Beer Marketer's Insights
April ended with one of newsiest weeks for legal adult-use cannabis mkt in recent memory. Just after Delaware gov allowed bills decriminalizing possession and establishing a legal mkt to become law without his signature, the Minnesota House and Senate each passed different versions of an adult-use bill. Advocates in Ohio are poised to put a proposal before voters in Nov, too. And mid-week, 40 US senators and 10 reps re-introduced a standalone SAFE Banking Act that would ease access to capital for the budding cannabiz.
With Memorial Day kickoff to summer selling season less than 4 weeks away, bev promos remain subdued, with major players willing to ride higher prices to strong sales results and improving gross margin at the cost of flat or declining volumes. So who's likely to blink first? At can-making giant Ball Corp, ceo Dan Fisher seems to suspect it will be share-losing brewers, judging by his remarks on Q1 earnings call this morning, tho he's not willing to bet on it by upping his guidance on 2H sales.
Throwback Thursday
This week in 1989, Beer Institute prexy Jim Sanders stressed that "number one objective" for industry was to "differentiate" beer from illegal drugs. "We're in a war and we're losing that war," he told Wisc distrib mtg. He spoke about lots of wrong comparisons between beer and illegal substances put out by media. Jim talked too of recent poll that asked consumers to associate each alc bev with one word. Most frequent answers: Wine-Food; Beer-Sports; Whiskey-Drunks. Jim said: "We can't take on their [spirits] fight too. Let's solve our problem. Beer is different from all other alcohol beverages. It is the most moderate of all alcohol beverages. Let's keep talking about beer."
Another instance of spirits dippin' toes further into traditional beer spaces. Monaco Cocktails, one of the leading canned cocktail players, inked new partnership to become the "Official Hard Lemonade" and "Canned Vodka Cocktail of UFC," cos announced. Partnership is focused on Monaco Hard Lemonade, a 9% ABV ready-to-drink cocktail with two shots of vodka in every can, touted as a "natural fit" and "the ultimate beverage for bold consumers who are looking for high energy moments," per release. Monaco will have "deep level of integration into key UFC assets, including live events and broadcast features in select U.S.-based Pay-Per Views, and prominent branding" in the "Octagon." Brand will also "have presence" in the upcoming season of "The Ultimate Fighter," which is making its debut on ESPN and features world-famous fighter Conor McGregor and lightweight contender Michael Chandler as coaches. Plus, they'll collab on digital/social content, "which reach more than 230 million users worldwide," and have an "annual Brand Ambassador fund."
Some AB distrib deals still able to get done amid all the noise and impact on Bud Light. In IN, Mid America Beverages merged with small 250K-case AB house Boone Beverages, Paragon Beverage Advisors' Mark Hall shared with INSIGHTS. Deal closed last week as Mid America absorbed the Boone entity, adding to co's territory in-state. But one of the Boone owners, Jake McQueen, is staying on and retains a small stake in the combined cos. Mid Americas sold ~2.4 mil cases annually prior to deal, including AB, Constellation, and several craft suppliers. INSIGHTS is hearin' of other AB distrib deals getting done (or close) too. Stay tuned.
Imports Popped in Mar as Mexican Imports Grew 12%; Cans Pickin' Up Steam; Draft Growin' Fastest YTD
After a tuffer start to the yr, imports returned to solid shipments growth in Mar, NBWA chief economist Lester Jones shared in LinkedIn post citing US Dept of Commerce data. Imported beer grew 7% in Mar, improving to +0.9% thru Q1 (excluding NA beer, cider, perry, mead & NESOI products). Mexican beer imports fueled recovery as shipments jumped 12% for the mo, improving to +0.5% YTD (excluding Corona Seltzer drops included in NESOI category and gain from Corona NAs included separately in NA imports).
ABI ceo Michel Doukeris leaned into the Bud Light controversy early in his prepared remarks during ABI Q1 conference call. He spoke for several minutes, reminding that this was a single can not available publicly, a single post, not an ad or campaign (familiar points by now). Then he addressed what's happening in US "through the lens of three areas that are very important": "our people, our consumers and beer."
Join us for the 2023 Beer Insights Spring Conference coming up May 17-18 at the Four Seasons Chicago. This yr's program will feature plenty of topical and timely content for beer distributors. Get the most up-to-date and in-depth review of trends and topics plus fresh insights from BMI prexy Benj Steinman. Take a deep dive with top attys into the legal dilemmas facing distribs as a consequence of convergence, on hot button issues like supplier contract demands, potential state regulatory obstacles, increasing govt scrutiny, and much more.
In the calm before the storm, it was a more-or-less typical qtr for AB in US: shipments down 1.6% but revs up 4%, with rev per bbl up 5.6%. Reported sales-to-retailers were down 3%, "estimated to be below the industry." So AB lost share and it also once again shipped well ahead of depletions. Those extra shipments certainly helped AB EBITDA get to flat, and that's also very much the usual result for US earnings, even as global ABI EBITDA up 13.6% in qtr (see below).
There are all kinds of celebs behind bevs these days: TikTok influencers, wrestlers-turned-actors, you name it. Recently launched healthy kids drink Plezi has offered one that seems unprecedented to us: former First Lady Michelle Obama, who famously made Americans' nutrition a key part of her mandate at White House. "I'm here today because I still believe that businesses can move faster when it comes to our kids' nutrition," she said in statement via Plezi and its incubator LA Libations and developer Juggernaut Capital. "Because I believe there is a way to build a successful company and do right by our kids . . . that we can make products that are tasty and healthy and good for the bottom line. And I'm putting some skin in the game to put this theory to the test." New line contains 75% less sugar than mainstream plays, no added sugar, along with fiber and nutrients like potassium, magnesium, and zinc.