Next up in parade of flavored malt bevs hitting market generally and from MillerCoors specifically: Easy Tea Co. The “lightly-carbonated” hard tea clocks in at 5% ABV and promises “just the right amount of sweetness,” brand mktg mgr Melissa Wagamon said in statement. So far focused on single-serve at c-stores and liquor stores, MC dropped 24-oz cans this month in DE, KY, ME, MA, NJ, parts of NY, OH and WI.

If you aggregate all the alcoholic sodas, including those that label themselves “craft” like Not Your Father’s Root Beer, or “hard” like Henry’s, “segment as a whole” is “very steady” at 1 share of $$ in recent weeks, Small Town Brewery prexy Greig Debow told INSIGHTS.  While it’s “not expanding” these days, that’s “nothing to sneeze at,” Greig added.  He still sees a “lot of runway” especially since “broad groups of people” are not yet aware or have yet to try these products, he reiterated.  Even with onslaught of big brewer competition, Small Town retains #1 position in $$ sales, sez Greig.  At 31-32 share.  But Henry’s passed it in last 13 weeks in volume.  NYFRB gets about a $10 per case price premium, noted Greig, without “one consumer complaint.”  So doesn’t make sense to “take profit out” through discounting. 

Not Your Father’s Vanilla Cream Ale is off to fast start in nation’s largest retailer, Wal-Mart, said Greig.  It’s already at 70% of Root Beer totals there just 5 weeks in and it’s “not cannibalizing,” according to Greig.  Next batch of innovations from Small Town will “push the boundaries,” Greig said, but he’s not yet willing to share details.  True, Small Town will “hit some rough comps” between now and Jan and will likely be down for the full year.  “No way we’re going to touch last year” in 2d half, acknowledged Greig, when “we were the only game in town.”  But NYFRB still at good level with strong position in segment; at $70 mil of sales at retail in Nielsen through July 16.  

Chi metro area AB megadistrib Lakeshore Bev has struck another deal to buy one of unconsolidated Constellation/Pabst distribs, 1-mil-case Fred W. Losch Bev.  Deal expected to close in Oct, pending supplier approval.  Most of biz is Constellation, INSIGHTS understands, but other significant suppliers include Pabst, HUSA, Bell’s and Revolution.  Recall, Lakeshore bought 2-mil-case Central Dist in early 2015 and acquired about 100K cases of Bell’s from Skokie Valley earlier this yr.  So it is now around 25 mil cases.  

In move aimed to “convey Diageo’s brewing credentials and commitment to the broad category of premium beer,” Diageo Guinness USA is dropping “Guinness” from its name and replacing it with “Beer Company.” New name reflects focus on broader, growing portfolio that also includes other beers and flavored malt bevs, a category DGUSA helped to launch 15 yrs ago.  “This change truly represents a culture and mindset shift for Diageo’s US beer business,” said Tom Day, Diageo Beer Company USA’s prexy.  Guinness will continue to “play an essential role” in portfolio, Tom assured, but new name will “help highlight” other brands like Smirnoff Ice, Smithwick’s and Harp.  Then too, DBCUSA will expand portfolio and join burgeoning hard soda segment with line under Quaker City Malting Co (with partner, “drinks architect” Steve Grasse) and intro Smirnoff Spiked Sparkling Seltzers.  In addition, Smithwick’s and Harp will get increased investment.  And DBCUSA has limited release Smithwick’s variant in collaboration with NYC sports talk radio personalities Boomer Esiason and Craig Carton on tap to support charitable partner.  Recall too, Smirnoff Ice Electric line and other flavor spin-offs intro’d earlier this yr.  So malt alternative space gettin’ mighty crowded for segment still well under 5 share of total malt bev volume.

Brand Trends; Innovation Gains; “Accelerating Momentum”; “Great Buzz” Prexy Tom Day took time out from Diageo’s internal and distrib mtgs in Vegas this week to provide some details and trends on key Diageo Beer brands/families. Some good news on Guinness, which Tom repeated would “continue to be in forefront” of Diageo Beer.  Guinness Nitro IPA is #1 performing new beer brand for 52 wks thru mid-Jul in $$, according to Nielsen, even tho it’s only been in mkt for 8 mos.  All in, Guinness brands up 8.2% in volume, 8.8% in value for 52 weeks and in-line with craft segment.  Take out craft hard sodas and Guinness outpacing segment, Tom said.  Guinness has gained share 11 of last 12 Nielsen periods.  Comin’ next: a Rye Pale Ale in Sep and an Imperial Stout (Antwerpen Stout) at end of Sep/early Oct.  On-premise, Guinness booked “slight share gain” last 4 and 12 wks in GuestMetrics data tho still trending down.  For Harp, Tom promised distribs “renewed focus” on “Half & Half” program in Irish pubs and more to come on Smithwick’s collaboration noted above.  Collaboration for Harp in works as well.

Moving to FMBs, “what’s not new?” on Smirnoff Ice, Tom asked.  Family’s got new pkgng rolling out and Spiked versions (8% ABV) in mkt.  Electric Berry is #5 FMB innovation, #16 total malt bev innovation for 52 wks (measured in value, Nielsen data) even tho only out for 12 wks.  With Smirnoff Spiked Sparkling Seltzer, Diageo has dropped “Ice” moniker but (again) leveraging #1 vodka in US in its name.  “Momentum is accelerating” for Smirnoff Ice brands, Tom said.  For 52 wks, $$ up 3.6%, volume +1.8%.  That’s bumped up to +4.6% and 2.4% respectively for 4 wks.  Asked about FMB segment’s potential, Tom would not put number on where he thinks FMBs can go in US since it’s such a unique mkt that’s “constantly changing.”  Did note that FMBs represent “unique opportunity to provide variety and flavor” to consumers who demand both.  All in, Tom focused on “new mindset” for Diageo Beer Co USA, broadening portfolio, better numbers and “great buzz” among distribs in Vegas.    

Double-digit Mexican import gains continue to drive total import strength, in turn boosting overall industry volume in 1st half. Import shipments jumped another 7.1% in June, 205K bbls, Beer Inst economist Michael Uhrich reports today from Commerce Dept data. So June import and Mexican trends, +15% for month, slightly slower than earlier in yr but still well ahead of domestic shipments. Belgian shipments kicked into higher gear in June, +17%; Irish shipments +13%. Yet Dutch, Canadian, German and UK shipments each down double-digits for mo. Thru 1st half, imports up 7.7%, over 1.2 mil bbls. But Mexican gain still bigger than total import gain for 6 mos: +1.8 mil bbls, 18%. Ireland remains only other major importing country up for the yr, +16%, 68K bbls. Dutch decline more than doubled after very soft June, now off 4% for 6 mos, over 90K bbls. Belgian shipments -18%, Canadian shipments -26%, UK shipments -31% thru 1st half. German and Polish shipments each down slightly for year now too. Despite all those negative trends, overall growth of import category pushed total US shipments up over 1.3 mil bbls thru June, +1.3%.

Innovative tech firm Drizly that brought 24-hour alc bev delivery to consumers and bad boy BrewDog, building Ohio brewery, going for the gold to fund their bizzes.  Drizly just got $15 mil from venture capital firm Polaris Partners to expand its service in more cities.  Over 4-yr history, Drizly’s attracted $32.8 mil in total investments and now in 23 cities.  Currently “on track to see 4.8X year over year growth in users, orders and revenues,” it said in release announcing new funds.  Drizly also shared current alc bev shares with Geekwire, based on “percentage of orders.”  Across all mkts, 39% of Drizly purchases are wine, 29% beer, 19% liquor, and 13% “extras.”  In Seattle, where Geekwire based, beer leads with 35% of purchases, wine at 27%, liquor at 24% and extras are 14%. 

Meanwhile, Brewdog launched $50 mil crowdfunding campaign, bringing its Equity for Punks program to US to help fund its US biz and Ohio brewery, expected to open late this yr.  Brewdog already raised over $34 mil in UK via 4 crowdfund rounds and boasts 46,000 “equity punks.”  With typical understatement, co-founder James Watt sez “equity for punks is a completely new business model in the States – it’s a revolution in small business finance…. Few companies have been so bold as to turn their backs on traditional financial institutions in favour of a brave new world of community-driven business.”   Several breweries, distilleries and wineries have already gone the equity crowdfund route here in US.  But recent presentation at natl mtg of state liquor admins included watch outs from industry attys about possible pitfalls of crowdfunding, especially in states like Tex that bar any cross ownership of tiers.  Brewdog shares cost $47.50 per and you gotta buy at least 2.  In exchange, shareholders get equity and discounts in Brewdog pubs.  

This morning, ABI announced mgt structure after it takes over SABMiller.  To no one’s surprise, current ABI mgt “will dominate the 17-person executive board,” as Bloomberg noted, which “contains one SABMiller manager.”  Current managing director of South Africa Mauricio Levya will take over new Middle Americas region, consisting of Mexico and Central America.  “The AB InBev executive under the spotlight” is Richard Tadeu.  He’s 40 yrs old, Brazilian, graduate of Harvard Law and currently zone prexy of Mexico.  But he’ll become zone prexy Africa, “responsible for spurring growth on a continent where about 65 million people are due to reach the legal drinking age by 2023,” according to Bloomberg.  North American prexy João Castro Neves stays in his current role, running what remains ABI’s biggest region.  But Jan Craps, currently prexy of Canadian biz, reporting to João, will become prexy of Asia Pacific South which includes Australia, New Zealand, India, Vietnam and  other South and Southeast Asian Countries, sez ABI.   

ABI will “phase out” SABMiller “hubs” in Miami, Hong Kong and Beijing within a few mos “after completion of the combination,” it said.  A few key SABMiller execs will stay for transitional period and a UK “presence” will be “retained… for people working on integration and business continuity.”  But that UK presence likely to be a whole lot smaller as UK Telegraph article notes. Working office employs 523 and will be open only for “transitional period” and SABMiller has 51 more folks at hq in London.  But ABI hq will continue to be in Belgium, managed from NY.  “We can confirm,” an ABI spokesman told Telegraph, that “SABMiller’s existing UK locations will be significantly impacted after the combination completes. Any changes affecting employees in the UK would be implemented with due respect for applicable legal considerations and consultation requirements.”  Anyway you cut it,  a whole lotta change as SABMiller transitions to ABI control.   

“Volumes were better, shares were better” and all in it was one of ABI’s best qtrs in quite awhile, AB ceo João Castro Neves told INSIGHTS after quarterly results released last Friday, adding that gross margin expansion “very strong.”  AB looking to “get to a better place” in a “sustainable way,” he added, pointing to Canada as a positive example of what’s possible.  ABI grew both the topline and share there in 2015, as AmBev noted in its release. AB looking for same kinds of results in US, “growing share profitably.” ABI estimates it lost 35 basis points of share in Q2, an improvement of approx 25 basis points.  Recall, US EBITDA up in Q2 and 1^st half, after declines in 2014-15.

Leading the charge for AB, Ultra up over 20% in qtr.  But even Bud brand grew in month of Jun, following launch of America campaign. STRs up 1.6% for mo, said Bud veep Ricardo Marques; Bud brand grew in 5 of 7 regions and Bud gained share in 2 regions, he added, “further extending the brand’s best trends in over a decade,” with “America packaging as the catalyst.”  Many AB distribs tell INSIGHTS they are up on Bud, but it’s still down 1.7% yr-to-date thru Jul 23 in Nielsen all-outlet.  However, it was up 1.5% for 4 weeks thru Jun 25 and down just 1.1% for last 4 weeks. So on a better path.  Bud Light still kinda soft, down 2.3% for 4 wks and YTD in Nielsen all-outlet, tho AB cites improving brand health metrics from new campaign.  AB doing well with its aluminum bottles.  Just started with Mich Ultra in aluminum bottles in Tex.  AB has already built out capacity from 1 to 3 mil bbls of aluminum bottles, and will expand to 6 mil bbls, said João.

Meanwhile, AB total hi end biz up 10% in IRI this yr, according to numbers AB shared, including Stella up near 15% and its acquired craft brands up near 40%.  Total AB STRs down 0.9% in Q2, actually a softer trend than Q1, when STRs down just 0.3%.  But AB share performance better as total industry tuffer in Q2.  One clear and consistent message from ABI recently, from both João and ABI ceo Brito on conference call: AB will be “doubling down” on investments in US “our most important market,” as João said.  He pointed to increased investement in Stella, which led brand back to double digit growth.  US mktg investment up 18-20% in qtr and AB starting to feel like it’s seeing results.  

“Almost every single one” of ex-MillerCoors veep David Colletti’s co-conspirators have engaged in plea negotiations, case prosecutor told fed judge yesterday, reports Law360.  Recall, Colletti and 7 others charged with defrauding MC of over $8.5 mil via false invoices sent via 3-party vendors for MC mktg events that never happened.  Colletti and 2 others have already pled guilty to wire fraud and face up to 20 yrs in prison.  Looks like others ready to make a deal.  Prosecutor asked for status mtg in the fall to assess defendants’ plans and to set trial date in case it’s necessary.  Colletti and any others convicted “will split more than $8 million in restitution, according to court records,” Law360 points out. Do they have the dough and will MC ever get it?                    

Bottle bills seem like such a quaint issue these days.  It’s hard to remember when state debates raged over this issue.  Now there’s news.  Oreg, first state to pass a bottle bill (1971), will also be first state to change its basic deposit per bottle come April 1, 2017, reports AP, when it doubles from a nickel to a dime.  (Mich is only other state with a dime deposit.)  Move bein’ made after legislature decreed in 2011 that if redemption rates fell below 80% for 2 straight yrs, deposit would double.  That happened.  State’s giving industry 8 mos to prepare.  And there are lotsa moving pieces.  Here are some of ’em, identified by AP: 1) Labels have to be updated, which neither craft brewers nor big brewers will enjoy; 2) Someone’s gotta pull any containers still labeled with nickel deposit; 3) Even so, some folks who paid a nickel will get back a dime; 4) There’s not enough redemption centers to handle what’s expected to be significant increase in redemption (rates fell from 90%+ to 64%); 5) Retailers expect even more Wash and Ida consumers to cross state line to redeem containers they never paid a deposit on; 6) More containers will be covered, including tea, coffee, cider and more; 7) Retailers also expect more folks to go thru neighborhoods to collect containers to redeem; 8) Even so, more competition and more incentive for consumers to redeem their own containers will put a hit on current “dumpster divers.”  One told AP consumers will “save them and take them in themselves now that they’re worth more.  Sometimes I come here [downtown Safeway] with $15 worth of bottles but I don’t think that’ll be available anymore.”

Oreg Distribs “Not Alarmed” About Deposit Doubling  Paul Romain, long-time head of Oreg Beer & Wine Distrib Assn, tells INSIGHTS that beer distribs “aren’t alarmed” about doubling.  Indeed, they agreed to stipulation as they saw redemption rates dropping, which occurred in large measure as bottled water came into deposit system.  OBWDA members don’t think distribs will be hurt financially.  That’s even tho there’s some concern among brewers and distribs about immediate price hike to consumer of $1.20/case.  Distribs in Oreg, as in most deposit states, use unredeemed deposits to operate the system.  A dime deposit with 85% redeem rate generates same money as nickel deposit at 70% redeem rate, Paul points out.