Beer Marketer's Insights
"UNFI's profitability disintegrates as forecasting challenges persist," Grocery Dive headlined as shares of broadline distributor skidded after it reported 89.6% crash in its fiscal Q3 earnings. UNFI ceo Sandy Douglas attributed collapse to forecasting glitches and undue operational complexity he inherited from 2018 acquisition of Supervalu, itself a mix of acquired operations. This occured despite a 3.7% topline gain to $7.5 bil, almost hitting analysts' expectations. The former Coke exec promised "immediate cost mitigation actions to improve the profitability of our business in the near term, with these near-term profitability enhancements projected to deliver over $100 million of annualized benefits." UNFI had shocked investors 3 months earlier with disappointing Q2, making now for two "disappointing and frustrating" quarters, as Douglas lamented to shareholders today.
Another Super Bowl Tie-In for AB
Turns out New York Giants coach Jim Fassel was a beer man way back when. AB distributor Whitey Littlefield of Long Beach Calif gave Fassel his first job after he hung up his cleats 25 yrs ago. "An unbelievable salesman. . . one of the best we ever had," Whitey told NY paper.
Microbrewers Workin' Together
Small brewers have been discussing alternate distributors for yrs. In micro stronghold Colo, which has 67 brewpubs, 20 micros, and 5 regional specialties, Indian Peaks Dist distributes beers from 12 small brewers and sez it turns profit. In turn, some of those brewers deliver Indian Peaks brands in their territories. It's now a 150,000-case co, founded by 1 of Colo micros. Indian Peaks won't grow much more "so each brewer maintains a strong position" within distrib, wrote Denver Post.
AB Ads Rated Super . . . Again
AB had 3 of the 5 most popular ads during the Super Bowl including the top-rated commercial for the 3rd straight yr according to USA Today's ad meter. "Anheuser-Busch was without a doubt the commercial champ of Super Bowl XXXV," echoed the NY Post. AB, by the way, owes a thanks to Miller since star of new Bud Light campaign (Cedric "The Entertainer" Kyles) got his start after winning a comedy search contest sponsored by. . . Miller Genuine Draft.
AB and Coors Had Strong Yrs in Colo
AB up 87,000 bbls, 6% and Coors up 29,000 bbls, 5% for full yr in Coors home state and where AB also has big brewery. Miller, which just changed its Denver distrib, down 29,000 bbls, 6.5% to 419,000 bbls (total about 6 mil cases) in state. Heineken and Barton each up 12% in 2000 in Colo. And Molson, which shifts to Coors network, dropped 4,000 bbls, 12%. It doesn't sell much in Colo. Anthropology Expert Criticizes Equivalence "Most people, most of the time, treat different kinds of drinks in very different ways. . . They drink them at different paces, in different places, for different reasons." So writes Brown U Anthropology prof/veteran researcher Dwight Heath in great new book titled "Drinking Occasions." Tho "convenient" for survey-researchers to say '"a drink is a drink is a drink,' in quantitative terms. . . in qualitative or behavioral terms, one might say with equal conviction that 'a drink is not a drink is not a drink.'" Irony: book funded in part by big distillers. Dwight also takes apart neo-prohibitionist bedrock beliefs, makes strong case that "most people drink for pleasure and view drinking in a positive light."
Court Upholds Calif Sweepstakes Ban Again
Appeals Court judges just upheld ban on sweepstakes in Calif. Means brewers can't give away anything worth more than 25 cents in promotions, otherwise it's construed as "premium" or illegal gift. Issue has ping-ponged around courts for yrs. Coors led way on current legal challenges. While industry execs, state officials dickered over sweepstakes, Calif consultant Roger Hanney points out that increasingly common coupon scan back programs "are quietly threatening the very essence of our tied-house laws and Free Goods statute, not to mention the beer price-posting laws." Stay tuned.
Miller Took Hit Too in 4th Qtr
Miller's oper income down $27 mil, 31% to $59 mil as "underlying domestic shipments" down 9.5% in 4th qtr, according to PM. ("Underlying" means currently- held brands, excludes Molson and Miller brands discontinued in 2000 for both yrs). For full yr, Miller's oper income up $28 mil, 5% to $543 mil, but down in 2d half. Oper income up even while "underlying domestic shipments" declined 2.6% to 40.6 mil bbls, wrote PM. Miller at 3.4% of PM's corporate 2000 oper income.
Ex-football great and ex-Schlitz distrib in LA, Willie Davis written up in Wall St. Jnl this week as 1 of top 10 busiest directors on boards of corporate giants. Willie sits on board of directors of 7 different cos including Sara Lee, Dow Chemical, MGM, K-Mart, etc. He makes $240,000 per yr from his board activities alone. He's also prexy and CEO of All Pro Broadcasting.
What's Up, Docs?
American Medical Assn continues to pound alc bev industry. Look at 2 shots. 1st: pre-Super Bowl press release rappin'responsible drinking ad AB has on tap for big game: "parents of America need more than a 30-second commercial from an alcohol marketer," AMA fretted. Called on AB to "stop advertising cute animals talking about beer in places that children regularly watch, listen and read," including Super Bowl. 2d: quarterly update of AMA's neo programs rapped recent attacks by college admins on phrase "binge drinking" (who correctly say word bein' misued). "Let's not become unwitting allies of the alcohol beverage industry," AMA warns. Sez in-dustry behind attack on "binge" to protect profits gained from young drinkers.
Is Old Beer a Health "Risk"?
That's what Kirin claimed in court case. After AB and Kirin hooked up in US back in 96, Kirin tried to transi-tion its network to AB distribs, but 1 Va distrib refused to sell. Offer for his 11,000 cases went up to $20 per case. Still no go. Kirin terminated about 1 mo later, allegedly because distrib violated its "old beer" policy. Amazingly, in termination letter, Kirin claimed that "out-of-code beer poses a genuine health risk to the public." Huh? At a later hearing before Va ABC, Kirin again emphasized supposed risk. When distrib's atty later de-posed Kirin exec about "risk," he said: "It's not, I wouldn't say it's fatal." That's 1 way of saying it. Here's an-other. Distrib's atty also pointed out that pull date for Kirin in Japan is 9 mos instead of 6 mos, as in US. When he asked Kirin exec "if Kirin was guilty of subjecting the people of Japan to a health hazard," the exec respond-ed: "the environment is different."