The 2015 Beer INSIGHTS Spring Conference, focused on the exciting high end of the beer biz,  will take place Monday late afternoon May 11^th and all day Tuesday, May 12^th  at the Ritz Carlton in Chicago.  Don’t miss interviews, panel discussions and presentations including top high end execs: Constellation’s Bill Hackett, Boston Beer’s Jim Koch, Heineken USA’s Dolf van den Brink, AB’s Felipe Szpigel, Tenth and Blake’s Scott Whitley, Mike’s Hard Lemonade’s Anthony von Mandl, Firestone Walker’s David Walker, Revolution’s Josh Deth and Cigar City’s Joey Redner.  The conference program will feature hot topics, keen quantitative analysis, actionable insights and much more.  Get up-to-date with the latest high-end trends and network with your peers at the Beer INSIGHTS Spring Conference. Space is limited. Click here for more information and click here to reserve your spot.

Tecate “has been named the official presenting sponsor and the exclusive beer sponsor” for highly anticipated boxing match between Floyd Mayweather Jr and Manny Pacquiao coming May 2, Heineken USA announced earlier today.  The fight “expected to break previous records for PPV sales, audience size and revenues,” noted release, citing ESPN report.  HUSA won “fierce bidding battle” against Constellation’s Corona Extra “which has sponsored Mayweather’s fights for years”; reportedly paid $5.6 mil for the rights vs Corona’s $5.2 mil bid.  “We wanted to make sure we were aggressive but also fiscally responsible,” and “were very comfortable with our decision to remove ourselves from the bidding process,” one spokesman for Constellation Brands told AdAge in separate report.  Leading up to the fight Tecate will also launch “extensive marketing campaign” in Las Vegas from Apr 6 to May 3 called #MyBoldOpinions, where Tecate asking fans (21 and older) for their opinions about what the outcome of the fight will be via social media (offshoot of its current TV campaign, Born Bold).  It’ll select “best, boldest, most passionate posts and select those topics to be discussed on film by some of boxing’s legends, including Sylvester Stallone and HBO sports commentator Larry Merchant.”  On top of social media campaign, it’ll “conduct strategic promotions for a chance to win tickets to attend this sold out event, Pay-Per-View home packages and Pacquiao-signed memorabilia.”   

“But is the sponsorship worth the cost?” questioned AdAge.  “Consider that the reported $5.6 million price tag is roughly enough to pay for the title sponsorship of an NBA arena for a year, or to sponsor a big concert tour according to Jim Andrews, senior VP-content strategy at sponsorship consultancy IEG.”  Still, it’s not “an outrageous number,” Jim feels, because of “what they are going to be able to do surrounding it” and “a lot of attention on this fight.”   Recall, HUSA goal is for Tecate franchise to grow 10% in 2015; it boosted brand investments this yr, expanding into English TV (ads) and adding “more sales people on the ground” (see Mar 3 issue).  Tecate franchise is up 5% in IRI multi-outlet + convenience data yr-to-date thru Mar 22, tho that’s still all from Tecate Light (+45.6%).  Tecate regular $$ down 3.4% YTD.     

AB branch in Portland has now bought rights to sell 10 Barrel craft brands in its territory and Maletis Bev will get Montejo and Oculto in its AB footprint.  Maletis continues to sell 10 Barrel in its AB territory as well.  This resolved footprint spat that popped after AB purchased the hot craft brewer.  Recall, Maletis sold 10 Barrel in branch territory, outside of its AB footprint.   AB really dislikes its distribs competing against other AB distribs.  So AB did not assign Oculto and Montejo to Maletis; branch sold Oculto and Montejo in Maletis AB footprint instead.  But all’s well.  "We have negotiated a transition of the distribution rights to 10 Barrel’s brands from Maletis Beverage in Portland to Western Beverage’s Salem and Portland, Ore., territory, effective today," A-B announced yesterday. “As a result of this transition, we will now assign Maletis Beverage the distribution rights to both Montejo and Oculto” in its territory.  AB’s position “has always been that we want our brands distributed by our equity wholesalers within their assigned Anheuser-Busch territories." 

Enjoy Beer is an ambitious new enterprise that is a partnership between private equity firm Friedman, Fleisher & Lowe and Harpoon founder Rich Doyle.  And it just bought stake in Abita.  Abita owners will continue to have stake in Enjoy Beer, Rich told INSIGHTS this morn.  It is the first of a number of planned investments.  Enjoy Beer looks to form a number of partnerships with other craft brewers. It’s not a fixed number but ideally around 5, according to Rich.  And Enjoy Beer intends to go public somewhere down the road.  San Fran-based Friedman, Fleisher & Lowe has $4.5 bil under mgt.   Founder David Blossman will remain ceo of Abita.  Recall, Rich sold his stake in Harpoon to an ESOP. 

New enterprise “will create partnerships with additional top craft brewers who wish to preserve their local independence, while gaining shared resources in such areas as marketing, sales, purchasing, logistics and finance, in order to compete with large-scale corporate competitors,” said announcement.  Rich will build out team of execs, around 6 or 7, which will help Abita and any subsequent craft partners run their craft bizzes better.  Already on board, former Ninkasi mktg and sales exec Jessica Jones, who will be cmo of Enjoy Beer.  Abita was the #20 craft brewer in 2014.  It sold 161,000 bbls, up just 2%, following 5% growth in 2013. But it’s up 13% in IRI multioutlet + convenience yr-to-date thru Mar 29.  In recent yrs, Abita had huge $30 mil expansion project and was capacity constrained.

As AB InBev launched “Let’s Grab a Beer” and the internet teems with various and sundry celebrations of the ending of Prohibition (for beer, first) on April 7, 1933, a handful of highly visible colleges are adopting prohibition measures anew.  In NJ, Rutgers University announced today a “moratorium” on fraternity/sorority parties for the rest of the year.   The 86 Greek orgs on campus will have to cancel any planned parties and be limited to “a single end-of year, off-campus ‘formal’ event where third-party vendors may serve alcohol,” the Huffington Post and others report.  The moratorium or “social probation,” as the school calls it (there remains a prohibition on using the term Prohibition) came about in the wake of “a number of alcohol-related incidents this year involving Greek organizations,” said a spokesperson.  Those incidents included the death of an underage student last fall from alcohol poisoning.   Rutgers’ policy followed the banning of all “hard liquor” at U. of Penn and Dartmouth earlier this year.  And Brown banned all alcohol, “hard or not, from being served at residence hall parties or fraternity and sorority events,” according to the Daily Pennsylvanian. 

The college bans are on a similar track to the increasing bans of specific products in some downtown neighborhoods.  A number of cities in Washington State (and elsewhere) have instituted these bans ‒ usually of malt liquors, high-ABV beers and fortified wines sold at low prices ‒ to reduce the problem of public inebriation.  In Wash, specific neighborhoods are designated “Alcohol Impact Areas” where the bans are in force.  But as the Wash beer and wine distribs assn pointed out recently when the city of Olympia attempted to expand its list of banned products to 64 from 9, there’s been little or no proof that such bans “work.”  These recent campus and AIA policies have been criticized as short-sighted, unenforceable and doomed to drive drinking underground (or in the case of AIA’s, to the next block), by students, store owners and some alcohol policy experts alike.  Public health advocates tend to embrace them, on the other hand, as legitimate attempts to reduce overdrinking.  But they are a measure of how frustrated and desperate college administrators (and some city officials) have become in search of solutions to ongoing, intractable problems.  They are also an indication that Prohibition never really goes away. 

Today is Natl Beer Day celebrating the 82d anniversary of the end of Prohibition.  In conjunction, ABI launched ambitious web-based category-building initiative called “Let’s Grab a Beer” with “lots of tentacles,” as beer category veep Julia Mize told INSIGHTS.  It’s part of larger global ABI initiative, that looks at beer biz across the globe and seeks to build beer as a category, and “promote beer vs spirits.”  Some of messaging is similar to that used in Beer Institute’s “Brand Beer” campaign to influence policymakers. But with this consumer-facing program, AB has gone its own route, at least for now.

AB launched website www.letsgraba.beer, intended to “create connections with millennials,” Julia told INSIGHTS.  Website will serve as content aggregator, not just for AB-exclusive content, but for influencers, bloggers etc.  There will be very little branding if at all. Indeed, AB open to other brewers, BI, etc pitching in to promote drinking beer and celebrate at letsgraba.beer.  It’s about “elevating beer, making it relevant for the long term,” said Julia.  But “we’re just getting started” and wanted to “launch something” today on National Beer Day.  So call this Let’s Grab a Beer 1.0, she said, but there’s “a lot more in the works.” 

A coupla other components to the campaign have already launched.  It has a twitter handle @letsgrababeer.  AB also working with someecards, including a site takeover to celebrate Natl Beer Day, with 5 cards already available.   That partnership launched late last week and the #1 card: “Beer is my favorite 4 letter word” already shared 50,000 times.  

Craft Brew Guide will be available later today digitally.  Get your copy of this year's edition of the best compilation of data and analysis available anywhere on the fast-moving, ever-changing craft brew biz in the US. Craft Brew Guide includes key numbers: segment totals, top brewer totals (every player 100K bbls+), retail trends and more. Craft Brew News and beer marketer’s INSIGHTS editors provide analysis of trends, top craft brewer profiles and put craft in the broader context of US beer. Graphics bring the numbers alive and PDF and book are handy for quick reference or extended review.   Brewers, distribs, retailers and suppliers alike need Craft Brew Guide to stay on top of trends, plan strategy, bring staff up to speed and more. Click here for more info and to order your copy. At only $199 for the digital edition or $249 for both digital and print, Craft Brew Guide is a great value addition to your personal and company libraries or for use as a training tool with your sales team and/or new hires.  Call for special multi-copy rates. 

Recall warning from atty  Chris Cole a few wks back at NABCA legal symposium that alc bev biz has “target” on its head for court claims alleging deceptive adverting/labeling, and that Calif courts especially receptive to such claims.  Well, another attempted class action just filed vs AB in Calif state court.  This one seems even weirder than charges over Beck’s, Kirin and alcohol content labeling.  Plaintiffs accuse AB of “misleading consumers by labeling its Busch beer as made in the US when in fact the beer is made with imported hops,” reports Law360.  Calif apparently has law that you can’t label product American-made if ingredients produced outside US.  Since imported hops are “significant portion” of Busch, plaintiffs allege AB’s “Product of the USA” label is deceptive and that they would not have bought Busch, or not have bought it as often or paid as much, if they knew about the imported hops.  “We look forward to working with Busch to ensure that its cans are properly labeled in accordance with California law so that consumers know exactly what they are getting,” one of the plaintiffs’ attys told Law360.  They’re also lookin’ for money.

AB’s undergoing a “significant cultural change” as it shifts many sales and mktg jobs to New York City, reported Advertising Age.  AB’s NYC office will include a public beer garden on the ground floor, and will eventually fill 250 sales/mktg positions, including 40-50 new hires. Besides new hires, Jorn pointed out that “100% of his direct reports” are transferring to NY, and “a very high percentage of people” in St Lou were asked to make move, tho not all wanted to uproot, so co “trying to find other positions in St. Louis,” wrote Ad Age.

Meanwhile, AB’s “casting a wide net,” in NYC, looking at “some 600 candidates” to fill 40-50 news sales/mktg  jobs for NYC office.  AB has begun “an unorthodox and aggressive recruitment effort” by analyzing how candidates handle themselves in both biz and pleasure settings.  Candidates are encouraged to unwind at “happy hour” on Fri nights but also be prepared for intense interviews on Sat that include “panel” interviews in which 5 execs interview 5 candidates all at the same time.  AB used similar approach in Brazil when hiring for its global mgt program.  “We tend to be pretty aggressive in those interviews, meaning we sometimes pitch candidates against one another just to see how they stand up in our organization,” said mktg veep Jorn Socquet. 

Besides large talent pool in NYC, AB will also have closer/easier access to “key partners” including “ad agencies, sports leagues and music and entertainment execs,” noted mag.  “If you really want to have a good working relationship with agencies, you’ve got to meet them as often as you can,” said Jorn. Move will make it easier for him to meet AB’s current ad agencies and explore others too. “I think ‘AOR’ (agency of record) is a very dated term, and I really don’t like it,” asserted Jorn. “On the other hand, I am very loyal to agencies – I should say that I am very loyal to creative people in agencies.”   

Anheuser Busch InBev “valuation appears rich,” wrote HSBC’s Carlos Laboy, initiating coverage with a surprising “reduce” rating in late Mar.  Carlos is longtime ABI watcher, who correctly forecast deal to takeover AB and has often written far-ranging reports, including one last summer where he argued Coke could make most attractive ABI target of all.  So what’s his rationale now?  While Carlos sez it’s “not easy having a Reduce stock rating on a great blue chip company” such as ABI, he argues that “absent a strategic transaction we are worried that this stock might underperform the market.” 

Why?  “The erosion of volume” in North America “is on a long term decline and may still be negative this year even as the US economy gets relief.”  North America “is an important drag on growth and offsetting this may require tough management decisions.”   New NA prexy Joao Castro Neves “is a very experienced operator,” but is “likely still executing his predecessors’ planning cycle for 2015.  It will be interesting to see where his vision takes him for the 2016 plan.”  How about M&A?  While “we like the idea of a SABMiller + ABI tie-up on its strategic merits… the economics of it might not be the optimal deal” for ABI or SABMiller’s “core holders.”  As for Coke, Carlos referenced “recurring rumors” of Coke-ABI, brought up recently by Wall St Jnl, noting “there are strong merits to this scenario” but also “some questions over whether Coke is still too big or too far from beer for ABI.”  This paper came out before Kraft deal, so contains no comment on that. 

Carlos now envisions as one possible “alternate scenario,” one that includes “no transformational deal…. A slow growth ABI with no M&A would mark a major departure for this company from its history.”  Absent a big deal, Carlos envisions a base case scenario that he says investors should use to price stock.  That includes continuing 1% volume declines in North America and only 2% pricing for next 10 yrs.  This combo “gives the company 1.2% 10 year CAGR in revenues at its biggest business unit.”  Conclusion: in his view “strategic M&A seems increasingly necessary for new sources of growth and to justify a rising valuation.”  Joining Carlos on his team, his former colleague at Credit Suisse and more recently an analyst at Santander, Tony Bucalo.