Beer Marketer's Insights
Even with hard seltzer segment's setbacks and "signs" of shakeout, "flavor" in beer & beyond is "still the future," Mark Anthony senior director of category insights Dan Wandel declared yesterday at our Beer INSIGHTS Spring Conference. And Mark Anthony remains the leader in flavor among beer cos, back to growth this yr with shipments +3% in Q1, depletions up 5% in Apr and $$ up 7% YTD in Circana multi-outlet + convenience data.
More "Aggressive" AB Pricing This Summer Is An "Inevitability," Said Circana's Aman Nanda
"Could we see large price cuts in beer this summer if AB gets more aggressive," an audience member asked Circana execs during Q&A after they presented at Beer INSIGHTS Spring Conference yesterday. "That's an inevitability this summer," answered Circana Principal, Analytics, Aman Nanda. "That's going to happen for sure." Stark words. Aman continued: "At some point AB will have to look at what do they do to make Bud Light more attractive and provide deals that are almost too stupid to pass up. That's how you've got to bring it," Aman added. And "when that happens, there's some sort of spiral that has to come in," he noted, probably in form of promos vs front-line reductions, because of the season. More on Circana presentation in future issues of our publications.
Throwback Thursday
This week in 1987, INSIGHTS reported on key ruling won by PepsiCo because of its strong soft drink territory law, something needed in beer industry. Pennsylvania AG sued Pepsi and some of its bottlers, claiming they violated antitrust laws when they took measures to stop transshipping. US Dist Court dismissed suit concluding the Soft Drink Franchise Law would "allow PepsiCo to limit its bottles to sales of product to those who, in turn, would sell only to the ultimate customer." AG charged PEP used coding systems to track transshippers, fined bottlers who transshipped and refused to deal with bottlers who had done so. Court ruled: "We view these practices as being legal since they are being used to enforce a legal ban on resales," and that "the practice of discouraging sales between resellers is reasonably designed to control transshipping and sanctioned by the Act."
AB's lookin' to build on an "incredibly strong Q1" for Busch Light, increasing media spend 3x this yr, head of value portfolio Krystyn Stowe shared. That'll be 16x bigger investment over summer mos vs last yr, with ads across cable TV and streaming, "not just NASCAR races," she underscored. Fifteen wks on air, "eighteen percent higher reach" per week, Busch Light is stickin' with the Busch Guide by Busch Guy theme. Country music and NASCAR are still the name of the game, starting with CMA fest in Nashville comin' up in June and full slate of "up and coming artists." Farm Rescue partnership will continue with "heavy-up" on assets in key mkts like TX, OK, AR, TN and FL. Busch Light's cross-brand partnership with Jack Links, including cross-branded ads, is set to begin later this summer.
Mich Ultra Spending Up 50% in Summer Mos
Mich Ultra momentum accelerated Jan-Mar, brand veep Ricardo Marques shared. In Apr, Michelob family $$ were flat and volume was down 3% for 4 wks thru Apr 30 in Circana multi-outlet + convenience data. But AB's lookin' to counter as mktg spend will increase 50% vs last yr in summer mos, including 3.6x Hispanic media spend. F1 racing partnership, new partnership with boxer Canelo Alverez, new pickle ball program and partnership with Alex Morgan for US women's world cup, plus NBA playoffs/finals and PGA are top sports programs. Running will continue to be major theme with new creative this summer. Regionally, Mich Ultra's "primary focus" is in stronghold mkts like TX and FL, plus "select markets" in the South. And co will intro new infusions flavor, Mango y Chile with 2x sampling spend.
AB's 3 smallest megabrands playing offense continued to accelerate in Apr. That includes "significantly accelerated" Cutwater sales, back to gaining share of RTDs thru Apr 23 in Circana data cited by Beyond Beer veep Fabricio Zonzini. NUTRL "maintained" its #2 spirit-based seltzer position and "strengthened" share position by 0.5 pts since early Jan. And Kona Big Wave sales accelerated strong double digits in Apr after points of distribution grew 63% in Q1, Andy Thomas shared separately. AB also restated its "ambition" to make Stella Artois the #1 "European-style lager." It still has a way to go off-premise, tho on-prem gap is narrower.
Just 2.5 wks into his new role as Bud Light veep, Todd Allen spoke to distribs about summer brand plans at AB's Seize the Summer mtg last week, sharing how AB will implement plan to increase commercial investment 3x over summer mos vs 2022. Bud Light will put extra mktg $$ behind its campaign "Easy to Drink, Easy to Enjoy," lookin' to dial up "how we bring people together" over football, country music, and backyard BBQs. That work started with NFL draft, including a new TV ad that debuted draft weekend, and Stagecoach country music festival. Notably, distribs were generally pleased with mktg they saw across the board, especially on Bud Light, it seemed. But lotsa questions still remain about lasting impact on Bud Light and beyond from boycotts.
Top brewer's beyond beer portfolio is about to get a little bit smaller. AB will discontinue wine brand BABE and non-alc energy brand Hiball, it announced today. Co acquired Hiball line of organic energy drinks and sparkling waters back in 2017 as it expanded its non-alc efforts. It first partnered with prior marketers of BABE canned wines thru Zx Ventures investment in 2018 then acquired it outright the following year. Today it instructed wholesalers to sell thru in-code BABE inventory and continue to support Hiball programming with retailers til fall resets.
In recent years we've seen a bunch of new RTD tea and coffee players looking to make noise with in-your-face branding under names like Weird Tea and Bad Tea. Add to this an emerging coffee play out of Chicago called Loud Brew, 7.5-oz cold-brewed offering fortified with jitters-reducing L-theanine and couched in psychedelic graphic treatment. Brand has focused mainly on Chicago so far and recently enlisted rapper who goes by Riff Raff on way to building out renegade brand that extends into teas, apparel and beyond. It owns other trademarks like Quiet Brew. Riff Raff was appealing partner, cofounder/ceo Zach Rudd said in meeting yesterday at Chicago's Piece Brewing & Pizza, because he's a vegan and also a "loud and abrasive character" in keeping with brand ethos.
Trader Joe's, which has grown to 543 US locations, said its chmn/ceo Dan Bane is retiring after 22 years at helm, to be succeeded by Bryan Palbaum, the grocer's prexy/coo. Transition will occur on Jul 2. Jon Basalone, prexy of stores, will be promoted to vice-ceo and prexy of Trader Joe's, which is owned by same family that controls German retail giant Aldi. Reflecting longevity that chain inspires, Bane has been there for 25 years all told, Basalone for 33 years (starting as crew member) and Palbaum for over 20 . . . Sparkling Ice marketer Talking Rain Beverage has recruited the Coke system vet Katie Giesler to serve as vp of sales for national accounts, overseeing management of customers like Kroger, Albertsons Safeway, Walmart, Target and convenience channel. She began her career as district sales mgr at Coca-Cola Enterprises and following that bottler's acquisition by Coke, led customer teams at Coca-Cola Refreshments in foodservice, on-premise, convenience retail and retail sales. She then headed to Coca-Cola N Amer to lead West Supers Regional Retail biz calling on Albertsons and Target. Most recently, she moved back to indie bottler side as head of commercialization & marketing at Swire Coca-Cola.