Perhaps it’s just a sign o’ the times, but the most prominent beer news stories in internet-land last coupla days surely don’t support traditional brewer values or beer as an adult bev.  Amidst flurry of media coverage that “corntroversy” has killed, or deeply wounded, any potential unified beer category health initiative (see yesterday’s Express), came another flurry of ingredient news, none of which could be considered traditional, or probably too helpful to beer’s image.  Most potentially damaging: public interest advocacy group P.I.R.G. released widely covered study that found 19 of 20 beer/wine samples tested positive for “the main ingredient in weed killer,” as USA Today pointed out, glyphosate.  Revelation timed to coincide with fed lawsuit kicking off vs Monsanto and its Roundup product, alleging it causes lymphoma.  Beer Inst, Wine Inst and others pointed out that the tests showed just trace levels in products (including AB, MC, Constellation, HUSA and craft brands), well below fed limits for any health risk. And even P.I.R.G. acknowledged “the levels of glyphosate we found are not necessarily dangerous, but are still concerning given the potential health risks.”

Then came flurry of attention to Smartmouth Brewing Company in VA for introducing a beer inspired by kid-favorite breakfast cereal Lucky Charms.  Saturday Morning is brewed with marshmallows, Smartmouth sez, and is “sure to set you back with nostalgia, on the couch, turning on the best cartoons for a Saturday morning.”  And AB officially launched new Natural Light brand, Naturdays, a beer for those “who like strawberry lemonade and drinking beer.”  Released just in time for Spring Break, long associated with responsible beer consumption, Naturdays is a light beer flavored with strawberry lemonade, packaged in bright pink cans (with flamingos!) and brewed, presumably like Natty Light, with “a blend of premium hops and a combination of malt and corn.”

Finally, ain’t just beer folks blurring the lines between bevs these days.  Weclome Naughty Tea, a just-announced Southern Sweet Tea Wine from Natchez Hills Winery and Vineyard that’s 10% ABV, and “made with 100% natural black teas, has less than 6 grams of sugar per serving and is classified as wine even though it contains no grapes.”

All-outlet scan trend softened to -1.6% for 4 wks thru Feb 16, Nielsen reports,  $$ +0.5%.  Hardest hit segments in most recent period: premium regular -6.9% and premium lights -6%.  Bud Light -7.7%, Coors Light -5.8% and Miller Lite

-1.2%, each softer than previous 4 wks/YTD.  Then too, Constellation slowed to +6% in most recent period, down from +11.4% YTD.  Boston, Diageo and Mike’s held closer to YTD trends.  Imports up just 1.5% as Corona Extra, Heineken, Stella Artois, Dos Equis and (especially) Corona Light all soft, Corona Familiar starting to lap big gain.  Corona Premier still rockin’, up over 200%.  New Belgium +3.5% for 4 wks, but other top craft brand fams in Nielsen universe all hurtin’.

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Striking comments from ex-AB exec to INSIGHTS after he read about Kraft Heinz and 3G Capital on Friday.  “It took a while for the financial community to wise up,” he began, “and it seems like the foibles of the famous ZBB [zero based budgeting] are exposed. Yet one part of the story still remains to be written,” he continued.  “That is the impact on the human capital which is a most important resource in organizations. From the start, layoffs, reduced budgets (down to managing paper clips etc.), unrealistic targets and leadership arrogance not only damaged brands, it killed the culture of the institution. It is not good to have zombie front line employees going through the motions and just collecting a paycheck.  And leadership is being turned over to young elitists who are not viewed as earning their way up the ladder. It’s appropriate to say ‘told you so,’” he concluded.  Tuff statements like these, though often heard over the years, may not reflect AB of today.  Comments?

A ton more ink spilled since Kraft Heinz reported results.  Stock staying stubbornly down following 28% drop on Friday.  Down 2% again today in up mkt.  INSIGHTS saw attacks on 3G model, little defense.  Even legendary investor Warren Buffett admitted he “overpaid” for Kraft (not Heinz) this morn on CNBC.  His Berkshire Hathaway owns 27% of Kraft Heinz and took $4.3-bil loss on its Kraft Heinz investment Friday.  Still, he called 3G’s Jorge Paolo Lemann “an absolutely outstanding human being” and said he would be “happy” to partner with him again, doesn’t intend to sell his Kraft Heinz stock.  Kraft Heinz may look to divest Maxwell House for as much as $3 bil, suggested speculative CNBC piece over the weekend.   The co has said it would consider asset sales for those bizzes in which it does not have competitive advantage.  This morning, Bernstein analysts looked to separate ABI from Kraft Heinz, saying a similar unpleasant ABI surprise unlikely, as ABI and Kraft “dramatically” different, notes Seeking Alpha report.  ABI has “debt problem not an organic growth and pricing issue.”  Bernstein maintains outperform rating.

After Brian Erhardt promoted to chief integrated supply chain officer last mo, MC in need of a Western region veep.  Chris Haas will take that slot.  Most recently, he led MC’s only branch, Coors Dist Co in Denver as veep and general manager. Succeeding Chris at CDC will be Mike Nuss, who most recently was gm of OH/KY for MC.  Finally, MC also hired Jennifer Fulton as gm in Pac NW.  Jennifer most recently at Stumptown Coffee Roasters, but previously spent 14 yrs at Pepsi.

Heineken ceo Jean-Francois van Boxmeer weighed in on “corntroversy” with that comment in wake of AB’s Super Bowl ads to Wall St Jnl.  “No wonder the beer category isn’t going to elevate itself,” he added, apparently agreeing with those who think AB’s not doing the industry any favors here.  AB continues to insist it’s committed to “strengthening the beer segment” and stickin’ by its position that campaign about transparency.  WSJ article focused on MC dropping out of category health initiative (see Feb 15 Express); proclaimed that proposed industry-wide campaign “could now be dead in the water.” 

Someone leaked potential themes that came out of mtgs involving top brewers, Beer Inst, BA and NBWA.  “Ideas to boost beer,” WSJ wrote, “included helping drinkers find the right beer for them, positioning beer as a reward at the end of a tough job and efforts to convince consumers that beer is social and sophisticated.”  Execs apparently also considered a bartender education program, targeting younger drinkers and communicating beer’s contribution to the economy, “according to documents reviewed by The Wall Street Journal and people who attended the meetings.”  Indeed, there was mtg on tap for next mo in Chi at Constellation’s office, WSJ reports, to confirm decision to hire 1 of 5 mktg agencies who presented ideas last fall.  But for now, MC’s out, AB’s continuing the ads (including during last night’s Oscars broadcast) and Heineken spokesperson said it’s too early to comment on fate of category heath project. 

Happy Beer: “We Need to Make People Smile Again to Bring them Back to the Category Rather than Boring Them to Death” Sez Jonnie  Separately, Heineken USA cmo Jonnie Cahill spoke to campaignlive.com about category health.  “How do we recover and reignite the [beer] category?  By giving people more reasons to love beer.”  For Jonnie, that means “occasionality,” which links innovation to “new ways to enjoy beer – new occasions and joy.  It’s all gotten very serious and complex.  It should be about dancing and barbecues and relationships.”  New Heineken 0.0 “all about moments you can enjoy beer,” sez Jonnie, aimed squarely at “beer lovers who drink beer and love beer and want a beer, but not the alcohol.”

On-premise trends improved very slightly in 2018 vs recent years, reports Nielsen CGA.  Volume slipped 1.8%, similar to 2016-2017.  But dollar sales ticked up slightly, +0.2%, reversing declines in previous 2 years.  Nielsen projects 452 mil case-equivalents sold on premise, about 33 mil bbls, just over 16 share of total volume.  Note: Nielsen does not include projections for taproom sales, growing solidly and over 10% of craft volume, 8-9% of total on-premise volume. 

Above premium segments outperformed.  Craft volume rose just 0.5%, but $$ +2.3% and passed domestic premium as the largest $$ segment in this channel at 32.7 share, again without inclusion of taprooms.  Import volume increased 3.3%, coming in just under 20 share of on-premise volume, 22 share of $$.  Domestic premium brands still have over 1/3 of volume and nearly 1/3 of $$, but declined another 5-6% in 2018.  Superpremiums sell more on-premise than subpremiums.  Cider declined.  Other segments have tiny presence; hard seltzers were decidedly an off-premise phenomenon in 2018.  AB and MC performed no better on-premise than off-premise, shedding 1.3 share of volume, 1.4 share of dollars between them.  Then too, given craft’s strong presence on-premise, AB has well below 30 share of volume on-premise, MC just over 20 share.  Constellation may still be under-shared in draft, but its overall share of on-premise biz close to its total share in US, 9-10. 

Like their suppliers, top brands again lost ground on-premise in 2018, with similar trends to what they delivered off-premise.  Bud Light, Coors Light and Budweiser each off 6-7%.  Miller Lite did slightly better, -3.5%.  But all in, those 4 brands shed another 1.4 share of volume, 1.5 share of $$.  Corona Extra, Michelob Ultra and Modelo Especial were only top brands that gained on-premise volume and $$ in 2018.  Corona matched Bud’s volume share (4.2) and captured 0.9 more $$ share.  Blue Moon Belgian White and Yuengling each lost ground on-premise.   Collectively, top 10 brands dipped 3.3%, virtually the same as in 2017, losing just under 1 share of volume and $$.

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Colorado cannabis mkt showed signs of becoming mature biz last yr after huge surge in recent yrs. Yet Colo beer biz had solid yr, up 51,000 bbls, 1.3% in yr, according to Beer Inst. Total US beer biz down about 1%.  In CO, recreational cannabis sales still up double digits; up $122 mil, 11% to $1.213 bil.  That’s quadruple the $303 mil recorded just 4 yrs earlier, according to state numbers published by Marijuana Biz Daily. But medical sales fell $84 mil, 20% to $332 mil in 2018.  So total legal cannabis biz up just $38 mil, 2.5% last yr.  In past 4 yrs, Colorado cannabis grew like a weed, up $850 mil from $683 mil in 2014 to $1.546 bil in 4 yrs.  In same 4 yrs, Colorado beer biz grew over 100,000 bbls, 3%, while beer declined 1-2% on a national basis.  These numbers suggest legal cannabis has had little effect on beer sales in Colorado, tho INSIGHTS doesn’t know effects of increased tourism on consumption of either.