Public health advocates have long criticized the industry's responsible drinking messages for being too vague to be truly effective. Yet the industry has actually become increasingly specific in both its responsibility commitments and in the all-important evaluations of progress. Two recent cases in point: renewed pledges from industry in the UK and a just-released "progress report" on commitments made by global producers to reduce harmful drinking.

The new pledges are an outgrowth of the previous Responsibility Deal signed by industry members, reports The Drinks Business. Recall, the deal, which included removing a billion drinking "units" from consumption, primarily via providing lower-strength drinks, was subsequently rejected by public health advocates. But the industry continues to work with government officials. The new pledges include: increasing availability of lower ABV products on-premise, including house wines with ABV below 12.5%; creating local partnerships to combat anti-social behavior; training 10,000 retail servers by 2016; limiting canned beverages to 4 units of alcohol (approximately 40 grams); implementing "good practice guidance" for off-premise retailers; investing £250,000 for school-based education. The UK Home Secretary said "the government welcomes the progress the alcohol industry has made so far" and looks forward to "continuing to work with industry to explore what else can be done to tackle alcohol abuse." At the same time, the Minister for Public Health "confirmed that the drinks industry had already met an earlier target achieving 79.3% on its pledge to feature important health information on 80% of its labels on the shelf by the end of 2103." Public health officials remain unimpressed and still resentful that the UK did not adopt minimum pricing.

Separately, the 13 global producers/producer associations who made public commitments to reduce drinking harm recently released a "Commitments 2013 Progress Report," adding new commitments and highlighting achievements. Among steps taken in the first year, the producers have defined "specific measurable targets for all 10 action areas," including: minimum age policy, underage education, targeting advertising to adult audiences, developing digital marketing guidelines, reaching beyond the industry to develop self-regulation programs, making responsible marketing codes "a contractual obligation," responsible product innovations, providing more consumer information, reducing drinking and driving and encouraging responsible retailing. The report details specific progress achieved so far in various countries and/or plans for each of these areas, including how each will be measured going forward. Among the more specific items, the producers included:

• 135 educations programs run across the world, which have "directly engaged nearly 1 million" young people and over 500,000 adults

• Over 96% of these producers' ads comply with the 70% adult audience rule

• None of the producers' products have over 200 mg/liter of stimulants

• A draft set of digital marketing guidelines under review by the producers

Read the full progress report at: www.producerscommitments.org  

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Cheers,   

References
1 Stahre, M, et al, "Contribution of Excessive Alcohol Consumption to Deaths and Years of Potential Life Lost in the US," Preventing Chronic Disease, Volume 11, June 26, 2014; Behavioral Risk Factor Surveillance System, Centers for Disease Control, 2011 results.
2 Holmes M et al, "Association between alcohol and cardiovascular disease: Mendelian randomization analysis based on individual participant data," British Medical Journal, online Open Access Article, July 10, 2014; Conen, D, et al, "Alcohol Consumption and Risk of Atrial Fibrillation: How Much is Too Much?" Journal of the American College of Cardiology; Vol 64, No 2, July 2014, 290-292.

While the overwhelming weight of the research into alcohol and health in recent years has supported the link between moderate alcohol consumption and health benefits - particularly for heart/cardiovascular issues but extended to other areas - two studies surfaced in the last few weeks that question the link. The fact that they got broad media attention, together with new proposals from UK's National Health Service (NHS) that suggest "there is no safe level of alcohol consumption when it comes to dementia risk," indicate just how unsettled alcohol policy/advice can still be. This new proposal from NHS recalls the days when some US government officials took the position that "all drinking is risky," an attitude that subsequently faded (at least publicly) as the weight of the evidence linking moderation with benefits grew. But with some public health advocates, inside and outside government, taking harsher stances against industry's role in policy discussion/development, they will likely seize on these new studies to drive that position even more aggressively. They'll also cite them to support the lines they draw between alcohol and tobacco and in attempts to underplay decades of research findings that put alcohol in a more positive light. Ironically, the new studies followed in the wake of two other recent studies that supported the link between moderate consumption and cardiovascular health. They also emerged just as the World Health Organization was holding a meeting to discuss alcohol policy issues and at the same time that CAMY released a new round of studies attempting to link broadly advertised brands to illegal, underage consumption. (As AII has reported, those studies simply identify popular brands as popular brands, nothing more.) This coincidence is considered by some in the industry as perhaps not so coincidental.

The first study, attributed to 155 authors because they provided some data to be re-examined, was published for online access by the British Medical Journal on July 10th. The study added genetic data to self-reported drinking habits and coronary heart disease information from over 260,000 Europeans. The authors found that carriers of a (relatively uncommon, 7% of the subjects) gene variation associated with lower alcohol consumption had lower rates of binge drinking, lower systolic blood pressure and lower odds of coronary heart disease than non-carriers. In effect, this provided a protective effect seen previously in moderate drinkers vs. abstainers. If the familiar J-shaped curve found in the latter studies indicating moderate drinking protects heart health "is real," the authors suggested, comparing CHD rates between the groups should show variations between the groups. Some of the very low-drinking carriers should have experienced higher risk of heart disease while some of the moderate drinkers among non-carriers should have shown decreased risks vs. the carriers. Yet the carriers had lower risks across the board. That "brings the hypothesized cardio-protective effect of alcohol into question," the authors concluded. That conclusion led to headlines like "Moderate drinking is bad for your health" (Daily Mail) and comments from purported health experts, like one at UK's Sheffield University who told The Mail "There are few if any benefits to drinking alcohol, even in moderation."

But is this single study of a variation of "low prevalence" enough to question decades of research? Interestingly, among the "authors" of this study listed were some of the most prominent researchers that have linked moderate drinking to various health benefits, including Drs Eric Rimm, Curtis Ellison and Kenneth Mukamal. A group of over a dozen researchers have already published a critique of the study for a forum that Ellison co-directs for The Boston University School of Medicine's Institute on Lifestyle and Health. Several of the researchers point to the small percentage of people who have the gene specified (7% overall, 1-4% of Northern Europeans) as well as a number of technical issues with isolating a single gene when "many genes affect alcohol metabolism.… This raises questions about making generalized statements about the effects of alcohol on disease based on results from the analysis of a single nucleotide polymorphism of a gene." Indeed, one reviewer called the study's broad conclusion that "reduction of alcohol consumption, even for light and moderate drinkers, is beneficial for cardiovascular health," to be "an unwarranted overreach, an unscientific liberty."

Overall, "Forum members agree that the analyses were done correctly, but strongly disagree with the premise of the study and the conclusions of the authors" and consider the genetic factor used by the authors "as inappropriate to use as the instrumental variable" in this type of analysis, as the "gene studied explains only a fraction of alcohol consumption in the population." In general, "Forum reviewers consider this" gene analysis a "very blunt instrument and subject to considerable bias for variables that are weakly correlated with exposure and not true instruments." Finally, the Forum members note that "the conclusions of most prospective studies and meta-analyses [are] that drinking alcohol at low doses offers the best protection against CVD, as there is a J-shaped curve."

The second study, of approximately 80,000 Swedes, found increased risk of atrial fibrillation (abnormally fast heartbeat) among moderate drinkers, 1-3 drinks per day. Combining new data with 6 other studies, the authors found that each additional drink per day added about 8% risk for atrial fibrillation. The authors pointed out that atrial fibrillation "can lead to stroke, heart failure and dementia," in effect supporting the new NHS proposals announced at the same time. These proposals suggest mid-life behavioral changes, informing people that "alcohol consumption, even within current guidelines, can increase the risk of dementia, disability and frailty and encourages them to reduce the amount they drink as much as possible." They also suggest that current "social norms" that lead people to drink daily - indeed, many studies suggest small daily amounts may be the healthiest drinking pattern - "should be 'challenged' as they pose a threat to health," according to the Daily Telegraph.

But two important caveats. First, the Swedish study only linked wine and spirits to increased atrial fibrillation. Beer drinking, even at binge levels, was not linked to higher risk. Most studies linking moderate drinking to heart health link all alcohol beverages to benefits. The authors had no explanation for that important anomaly, suggesting only perhaps that beer is consumed "more regularly during the week" vs. weekend-only consumption of wine and spirits. Also, the authors of the study itself pointed out that "many studies have shown that light to moderate alcohol consumption can have beneficial outcomes on the heart, such as reducing ischemic heart disease and stroke." Therefore, "it is important to balance these benefits against the potential risk of atrial fibrillation," the lead author pointed out. Yet a typical headline covering the study was: "Just one glass of wine a day can send your heartbeat haywire - and increase the risk of stroke and dementia."  

The Centers for Disease Control's recent "ranking" of alcohol attributable death rates by state raises some key questions about the factors that might explain the wide variation across the country found in these rates. Using a tool called ARDI (Alcohol Related Disease Impact) based on the "number of age- and sex-specific deaths from 54 alcohol-related causes" identified by death certificates, CDC calculated alcohol attributable death rates (AAD) per 100,000 population for each state for 2006 thru 2010. The death rates ranged, quite remarkably, from a low of 19.1 per 100,000 population in New Jersey to nearly 3X that, 51.2 in New Mexico.

CDC researchers suggested that "differences… probably reflect differences in the prevalence of excessive drinking, particularly binge drinking, which is affected by state and local laws governing the price, availability and marketing of alcohol beverages." Not surprisingly, the authors conclude this short study by advising that "more implementation of interventions recommended by" (CDC's oft-criticized) "Community Preventive Services Task Force, including increasing alcohol prices by raising alcohol taxes, enforcing commercial host (dram shop) liability and regulating alcohol density, could reduce excessive alcohol consumption and the health and economic costs related to it." That's even while the study analyzes none of these factors or even attempts to correlate any of them.

Cross-state correlations for some of these factors would be difficult to determine (especially measuring over time), in some cases impossible (measuring "enforcement levels" of dram shop liability, for example). But some revealing data is available. For example, CDC used its own Behavioral Risk Factor Surveillance System (BRFSS surveys) in its analysis. Among other measures, BRFSS reports state-by-state levels of binge drinking (5+ on an occasion for men, 4+ for women) and "heavy" drinking (2+ per day for men and 1+ per day for women, basically anything over the current Dietary Guidelines). But CDC didn't compare those rates to the death rates.

The table below shows the "top 10" and "bottom 10" states for 4 measures. Three come from CDC: the alcohol attributable death rate for 2006-2010 (AAD), the binge drinking rate (2011) and the heavy drinking rate (2011). If the CDC is correct in stating that the AAD rate differences "probably" reflect differences in excessive and binge drinking, you would expect to see many of the states repeated across these 3 measures, i.e. the states with the highest heavy and binge drinking rates would also be among those with the highest AAD rates, and vice versa. But you don't.

In fact, only DC, Alaska and Montana rank among the top 10 in alcohol attributable deaths and binge drinking. And only DC and Montana are among the top AAD states and top heavy drinking states. Then too, New Mexico has the highest AAD rate in the US, but it is also among the bottom ten in binge/heavy drinking rates (and has a lower than average binge drinking rate). Similarly, Oklahoma and Mississippi have among the highest AAD rates and lowest binge/heavy drinking rates.

Among the states with the lowest AAD rates, Utah meets the CDC expectation of having a very low AAD rate as well as low heavy and binge drinking rates. But otherwise, no other state in the bottom 10 for AAD is also among the states with the lowest heavy and/or binge drinking rates. But 3 states with low AAD rates actually have among the highest binge drinking levels and 2 have among the highest heavy drinking levels.

What about tax policy? Prices and taxes are notoriously fluid and price ranges for beer, wine and spirits are remarkably broad given the value-luxury spread in available products across the board. Among top beer brands nationally, an average 6-pack price in off premise accounts ranges from $3.75 to $8.65 currently; retailers often discount prices to lower levels. Wine and spirits prices have even wider spreads. But using beer taxes as a proxy doesn't give much support for CDC's advocacy of higher taxes. True, among the states with the highest AAD rates, 3 are also among the ones with the lowest taxes. But 2 others are among those with the highest tax rates already. Among the 10 states with the lowest AAD rates, it's a wash: only 1 is among those with the highest tax rates and 2 among those with the lowest.

Availability may be the trickiest of all. But CDC is a supporter of control states, where alcohol tends to be less available than in licensed states; its Task Force specifically advises against further privatization. But among the 10 states with the highest AAD rates, 3 are control jurisdictions, and 2+ control states (Maryland is partly control) are among those with the lowest AAD rates. Look at 2 neighboring states, New York and Pennsylvania, the former one of the largest license states, the latter a control state, in fact the biggest control jurisdiction. Pennsylvania controls all wine and liquor sales with an extremely limited number of state stores. Beer is not available in the vast majority of grocery, c-stores or gas stations. New York limits liquor and wine to liquor stores, but there is no shortage of them, and beer is widely available in grocery stores, gas stations, c-stores and 4th-tier home distributors. Despite these differences: 1) overall absolute alcohol beverage consumption is about the same in New York (2.24 gallons) and Pennsylvania (2.20); 2) heavy drinking rates are virtually the same (6.2% vs. 6.6%); 3) binge drinking rates are similar (19.6% vs. 18.3%) and beer tax rates are within a fraction of 1 cent per bottle. Yet the AAD rate in New York is significantly lower than in Pennsylvania, 19.6 vs. 25.8, and almost 30% lower than the US average (27.9).

If you didn't get enough local-love while in Portland, Oreg for CBC this year, head back next month for opening of Loyal Legion. It'll pour from 99 taps of "all-Oregon-beer" and seat 120, according to Oregon Live. It's latest project from owner Kurt Huffman of ChefStable Group (behind Lardo sandwich spots and a dozen or so other top city restaurants).  

Adding more support for fast-growing craft exports, the BA announced addition of Sylvia Kopp to its staff as European Ambassador. Sylvia's a co-founder of Berlin Beer Academy, judges competition and writes about beer. She'll work educating importers/distributors and media in Europe about US craft beer, expanding staff BA has devoted to its Export Development Program.  

Saga over using images of minors on beer labels in NH, spurred by bar-owner/state representative who wants to sell Founders Breakfast Stout, ain't over yet. NH governor vetoed bill that would repeal current law barring use of minors/children on alc bev labels earlier this month. Then state House overturned veto with 236-95 vote. Now before Senate. Meanwhile, midwest retail chain Heinen's, with 22 stores in Ohio and Illinois, pulled DuClaw's Sweet Baby Jesus Chocolate Peanut Butter Porter from shelves after complaints about the name. Its the Baltimore-based brewery's biggest brand, about 35-40% of its sales, founder Dave Benfield told the Baltimore Biz Journal. The brand's been pulled by a military base before and "customers frequently [write and call] in with complaints," according to the paper. "It's not meant to be offensive" or "derogatory," Dave said. And tho removal from Heinen's might smart a little, it won't cut into sales too deeply. "We don't censor ourselves because it might cost us dollars," he said.

That sounds a lot like another, bigger Maryland brewery that's pretty familiar with creating brands that stir the pot. Indeed, Flying Dog's latest release Counter Culture, a malt-forward flavor departure from the co's hop-heavy portfolio, looks like a stylistic departure on the shelf too. Artist Ralph Steadman created the label and 6-pk art, as always for the co, but in a totally new style that reimagines (rather faithfully) DaVinci's The Last Supper. "We've gotten some emails about that," CMO Ben Savage said about it at recent Brewbound Session, adding that "we don't feel like we're succeeding unless we get emails about our labels." Flying Dog's bet on its Raging Bitch brand and others with freedom of speech legal battles before, recall.  

In another round fighting against looser wine laws than those governing other alc bevs, beer backers in Mass hope to legalize liquid donations to non-profits for events, Boston.com reports this week. A pair of bills, both from state Rep Alice Peisch would pave the way for beer and spirits to be donated by licensees to non-profit orgs for service at events, currently only allowed for wine. Most seem to agree the changes make sense, but the bills still await hearings. Of course, many "were reluctant to speak on the record about the issue, owing to a climate of anxiety in the wake of the pay-to-play investigations launched last year," according to the article. Indeed, first (and so-far only) hearing as a result of that investigation, with Craft Beer Guild LLC of Sheehan Family Companies, was recently postponed ("continued") from originally-scheduled June 23 date. No word yet on new date.  

As AB establishes itself with craft consumers, its high-end execs work to provide legions of smaller brewers with different images of the co than those presented by detractors. That requires some careful commentary when talking about "craft" definitions, "competitive" pricing, and criteria the co looks for in acquisitions, as AB's high-end unit CEO Andy Goeler showed during Brewbound Session last week. For instance, "Shock Top, again, is not a craft beer," he said simply before seemingly distinguishing between the AB brand and Blue Moon, a "two-and-a-half million-barrel brand," a "large brand." There's a "broad...range of consumer demand," he said, and many beer drinkers "could care less" about things like a beer's "ingredient story." But "I don't want to even get into the definition. To me, it's all beer," he said of drawing lines around craft. "I think that was important a long time ago," he suggested. And "there's no need to fight." Indeed, "the fight is really with wine and spirits," Andy said, since "we really have lost a lot of volume." Battles within beer can be a "bad thing for the industry."

So part of his work to "elevate beer," he said, includes participating in the "huge huge movement for beer infiltrating" high-end food outlets and occasions, where his team focuses work on specialty Goose brands. All told, "Goose is in great shape. Blue Point's flying," Andy shared. But that low-low keg pricing? "We want to elevate beer," he repeated, and "don't want to keep beer down." At same time, "we will, however, be competitive where we have to be competitive," Andy insisted, reiterating "if we have to." Indeed, "the price point is actually a part of the whole brand experience," he believes.

Visiting the "amazing" pubs that AB now runs, mostly in the PacNW, is also part of the experience, he noted, attempting to distinguish between supporting brands and executing strategy. He compared pub visits to going into an Apple or Disney store. "Every state has their laws" covering 3-tier dynamics, he acknowledged, but "we don't want to be in the restaurant business or the bar business. We want to be in the brand building business."

AB still seeks other brands to build. "There's a lot of conversations going on," Andy said of future small brewer acquisitions, "a lot of good conversations." He echoed some familiar comments about what AB looks for: 1) a "management team and ownership team that wants to stay involved," he said, "long-term"; 2) great tasting, growing brands; and 3) "the ability for those brands to be distributed through" AB network, "a key component" of any deal. AB's "very biased about our wholesalers," Andy reminded.

"I'm not going to take any shots at private equity," Andy said, but he did do a bit of selling AB as a buyer. Acquired brands "are not going to go out of business. We're not going to get rid of these brands." He shared Goose Island founder John Hall's dream of the brand being national, which AB made come true. That occurred quickly due to "pent up demand among wholesalers" for craft brands, he said. And tho he's gotten "a lot of requests" for newly acquired brands 10 Barrel and Elysian, "and sometimes it's hard to say no," he's urging distribs to "continue to work Goose Island." To "take your local magic and bring that to other markets" isn't easy, Andy said, connecting and commiserating with craft cos in attendance. "You get so myopic," he said, but in some faraway markets consumers "could give a crap about Chicago," for example.  

Each of Tenth and Blake's five 5 main brand families are up this yr and "accelerating into the summer," new prexy, Scott Whitley said at our Spring Conference last mo and again at Brewbound last week. So Tenth and Blake is a bright spot for MC in 2015, amidst a pretty soft yr overall. Tenth and Blake's largest brand, Blue Moon, is leading the charge and "picking up the pace" this yr, Scott said. Indeed, Blue Moon up 13.6% in latest 4 weeks of Nielsen xAOC data thru Jun 6, reported yesterday by Goldman Sachs' Judy Hong, even as total MC $$ sales down 3.9% same period.

Total Tenth & Blake tracking up 5.9% yr-to-date in IRI multi-outlet + convenience yr-to-date thru May 17, including 10% gain latest 4 weeks. Total Blue Moon family up 8% YTD, including Blue Moon Belgian White up double digits. Blue Moon now getting pop from launch of White IPA too. It sold 29,000 cases last 4 weeks. That's almost half of Blue Moon growth in period thru May 17 (66,000 cases). Blue Moon also got much better performance from its new spring seasonal, First Peach Ale. Recall Blue Moon Seasonal struggled last yr, but was up double-digits thru Q1 (see May 7 issue). "Peach really cracked the code for us this spring," 'cause it was able to "play in all weather conditions" and is "very sessionable," said Scott.

Then too, even with more challengers coming (i.e. Alchemy and Science), Leinenkugel Summer Shandy up again. Leinie Seasonals up 4.5% in IRI multi-outlet + convenience yr-to-date thru May 17, including 7% gain last 4 weeks, now that summer season comin' on. Leinie also gettin' lotsa incremental lift from its new Grapefruit variant as well. Sold 45,000 cases in IRI last 4 weeks, 95,000 cases YTD. Grapefruit Shandy accounted for 45% of Leinie family growth last 4 weeks. Total Leinenkugel family up 20% for 4 weeks and 12.5% YTD in IRI MULC.

Grapefruit Shandy "already well ahead" of original plans for 40-50K bbls in year one, even as "we didn't get all the chain authorizations we could" and "missed the spring kind of window," according to Scott. When Summer Shandy and Grapefruit are sold together in same store, Summer Shandy does "30% better" than by itself, noted Scott at our Spring Conf. Leinenkugel will "crest the 1 million barrel mark" in 2015, said Scott. MC still lookin' to "test and see if shandies are a year round play," and so far has found "there is something there in the off peak season" with their Ginger Shandy. Then too, "I think cider has huge upside" and is "worth pursuing for sure," thought Scott. "I think [Crispin] will be a winner long term," he declared. Besides, Blue Moon, Leinie and Crispin, Tenth and Blake also up on its imports, Peroni and Pilsner Urquell.

M&A? Some Craft Brewers "Getting A Little Beyond Their Skis"; "Focus Is Your Friend" Recall, MillerCoors has 25% stake in Terrapin, but hasn't yet made any other craft acquisitions. "We're studying the space pretty hard," Scott acknowledged. While co has "interest in looking at opportunities, in craft space.... We have a lot of upside with our current portfolio.... We want to be smart, strategic and thoughtful about what we do ultimately," he said at our Spring Conference. Some craft brewers are "getting a little beyond their skis," Scott said at Brewbound last week. And they don't "have the mass, margin and momentum to compete." That's part of why "M&A has kicked in," he added. But Tenth and Blake also has to keep in mind that "in a fragmenting environment, focus is your friend."

"No Interest" in "Getting Anywhere Near" ABI Discounts Asked if MC/Tenth & Blake planned on matching some of recent ABI high-end discounts on Shock Top/Goose Island kegs, Scott replied: "we have no interest in even getting anywhere near some of the things that may be going on" (Editor's note: they're going on.). "I'm about growing value…. It does us no good, it does the industry no good to have anybody in the business undercut value. We're fighting so hard for every box we're selling and we're making such strong investments."  

Last mo, exceptionally tuff total beer biz trends showed up in Los Angeles scans, including beer $$ down 7.4% for 4 weeks in IRI multi-outlet + convenience thru May 31. That included double-digit declines for AB, MC, HUSA, Pabst and a rare (if not unheard of) 1% drop for Constellation Brands Beer Division. (YTD trends much better.) Yet handful of top Calif-based craft cos kept up impressive growth and gobbled up share during period. Lagunitas $$ up 76%, led by IPA (+79%); it gained nearly half a share of total beer $$ to just under 1. Firestone Walker more than doubled (+134%) and gained 0.4 share of total beer in foodstores, riding 805 wave (+470%). Add in Sierra Nevada (+10%), Stone (+35%), and Ballast Point (+139%). Each gained around 0.2 share of beer $$.

But May wasn't so pretty for other top craft cos in LA. Boston Beer down 3% including cider and tea. Sam Adams Boston Lager down 17% for 4 weeks. However its Alchemy & Science arm (IRI separates out from Boston Beer total) is flying, up 556% on the heels of Angel City package rollout. All together: Boston Beer up slightly during period. Craft Brew Alliance and New Belgium down 13% and 8% respectively in biggest Calif city. (Note inability to continue use of scanbacks in state likely affected some of these trends.) And a few in-state brewers took a 4-wk hit: Hangar 24, Golden Road and Green Flash each down 6%. Yet plenty of other craft cos were up healthy for the period, as total craft segment continues to grow strong in LA, especially for leading Calif-based craft brewers.