Constellation made it clear thruout the meeting – enhancing innovation capabilities will be major focus going forward, even while enhancing spend against core portfolio at same time.  Innovation is “powerful fuel that can drive accelerated growth” but only “when done well,” chief growth officer Malika Monteiro explained from the stage. And Constellation is “just now tapping into potential for innovation on Mexican brands.” Indeed, co has a growing pipeline with “much more to come,” she promised. Corona Premier is prime example. 

Premier Near 8 Mil Cases; Will Get $40 Mil in Mktg; $15 Mil for Refresca  Premier blew past co’s initial expectations to become largest new brand and 3d largest growth brand in 2018, reaching 7.8 mil cases. This yr, it will raise mktg spend on Premier double digits to about $40 mil.   Corona Refresca will look for instant impactful sales growth as well, bringing in “incremental” drinkers to Corona franchise as it rolls out nationally this Spring. In fact, Refresca turned at faster rate than Mike’s Hard in test mkts. Co will spend $15 mil across all marketing, including both English and Spanish TV. And there are more oppys for innovation under Modelo umbrella, co hinted, well beyond further flavors in Chelada space such as new Limon y Sal. Underneath that, Constellation is testing and expanding multiple new products, “targeted where [current] brands can’t go.” 

Wild(ish) & Alera Tests, Western Standard Expansion, More Alera Brillante sparkling cocktails are “designed with Hispanic women in mind,” said Malika, available in grapefruit and mango flavors in 4 mkts this year. Wild(ish) hard still teas and hard seltzers clock in at 4% ABV, served in 12oz slim cans. Seltzers will test in northeast region while teas will launch in other select mkts. SVEDKA spiked seltzer test “hasn’t quite delivered on expectations,” Malika acknowledged. So co “adapted” and “adjusted positioning to go after a unique white space with higher ABV.”  (Reformulated version is 6% ABV, where AB’s Spiked Seltzer initially was before reformulating to low-calorie, low-ABV Bon & Viv). Western Standard Lager, aged in High West bourbon barrels, will further expand to 5 states total. Ballast Point Lager, with 99 calories, launching nationally. And investments in Vivify Beverages, Austin Cocktails and Jasmine’s Juicebar Cocktails last yr are just the beginning of plans to invest $100 mil in female-founded businesses. Constellation is “testing to learn” in order to “adapt and be flexible,” with ultimate goal to “build organic brands” and “get better at launching sustainable innovation.” 

Innovation within the beer category has picked up pace in recent yrs: 65% of growth in beer came from innovation last yr, up 6 pts from year prior and above avg vs across all consumer product goods (60%). Yet a whopping 85% of new products don’t succeed, and many of them “won’t exist in three years,” Malika noted. “Building new brands is hard” and “takes time, effort and investment.” Constellation vowed to collaborate with distrib and retail partners “before” ready to launch, “being smart about where to play” and “positioning our plans to add value so we can build an innovation culture together.”  More on Gold Network Summit in Beer Marketer’s INSIGHTS.

Constellation Brands Beer Division is stepping on gas to grow its biz, with substantially increased mktg and increased emphasis on innovation, execs shared at this week’s Gold Network Summit in Dallas. On heels of 25- mil-case, 9.6% growth last yr, Constellation still sees lotsa runway as industry “wave of growth” towards high end “even larger than we thought it would be,” said chief sales officer Bill Renspie.  In fact, execs touted a “thrive” mentality, instead of “survive” mentality, arguing that industry much healthier than usually portrayed. “There’s like a black cloud over this industry,” said CBBD prexy Paul Hetterich, because volume down a little bit, and “we don’t want to recognize the premiumization.” But looking at $$ sales growth and especially shift to high end, this is “still one of the brightest industries there is.”  New ceo Bill Newlands assured Gold Network that Constellation has “no higher priority” than its beer biz and will spend “even more aggressively behind our beer portfolio.” And innovation will play a “bigger role.” Read on.

Beyond Beer is increasingly the place to be.  Craft Brew Alliance joins a buncha competitors in that space with launch today of “new standalone business unit, the pH Experiment, dedicated to creating, incubating and accelerating growth with new products and experiences that put drinkers’ needs first.”  CBA’s innovation team has been exploring oppys outside beer, working with folks at Yale Center for Customer Insights and global consultancy Prophet on consumer research/insights. “What’s particularly exciting about the pH Experiment is that we’re mining a vast trove of recently acquired consumer insights and tapping into the strength of CBA’s infrastructure to anticipate and quickly deliver on emerging needs,” said Andy Thomas, ceo of CBA.  Up first:  

Pre Aperitivo Spritz, a 6.6% ABV, dry, “botanical bubbly with an herbaceous bitterness that stays unapologetically true to a classic Italian Aperitivo,” touts CBA.  Pre is gluten-free and has 1 g sugar. CBA hopes to move quickly like a startup to find innovative new products, then apply scale/distribution capability as “large craft brewer,” sez pH Experiment’s gm Karmen Olson.  Craft beer remains at “heart” of what CBA offers but as oppys arise, pH “will also explore options to partner or access resources beyond current capabilities,” CBA sez in statement, adding it targets $25 mil in revs by 2025.  CBA net revs in 2017 were $207.5 mil; 2018 numbers out tomorrow.

Craft brewers have been known to test 3-tier restrictions via expanded self-distribution and retail rights.  Craft distillers have taken note. And they’ve found some allies in state legislatures who like to use the word “archaic” when they talk about the 3-tier system.  Latest case in point: several bills floating around Florida legislature that raise the cap on craft distiller production, allow them to have multiple vendor licenses to sell their products in more locations, get tax breaks, allow more tastings and give them distribution rights, including out-of-state shipments, reports Florida Politics.  Craft distillers want “equal footing to wineries and breweries,” one of ’em told FP. Distribs and retailers are calling foul, citing 3-tier restrictions and noting Fla distribs can’t ship out-of-state. But sponsor of one of the bills used the “A” word, adding: “If it was up to me, we’d get rid of the three-tier system,” even while claiming his bill “doesn’t seek to do that.”

News that MillerCoors is “launching a creative agency review” for Coors Light is “a significant blow to incumbent agency 72andSunny,” lead agency on brand since 2015, reported Ad Age.  This is “among first major moves” under new cmo Michelle St. Jacques, noted mag, as MillerCoors looks to reverse slide for Coors Light. MC cited “the need to better connect with younger legal drinking age consumers” as key reason for review.  Current agencies working on brand “have done some incredible work but as we bring Coors Light back to what made it so successful to begin with, we’re seeing some exciting ideas from new places about how that concept can come to life,” said Ryan Reis, vp of Coors family of brands.

Olivier Goudet, chairman of the board at AB InBev and managing partner of JAB Holdings, will step down at next month’s ABI shareholding mtg, a yr before his 5-yr term ends, Financial Times reports.  Goudet and fellow partner of JAB Holding’s Peter Harf are close with key Brazilian ABI shareholders, 3G’s Jorge Pablo Lemann, Carlos Alberto Sicupira and Marcel Hermann Telles. FT cites source who sez “last year’s JAB acquisition of Keurig Dr Pepper, the coffee and fizzy drinks maker, had raised concerns on the brewer’s board that its holdings had become too close to those of AB InBev,” which is now aggressively looking beyond beer to boost its portfolio.  JAB has been on “$50 billion+ dealmaking spree” in recent yrs, including bevs, FT reminds. For their part, Goudet said only that he’ll spend more time running JAB, and ABI said “the board’s succession plan has been developed since last year and we have been working with Mr. Goudet on a smooth transition.” His successor and new members come aboard next mo.

Hot start to 2019 Nielsen all-outlet beer scans all but fizzled out.  Volume slowed further for 4 wks thru Feb 23, -2.1%. That reduced yr-to-date gain to +0.1%.  Even imports up just 0.9% for 4 wks. Driving that: Heineken, Stella and Dos Equis each down 3-4% and Corona franchise slowed to +3% for 4 wks vs +10% yr-to-date.  Corona Extra -5%, Corona Light -20% and Familiar back to earth as it starts to cycle 2018 rollout. Familiar fell out of top-10 growth brands, even while still up 21% for 4 wks.  Then too, Modelo Especial about 4 pts off yr-to-date trend, +9%. Corona Premier still up 200%+. Numbers support chatter that Feb a tuff mo, especially in key Calif mkt. So, while Constellation still led overall share gainers, +0.7 for 4 wks, Constellation gained just 0.2 share of above premium for 4 wks.  That’s well below Mike’s 1.3 above premium gain and AB’s 0.8. AB also picked up 1.1 share of economy segment, while Pabst shed 0.7, MC 0.3.  Natty Light +4%, only big economy brand growin’ and Natty Daddy’s knockin’ it out of the park on small base. 

Mike’s Gained Slightly More $$ and $$ Share than STZ for 4 Wks  Dollar trends tell different stories.  Total sales still +2.3% yr-to-date, tho -0.2% for 4 wks.  Constellation still up 1 full share of $$ yr-to-date vs Mike’s gain of 0.7, Boston +0.2 and Diageo Beer Co +0.1.  (AB and MC shed 1.9 share of $$ between ’em). But flip that script a bit for 4 wks: Mike’s gained slightly more $$ and $$ share than Constellation: +$17.9 mil vs +$16.9 mil and +0.8 share vs +0.7.  White Claw franchise alone gained $15.4 mil for 4 wks (+0.7 share of $$), not far behind Michelob Ultra’s $15.9 mil, well ahead of Modelo Especial’s $10.8 mil $$ gain and 2.6X $$ gain for Corona franchise (+$5.8 mil).  Meanwhile, Corona Premier $$ up just shy of $10 mil for 4 wks, Michelob Ultra Pure Gold +$6.4 mil and Truly assorted package +$6 mil. Those 3 brands each gained 0.3-0.4 share of $$ in most recent period.  

Tho AB gained share of above premium and economy volume, not all beer and pretzels for 4 wks.  Overall volume -3.3%, triple its YTD dropoff rate, while MC volume -4.8% in most recent period.  Bud Light still seeking boost from corn syrup strategy. It’s down 8.5% for 4 wks, about 2 pts worse than Coors Light trend, almost 7 pts worse than Miller Lite trend.  Every other top-10 premium brand down too. Michelob Ultra hangin’ in at +13%, 4 pts off YTD trend. And Ultra Pure Gold still among top growers. So are 2 White Claws, Truly assorted and Bud Reserve. 

Many in US beer biz have shared a brew or two with John Hickenlooper, who co-founded Wynkoop Brewery in Denver back in 1988.  After building that biz, adding over a dozen other brewpubs/restaurants, John succeeded big time in Colorado politics as mayor of Denver for 8 yrs and governor of the state for another eight.  Now he’s set his sights on 2020 US Presidential campaign. “As a skinny kid with Coke-bottle glasses and a funny last name, I’ve stood up to my fair share of bullies,” he said in video announcing run, adding: “I’ve proven again and again I can bring people together to produce the progressive change Washington has failed to deliver.”  Dem field not quite as crowded as craft biz in Denver these days, but over a dozen candidates already.    

Pura Still “is off to a fast start,” (distribution-wise anyway) in first 11 wks of depletions, FIFCO USA told distribs in its March newsletter.  Pura Still “has higher category weighted distribution” (CWD) in total All Outlet (food, drug and c-stores) compared to Truly and While Claw hard seltzers.  Pura Still up to 14.4 CWD vs 12.3 for White Claw and 5.4 for Truly, FIFCO claims. Pura Still distribution larger than White Claw in Walmart, Wegmans, Giant Eagle and just by a hair in Total Wine stores, while trailing White Claw in Kroger supermkts. “The one metric Pura Still is lagging in is dollar sales per point of distribution,” noted co, “driven by” timing of launch for each brand.  Pura will get 2 new can pkgs to drive “new occasions & channels,” by Jul 1, a variety 12-pk of 12-oz cans and 24-oz single serves. 

Just as handful of Wall St analysts posted more positive notes on AB InBev last week (see Friday’s Express), Evercore ISI’s Robert Ottenstein listed key points from “an upbeat and confident [ceo] Brito and [cfo] Dutra” in London Q&A Fri morning.  Despite commodity, competition, other potential headwinds, they’re not new and ABI “still has significant tailwinds.” Beer is healthy globally, premiumization is global phenomenon and “beer in its infancy” vs wine/spirits in that evolution. Then too, tech advancements allow ABI to better “tailor offerings” to consumers and ABI’s “scale continues to be on the side of margins.”  Also: no brand impairments in beer (like Kraft Heinz announced recently), and competition is “manageable.” In US, Brito confident in innovation. AB’s got lotsa products in test, “many will fail, some will be regional, some will be scaled,” Robert points out, adding “process very different from when they put $40-$50 million behind Bud Light Lime to go national in 2008-09.” Bud Light Orange “better engineered” and better tested.  

There will be “more discussion of beer ingredients,” Robert noted.  Indeed, AB bought billboards in Milwaukee to push corn syrup issue and Bud Light veep Andy Goeler told Mil Biz Journal: “We will continue to run content focusing on ingredient transparency.  We’ll continue to run the current content until it starts to reach a certain level of saturation. We think it has a ways to go.” AB will also add new content, said Andy. “That’s an ongoing piece of managing the brand.”  He also told St Lou Biz Jnl: “We are moving with this effort to elevate the whole beer category, with or without MillerCoors. As the lead company and the lead brand, it’s critical. The fact they pulled out of [the industrywide initiative] doesn’t mean anything.” 

Back in London, Robert writes that Brito and Dutra also expressed confidence about ABI prospects in: 1)  China, where it has expertise in premium and is unfazed by Heineken, Carlsberg moves; 2) Colombia, where it has strong position, new brewery, new brands; 3) Brazil, where economy improving; 4) Mexico, where it’s getting into Oxxo stores (18K and growing); 5) India, where ABI went from 2 to 22 share with SAB purchase, Bud to be produced there and country “could be China 2.0 in time” as population moves to beer from liquor.