgium up low to mid-singles.  Mike’s an outlier, posting a near-10% gain.  Not only Boston, but several craft brewers lost volume over the summer, including Sierra Nevada, Gambrinus and Craft Brew Alliance.  Lagunitas up 20% tho, Bell’s up 32%, Stone up 18%.  Founders and Firestone Walker flew, as did Alchemy & Science, which IRI separates from Boston.  Big brand trends mostly followed ’16 pattern.  Michelob Ultra, Modelo Especial and Corona Extra combined for 6.4-mil-case gain.  Stella, Heineken and Dos Equis each up, with Stella far outpacing the others.  One summer shift: most top subpremium brands did better over summer than yr-to-date, possibly connected to flat and/or lower pricing.          

ABI added new ad agency, Droga5, to work on its Best Damn brands, just shortly after “the agency part[ed] ways with Heineken USA,” reported AdAge.  Interestingly, ABI continues to show “willingness” to add to roster of agency partners “rather than consolidate,” as co uses separate agencies for Bud, Bud Light, Mich Ultra and “recently began reaching out to agencies for Shock Top.”  So far Best Damn has only “received modest marketing support” and this hiring “could signal a new wave of investment in the brand,” mag opined.  A little over halfway thru the year, Best Damn sales, including Root Beer, Cherry Cola and Apple Ale, almost as much as MillerCoors’ new Henry’s alc soda franchise.  Best Damn brands collectively sold incremental 1.1 mil cases, just about 200K cases less than Henry’s Orange and Ginger in IRI MULC thru Jul 10.  Keep in mind, MC’s got Cherry flavor comin’ out now too.   

Previously, Droga5 worked on HUSA’s Strongbow, Newcastle and Amstel Light brands, including more recent Strongbow campaign with Sir Patrick Stewart and Newcastle’s digital-only Super Bowl ads.  HUSA is switching Strongbow over to “new global campaign that will be led by a central agency,” Cloud Factory, senior brand director for Strongbow, Jessica Robinson, said in statement to AdAge.   (Editor’s note: Heineken brand has shifted to some US-focused messages this yr from earlier, more global approach).  Gotta note, Strongbow franchise consistently growing at a 20% clip all year in Nielsen data.  But in most recent 4 wks thru Aug 6 volume up just 1%, $$ up 2%.  Then too, despite gaining “plenty of earned media” thru Super Bowl digital only campaign, Newcastle saw media spend more than cut in half to just $37,000 in 2015, according to Kantar Media Group.  Recall, Newcastle Brown sales still declining double-digits, even as Heineken brand improved in most recent scans.  

Just as Tenth & Blake finally got in craft m&a game in a significant way, its sales sprung some leaks.  Total T&B sales down 12% in Nielsen all-outlet for 4 weeks thru Aug 6.  Now down 7% yr-to-date.  That’s soft, especially since all above premium beers are trending +7% in Nielsen.  Recall, MC reported its total above premium biz down low single digits in 2d qtr, boosted by shot-in-arm from all incremental Henry’s Hard Soda.  But its above premium mainstays, Blue Moon, Leinie, & Redd’s, all declined.  Blue Moon declines mainly about its seasonals and variety pack, MillerCoors said. But in latest 4 weeks, even Blue Moon Belgian White down 5% in Nielsen.  Belgian White still up 0.5% yr-to-date.  Similarly, Leinenkugel shandy biz up slightly in Q2, MC said, so Leinie softness about its other brands.  Yet in latest 4 weeks, Leinie’s shandy franchise down 7.5%.  MC has very little biz in imports, but its lead brands there also barely up yr-to-date.  Meanwhile, fast-growing Saint Archer is expanding to Nevada, which will provide some incremental volume.  And other craft acquisitions will add new mkts in time.  But MillerCoors will need more than expansion of its shiny new craft acquisitions to get back to healthy trends above-premium.    

AB’s got some hurtin’ above premium brands too.  Shock Top franchise down 18.5% for last 4 weeks, 13% YTD.  And of course, Ritas, Bud Light Platinum and Bud Light Lime all down double digits again (BLL had improved for awhile). Difference so far is that AB has two serious high-end horses now: Michelob Ultra up 22.5% YTD and Stella up 16%.  Plus its craft acquisitions have already kicked into gear, while MC just did most of its deals.  

Choice Brands of Ohio in Mingo Junction will sell to contiguous Muxie Dist of Bellaire.  And Iron City will sell to MC megadistrib Superior.  Deals reportedly expected to close at end of Sep.  Both distribs, one principally AB and the other with NAB, HUSA, Pabst and other suppliers, owned by Bellas family for many decades (Iron City since 1937).  Michael Bellas is widely known in the industry as consultant who founded and leads Beverage Marketing Corporation and puts on annual conference called Beverage Marketing Forum.  Mainly, this is yet another deal combining two smaller AB distribs in sparsely populated parts of a big state.  Each of Choice Brands and Muxie sell 750-800,000 cases of AB, INSIGHTS understands.  Choice and Muxie each also sell Yuengling, New Belgium and much more.  In fact, Muxie reportedly has over 80 share in its rural territory and even sells MillerCoors brands and Constellation, which leads to other interesting angles.  Could DoJ consent decree ultimately play a role in Muxie getting approved by AB to do this deal?  Stay tuned. 

In plan to “accommodate today’s needs and the future needs of the business,” as Constellation Brands Beer Division prexy Paul Hetterich put it, CBBD will move its Chi hq down Dearborn St in Mar 2018, reports Chicago Tribune.  CBBD not adding space, necessarily, but will try to figure out way to “fit ourselves into a new space” to accommodate staff that’s already grown from 211 in 2014 to 336 now, said Paul.  New offices expected to take up 5 floors of building’s 37 stories, including outdoor patio space.  And rest assured, “there will be a new iteration of Bar Salud, where “employees sometimes gather after work for cervezas and tequila,” Trib notes.  That custom a “key part of our culture,” said spokesman Mike McGrew, which helps employees “build strong bonds that enhance teamwork and live our brands.”

Suit filed in late 2014 by trio of small Texas brewers, Live Oak, Peticolas and (notably) Revolver, against Texas Alc Bev Commission got hearing Monday to lay out arguments. Brewers seek elimination of language that specifically prohibits them from selling territorial distribution rights to distribs. Live Oak claims it did just that prior to enactment of law with that language two years ago, according to Dallas Morning News. Barring sales of distrib rights “enriches distributors at the expense of craft brewers,” an atty with Institute for Justice, firm arguing case for brewers, said at hearing. “The state has no legitimate interest in preventing craft breweries from selling their distribution rights,” another IFJ atty argued, per Austin Monitor. Yet “the government’s interest is in preserving the integrity of the three tier system,” atty for TABC insisted, claiming that payments from one tier to another jeopardize separation of tiers as Austin American-Statesman wrote. Though no money at stake, in some ways very “core” of beer policy at issue, as veteran alc bev atty Drew Jaglom wrote when suit first filed (see CBN vol 5, no 84 and 85, from Dec of 2014 for our initial coverage). Judge promises a decision in 2 wks. Sit tight. 

Beer prices continued to outpace general inflation even as they’ve   slowed slightly last 3 months. Consumer price index for beer rose 1.8% in Jul vs yr ago, per latest gov’t stats compared to 0.8% increase for all items. While still solid, that’s below CPI beer price increases of 1.9% in Jun, 2.1% in May, 2.3% in Apr.  CPI increase for spirits was unchanged from previous month, up 0.5% in Jul while wine prices were flat again.  YTD thru Jul, beer prices up avg 1.9% vs 1% increase for all items, 0.3% for spirits and just 0.1% for wine.  

Total beer volume down 0.9% for 4 weeks thru Aug 6 in Nielsen all outlet data, shaving a tenth off yr-to-date trend, now up 0.7%.  Not to make too much of 4 weeks, but Not Your Father’s Root Beer is clearly not cycling last year’s numbers.  Franchise down 35% for last 4 weeks (meaning Root Beer down more), tho still up 173% yr-to-date.  And while Bud Light keeps rolling out new ads, its volume loss accelerated last 4 weeks.  Down 4.7%.  Now down 2.5% YTD.   Coors Light (-1%) and Miller Lite (down 2.8%) also softened considerably last 4 weeks.   Constellation the Steady Eddy.  Up 13.7%, compared to 14.5% YTD.  It gained over 1 share of volume and 1.4 share of $$ in most recent period.  Interestingly, Heineken brand is one of few big brands that actually markedly improved its trend last 4 weeks.  Heineken brand among top 10 growth brands in Nielsen last 4 weeks.  That’s gotta be first time in a long time.  Heineken volume up 3% for 4 weeks, compared to 0.9% growth YTD.  

Total beer industry SKUs dipped to 13,313 in IRI multi-outlet + convenience for 26 weeks thru July 3.  That’s down slightly from 13,657 at the end of 2015.  Beer SKUs have of course rapidly proliferated for years and years. Indeed, SKUs climbed from 10,919 at the end of 2013 to 13,657 at end of 2015 in IRI MULC.  (One distrib dubbed this phenomenon “SKUmageddon” to INSIGHTS years ago; term then spread widely.)  So this slight decrease is striking, but need more info before saying that’s the peak, as brewers typically release many new SKUs in 2d half of the yr.  At very least this is striking departure in pattern of recent yrs.

Explosion of craft SKUs and brands clearly evident in this data.  Craft SKUs climbed 2406, 38% between 2013-2015.  All other SKUs declined by over 700 in 2 yrs. There were 8784 craft SKUs at end of last yr, representing 64% of all SKUs.  Craft brands grew by 42% in 2 yrs, with many just available in their local or regional geographies.  IRI tracked 6181 craft brands in IRI at the end of 2015, representing almost ¾ of all brands sold across US.  So far, Craft SKUs down a little less than 1% in 1^st half in 2016.  Import SKUs dropped more; down 147, over 7% in 1^st half.  In recent weeks,  INSIGHTS has heard several times that fall resets will be brutal on established craft.  So this could be inflection point.