Beer Marketer's Insights
Another long and stinging critique of how AB handled the current Bud Light crisis appeared on the Wall Street Journal website Sunday morning. "How Bud Light Blew It" was the headline in the nation's pre-eminent business publication. But it got even tuffer in the subhead: "With one blunder after another, the brewing giant behind the brand became a case study in how not to handle a culture-war storm."
Another well-funded appliance that was promising to revolutionize bevs has shut down. This time it's Cana, "a molecular printer unlike anything else in the universe" that was claimed to "make anything you want, whenever you want it, starting with beverages," per still-live website. Its shutdown was reported by The Spoon, citing LinkedIn posts from ex-employees who said Cana "could not secure funding and laid off all of its employees last week" after raising $30 mil in Jan 2022 and aiming to have Cana One gizmo ready to ship this year.
LA-based Health-Ade said it's signed multi-year partnership with TV host and media personality Ryan Seacrest to urge Americans to drop their CSDs for kombucha. Deal calls for him to create ads and omnichannel media content that might be off radar of other functional bev brands. Health-Ade cmo Charlotte Mostaed explained premise this way: "Health-Ade Kombucha has been widely sold in the US for over 10 years, and yet so many still haven't tried it, and even more are still drinking beverages that carry no nutritional value." Nothing arcane or obscure about Seacrest affiliations like Live with Kelly & Ryan, American Idol, American Top 40 and On Air with Ryan Seacrest.
It was one of earliest transactions of Anheuser-Busch's Zx Ventures arm: Hiball Energy, organic brand birthed in SF, picked up by brewer in 2017. (Half by chance, we made intro to then-Zx chief prospector Dai Truong at natural foods show, tho it was clear Hiball already was on his checklist.) Now it's among pair of beyond-beer brands that big brewer has deemed surplus to requirements, also including Babe canned wines. A-B also is selling Appalachian Mountain Brewery back to craft player's founders.
Big changes are afoot at Classic Beverage, all-other DSD house in key incubation region of Southern Calif. After exit of many major beer brands left Classic highly NA-focused in its core LA and Orange County territory, it's been quietly expanding south into San Diego, mainly with unaligned craft and import brands but also with select NAs, notably Congo Brands' Alani and Prime. And now its owner CJ Sanchez is handing day-to-day reins over to his energetic evp Michael Blumfield as he segues to new parent co, Newport Cove Investment Holdings LLC, that's been deploying buyouts and other assets into targeted investments and acquisitions both inside and outside bev sector, per memo sent to partners earlier this week. CJ is segueing to chmn role to give more attention to those investment activities while Blumfield takes prexy role. Among the changes, cfo John Thomas and controller Lang Lao are also transitioning to Newport Cove while maintaining oversight of distribution ops. And in his own memo later in week, Michael disclosed elevation of Classic LA ops vp Joe Hwang to svp, adding oversight of sales team within NA-dominant Classic LA's footprint. Joe's been with Classic since mid-2016. And 21-yr Classic vet Manny Gutierrez is getting promoted to vp sales for Classic LA and joins senior leadership team. Among intangible skills Gutierrez possesses, his reputed barbecuing wizardry will be closely evaluated at co picnic in Jun, Blumfield informed the troops. No pressure, tho. As for Blumfield himself, he joined in 2019 after 6 years in field at Heineken, rising from svp sales & marketing to evp and now prexy this month. Cicerone-certified exec had spent prior 9 years at Islands Restaurants.
Following John Mallet's retirement in Feb (see Jan 13 issue), Kirin-Lion's Bell's Brewery has a new GM for its 600K brewing facility in Comstock, MI, and it's a familiar face. Co hired Alec Mull to rejoin the company after he previously worked as Bell's head brewer from 1999-2004 before joining Founders as VP of Brewing Operations for the last 17 yrs, Bell's announced.
Founders of Appalachian Mountain Buy Brand, Brewery Back from AB 9 Yrs After Linking with CBA
Over last 12 yrs, Boone, NC-based Appalachian Mountain Brewery has been on an even wilder ride than many other small breweries. This wk, co-founders Nathan Kelischek and Chris Zieber announced deal to acquire AMB back from AB. In 2013, shortly after opening, it acquired a small publicly traded natural energy co with a federal liquor distribution license and ties to Hooter's franchises under guidance of 3d co-founder Sean Spiegelman. So AMB was one of few publicly traded craft breweries when it formed strategic partnership with Craft Brew Alliance, part-owned by AB, a year later. CBA bought rest of AMB (as well as Cisco and Wynwood) in fall of 2018, about a year before AB announced deal to acquire the remainder of CBA, tho that deal didn't close 'til 2020. Regaining control of co, Nathan and Chris will complete opening of new taproom near Asheville while working to build brand with current distribs.
Standing Out with Simplicity: Stone, Allagash Preach Straightforward Approach at Spring Conf
Stone and Allagash are two beacons in a tuff craft beer mkt, as rare legacy brewers still carving out growth. So how are they doing it in today's fraught environment? Both advocated simplicity, as Stone Brewing/Sapporo USA CEO Maria Stipp and Allagash sales director Naomi Neville shared the stage at Beer Insights Spring Conference yesterday, in panel moderated by CBN senior editor David Steinman.
Ongoing saga over Bud Light promotional post by transgender influencer Dylan Mulvaney took overtly political turn this wk, led by Republican Senators Ted Cruz and Marsha Blackburn, ranking members of the Senate Commerce Committee. The lawmakers issued letter to AB ceo and Beer Inst chairman Brendan Whitworth seeking an investigation by BI Mktg Code Compliance Review Board as well as congressional oversight into the post's origins. Their reason? Concern that the post targeted underage consumers given Mulvaney's popularity among youth. It includes claim that the single Instagram post is "starkly similar to the discredited and now illegal marketing campaigns of cigarette manufacturers," like "Joe Camel," a long-term, frequently used spokes-cartoon for Camel cigarettes.
There are "plenty of headwinds" that could lead someone to expect distrib valuations will decrease, between higher interest rates, tuffer trends and more complexity, OMAC's John O'Connor acknowledged during joint presentation with partner Sean McClaren at Beer INSIGHTS Seminar. But with "more sophisticated buyers" leading the charge, lookin' at long-term stability, synergies, and territories with growing population while utilizing leveraged buyouts, "frankly I just don't see much change up or down in wholesaler valuation over the next several years." And when determining value based on future cash flow, "I'm not convinced with six weeks of data that" Bud Light current steep declines will have "a massive long-term effect." It's "uncomfortable now," and John's "not on record" saying Bud Light's "going to crush it." But "I'm looking ten years down the road," and gotta "play it out."