Arrival of Spring kicked beer $$ growth up a notch for 4 wks thru Apr 19, in IRI multi-outlet + c-store data. Total beer $$ grew 6%, just over $137 mil, to about $2.5 bil during the 4-wk period. That’s over 40% of beer’s yr-to-date $$ growth.

Big part of that: all top 5 brands grew for 4 wks. Top 5 biggest beer brands got one-third of total $$ growth, collectively up $45.9 mil, 4.5%. Another group of 5 brands put up big growth, between $4 mil and $14.2 mil for 4 wks. This group got another third of total $$ growth, just over $44 mil. It’s led by Mich Ultra Lt, Modelo Especial, each up over 20%. It also includes almost entirely incremental growth of Bud Light Lime Seasonal (gotta be Lemon-Ade-Rita) and Redd’s Wicked variant. Stella, +26%, rounds out group. At just 7 share of beer $$, these 5 growers got way out-sized growth. So 10 brands, about half of beer $$, got 2/3 of beer $$ growth.

Rest of IRI’s top 100 wiped each other out: 49 up, 41 down. The 90 brands netted a $1.7-mil decline. Eleven brands, each down over $1 mil for 4 wks, made up over 80% of $44.9-mil decline posted by 41 decliners. Those 11 include: 4 Ritas (original Lime-A, Straw-Ber, Raz-Ber, Mang-O) collectively down $19.4 mil, -45.6%; 3 higher-alc brand extensions (Miller Fortune, Bud Black Crown, Bud Light Platinum) down $10.8 mil, -30.5%; and 2 big sub-premium brands, Keystone Lt and Natural Lt, about 4.7 share of beer $$, each down about 3-4%.

So 5 largest brands got 1/3 of growth, 5 big gainers got another 1/3 and rest of top 100 growers and decliners wiped each other out. All other beer brands in IRI MULC universe got remaining 1/3 of beer $$ growth, +19%, $48.9 mil. That huge group of brands gained 1.3 share of beer $$ to 12.5.

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While NBWA had dialed up opposition to BA’s Small BREW, it previously wasn’t particularly full-throated in support of  BI’s Fair BEER.  NBWA “not asking for taxes to be reduced,” NBWA said in position paper on taxes on Monday but “should Congress advance tax legislation,” NBWA “encourages Congress to support legislation that reflects current industry structure and includes all brewers,” i.e. Fair BEER. But yesterday at breakfast meeting with members, just before they headed to the Hill, NBWA dialed up more active support.

Fair BEER is “the bill that we do support” because it would provide “the most tax relief to brewers of all sizes” and “greater tax relief to brewers of all sizes,” said vp of govt affairs Laurie Knight.  Tax section on NBWA website also references that NBWA “supports the Fair BEER Act.” At NBWA breakfast, Laurie called BREW “really a jobs transfer piece of legislation” when asked about small brewers jobs creation “message” during Q&A.  “I don’t think that there’s any realistic expectation that it’s really going to create a big explosion in new employment.  It may transfer jobs from the larger brewers to some of the smaller brewers,” she went on, but “probably lower paying jobs,” with fewer health benefits, etc. 

Then too, Laurie acknowledged that she’s “heard some inconsistency” with total amount Fair BEER would cost ($110-$140 mil), and advised to “keep it general” when talking about it, as “a little over $100 million.”  However “it is inaccurate” to expect that “the BREW Act is only $64 million.  That’s just wrong,” she said. “Why would we get into this fight?” Craig Purser asked.  Yesterday “folks wanted to know where we were” on the issue, he said.  “For a number of years your political capital was being used, or usurped as one segment was essentially telling members of Congress that we had no problem with this legislation.  And they were misinformed…they were wrong.”  There is a “constituency” of Congressional members that seeks to cut beer taxes and even tho distribs don’t get tax cut with either bill, Fair BEER is the way for beer distribs talking to members to be for something, Craig explained to INSIGHTS.  But one distrib source who went on numerous visits yesterday, said that members that hadn’t signed onto either bill all said that if different beer factions “don’t get together pretty quickly” they won’t “be able to do anything.”    

Discussion by panel of Wall Street analysts at last week’s Bev Forum mostly revolved around non-alc beverage stocks, but also featured a couple of notable exchanges/differences on beer.  Moderator CLSA’s Caroline Levy began by highlighting 2014 and 2015 yr-to-date performance of bev stocks:  Green Mountain Coffee Roasters biggest gainer in 2014, up 75%, but down 14% so far in 2015;  Monster led the charge in both periods; up 60% in 2014 and another 27% so far this yr (thru Apr 16).  Constellation easily best performing alc bev stock in both periods; up 39% last yr and 20% YTD.  ABI only up 6% last yr, but up 11% this yr.  Boston followed 20% gain last yr, with 9% drop YTD. 

Constellation is a “layup,” according to Stifel’s Mark Swartzberg, who thinks current “multiple is fair or even a little low” when “you look at the growth over the years to come” and cap ex “requirements becoming lower over the years.”  Which stock gives cause for concern?  ABI, said HSBC’s Carlos Laboy, who said he is “worried”  about ABI “because of Brazil.  Because of the US.  Because light beer is really struggling.” Brazil is “going through a very difficult period,” said Carlos, with Brazilian currency devalued against the dollar and a changing competitive landscape.  Key Carlos point: “You can’t just turn on the switch and become an innovator overnight.”  This is a “culture that’s based on efficiency” and now “a cultural transformation needs to happen…. Is there a culture than can allow failure” at ABI?   

In Carlos’s view, taking over SABMiller is “an expensive proposition,” but “ABI has to do it,” facing the challenges that it does.  It’s either go after SABMiller “at a reasonable price,” or go after Coke.   Mark disagreed with Carlos that ABI has to do a deal.   While a deal “would be more impactful than no deal,” Mark said ABI execs are still “very, very good capital allocators” and there is “upside even in the absence of a transaction.” Beer globally “continues to demonstrate a certain amount of pricing power,” ABI up 5-7% in revs. That’s “a pretty good way to start any year,” said Mark.  

A picture of a Bud Light bottle set off a social media storm yesterday, still reverberating with potentially more lasting effects. It focused on 1 of over 140 “scroll messages” printed on front labels as part of the brand’s “Up For Whatever” campaign: “the perfect beer for removing ‘no’ from your vocabulary for the night.” It didn’t take long for folks to put the line in context of “‘no’ means ‘no,’” a cornerstone of sexual assault education, causing a read of the line as problematic at best and egregiously offensive at worst. The story exploded from there, blowing up Bud Light’s Twitter and Facebook pages by early afternoon and becoming a story for the NY Times, USA Today, Washington Post, Bloomberg Business, St Louis Post-Dispatch and countless other print and web-based outlets.

The official statement and apology from Bud Light VP Alexander Lambrecht didn’t quell many flames. It first touts the way the campaign “has inspired millions of consumers to engage with our brand in a positive and light-hearted way,” and goes on to say “that this message missed the mark, and we regret it.” So the story “raises questions about the vetting process” in place at ABI and its Bud Light team, Ad Age’s EJ Schultz noted. “We have an extensive review process,” a spokesperson told him, “and this label shouldn’t have made it through.” Further, “BBDO is the creative agency for this UFW campaign, including all bottle scroll messages.”

The language will “not go on any more labels, effective immediately,” the NY Times wrote this morning, citing another spokesperson. But others question Bud Light’s entire “Up For Whatever” campaign, now over 2 years old. The “campaign should promote responsible - not reckless - drinking,” US Representative Nita Lowey (D-NY) tweeted. She added that the label indicates “an epic lack of understanding of the dangers associated with excessive alcohol consumption, such as sexual assault and drunk driving,” for the NY Times. Alcohol marketers “need to tackle” those issues, she said, “not encourage them.”

In other “scroll messages,” Bud Light marketers capture the spirit of “Up For Whatever” with highly specific suggestions: “the perfect beer for tuning up the old air guitar,” “forming a one-person conga line,” or “eating breakfast meats outside of breakfast hours,” as Ad Age reported in initial coverage about the bottle messages. This message on the other hand, “removing ‘no,’” is a broad but direct logical extension of being “Up For Whatever.” It’s “as if” the Bud Light team was “inspired by their own brand idea and wanted to find out what they could get away with,” a Forbes contributor wrote today. After noting success, “so far anyway,” of the alc bev industry’s self-regulation of marketing materials, he writes that if he were “any other alcohol brand, I would be livid at Bud Light’s inability to self-regulate itself with this supremely unwise line on their bottle.” Whatever happens next, ABI is learning about the complexities of digital age alc bev marketing the hard way.

Up against very tuff comps last yr, when depletions and shipments each soared 30%+, Boston Beer posted an 8% depletions gain in Q1 2015, it just reported.  Shipments up 6%.  And for 16 weeks thru Apr 18, depletions still running up 8%.  So depletions slowed since mid Feb when they were up 12%.  Recall, inventory reduction slowed Q4 2014 shipments to just +4% gain. In Q1 this yr, inventories at distribs in Freshest Beer Program (over 2/3 of volume) also “decreased slightly” vs end of Mar 2014.  Depletions “benefited” from “strength” of Angry Orchard, Twisted Tea and Traveler brands, which offset “slight declines in some of our Samuel Adams styles.”  And there were tuff comps with Rebel rollout last yr and Cold Snap seasonal launch, CEO Martin Roper noted.

Financially, Boston got rev/bbl increase of about 2%.  So revs +8.5%.  Cost of goods sold up just 7%, boosting gross margins a point to 50%.  Then too, gen and admin costs up 8.6%, but key (and much larger) ad, promo and selling costs dipped slightly.  That really boosted operating income: up almost $9 mil to $22 mil.  And operating margin widened from 7.3% to just over 11%.  Boston maintaining depletions guidance of +8-+12% for the full year.  

The 2015 Beer INSIGHTS Spring Conference is coming up 2 weeks, so make your reservations now.  You won’t want to miss this unique conference that focuses exclusively on the high end of the beer biz, May 11-12 at the Ritz Carlton in Chicago.  The conference program features many of the leaders of the high end; representing imports, craft, FMBs and cider, plus lotsa keen analysis and great data, and plenty of networking time.  Click here for more information and click here to reserve your spot.

Carlsberg investment in E.C. Dahls facility in Norway, which Brooklyn Brewery joined yesterday, totaled 110 mil Norwegian Kroner (not Euro), so much-smaller $14-15 mil investment.

The word “innovation” was used 150x during the Beverage Forum, and that’s before the  innovation panel even started, noted panel moderator Bev Mktg managing partner Brian Sudano.  So innovation very much top of mind for both big and small bev/alc bev cos.  The word “craft” pops up more and more these days.  At the end of 2014, there were 3418 craft brewers, of course, but also 750 craft distilleries (up 20%) and 7,762 wineries, Brian said.  But now here come craft sodas with “major players entering space,” “craft” RTD coffees, with “estate grown” coffee and even “craft” juice, with cold pressed juice for only home delivery. “It’s getting really fragmented,” Brian perhaps understated.  

“The future of innovation,” according to Brown Forman’s innovation veep Lee Tatum: “More local.  More flavor.  More Creativity.”   There will be 4 or 5 new distilleries on Main Street in Louisville, KY by end of next yr, Lee added.  There are “more barrels aging in Kentucky than there are people aging,” he quipped.  Then came perhaps his most interesting comment: “marijuana infused spirits is definitely on the horizon.”  Wha?!?  Yup, tho Lee didn’t definitely say Brown-Forman would go there, he did say for sure such products are coming.  AB innovation veep Pat McGauley perhaps hinted at the same thing when he listed “mainstream marijuana” as trend to watch for beer, along with “functional” bevs,  in yrs ahead.  

Speaking of Pat, his remarks served as a bit of a summation/credo of his AB innovation career.  He will be leaving in early May after leading AB’s innovation team thru 130 new products and 50 mil bbls of cumulative volume in last 10 yrs.  Those products encompassed extraordinarily broad range, “all because we’re managing the needs of the consumer,” said Pat.  Included huge succeses and failures too.  There is “so much more to learn from failures,” said Pat, listing many things that went wrong on brand called Mixxology, for example, that led to lotsa changes and many things that later went right with the Ritas.  

“Learning from our failures is a big part of the innovation process,” said Pat.  He also stressed the necessity of collaboration and teamwork to be successful in innovation. At AB, innovation is split into 3 tiers; “half of our time and resources go against the core” while 20% is “more disruptive” and new SKUs are about 1/3.  AB pays a lot of attention to the “psychographic segmentation of alcohol” to “identify growth opportunities,” including “where our brands overindex and underindex” and then they “triangulate” with consumer trends. Current big trends include “desire for more,”  “trust and authenticity” and “health and well being.”  

Pat also pointed to AB’s track record with top 2 innovation brands in beer in each of 2012-2014. To  get there, AB spends “a lot of time with our key retailers” who “demand” and “lead in the area of innovation.”  To stay on top, AB “working harder on new packaging” and “developing a 3-5 year pipeline.”  Also key, according to Pat, “people development” to “develop the next generation of innovators.”

Total beer biz up 3.4% for 4 weeks thru Apr 19 in IRI multi-outlet + convenience, reported by Morgan Stanley. For 12 weeks now, beer up 1.6% in IRI MULC.  With better overall trends, Constellation volume up 12.5% last 12 weeks; gained 0.7 share of $$.  While Modelo Especial remains its hottest brand, up 23% for 12 weeks, that’s about same as 52 week trend.  But other key Constellation brands notably accelerating.  Corona up 7.6% for 12 weeks, compared to 4.7% for 52 weeks.  Pacifico now growing at double digit clip; up 12.2% for 12 weeks, compared to 4% for 52 weeks.  And Negra Modelo up 14% for 12 weeks (9.5% for 52 weeks).  That’s some pretty good momentum heading into Cinco de Mayo.

ABI volume flat for 12 weeks (-0.1%), but it still lost 1.36 share of $$ in period.  However, Michelob Ultra picking up steam.  Up 15% for 12 weeks, compared to 10.7% for 52 weeks.  Avg price up 0.6%.  Stella up 20% for 12 weeks too (in Nielsen data in separate report from Goldman Sachs).  MC volume down 0.5% and it lost 0.7 share of $$ for 12 weeks in IRI.  But Blue Moon trends getting stronger.  Up 8.3% for 12 weeks, compared to 4.7% for 52 weeks.  Heineken USA volume up 4.3% for 12 weeks, almost identical to 4.5% gain for 52 weeks.  Dos Equis slowed slightly tho still strong; up 14.7% for 12 weeks, 17.5% for 52 weeks.  Boston Beer continues up 13% for last 12 weeks.  While Angry Orchard has “slowed” to 36.7% growth, Twisted Tea line picking up steam.  Twisted Tea up 18.6% last 12 weeks, compared to 12.9% for 52 weeks.