Beer Marketer's Insights
AB Meeting With Distribs in DC: More Mktg Coming, Incentives Too; Distribs Still Dissatisfied
Not sure exactly what AB set out to accomplish when it met with distributors in DC just prior to NBWA Spring Legislative Conference. The meeting was called for late last week in an effort to deal with the still-swirling Bud Light/Dylan Mulvaney controversy and AB's mightily upset distributor network. AB did promise to spend lotsa dough on Bud Light mktg this spring and summer, starting with big push this week for the NFL draft. Recall, Bud Light is the official beer sponsor of the NFL and the sponsor of the draft. Bud Light will have new creative in coming weeks too. In fact, new Bud Light veep Todd Allen (named last weekend) didn't attend meeting as he was reportedly at a commercial shoot. Meanwhile, AB also offering sales incentives to distribs, but it wants distribs to co-op the expense.
Pepsi Blue Cloud "Not Rushing," Sez Ramon; Still "Learning"; Hard MTN Dew -14% in Mar Scans
PepsiCo is "happy with the learning that we're taking" from Blue Cloud Distribution and Hard MTN Dew, ceo Ramon Laguarta stated on Q1 conference call during Q&A. "Our intention is not to build a large portfolio of products and complex portfolio," he reiterated. Co aims to "focus on a few good brands, develop with strategic partners and then leverage our distribution capabilities to give it to consumers all across the country." And "we're not rushing, we're going at a speed that we learn" to "make this business solid and with the right margins and the right...consumer propositions."
Too early to know just how widespread, but INSIGHTS hearing more about AB price reductions already occurring in multiple states, even before its recent accelerated declines and before peak-selling season. In most instances, AB is rolling back at least part of last fall's price hikes, most commonly on big packages of its premium and subpremium brands. But in NYC, Bud Light 36-packs (a package favored by the home Ds) reportedly rolled back 2 price points.
Another state is pushing back against Pepsi's Blue Cloud Distribution. This time it's coming from a state where Blue Cloud's been licensed for quite some time, one of initial 3 mkts where Hard Mtn Dew launched. Florida Dept of Biz & Professional Regulation (DBPR) filed administrative complaints vs Florida Blue Cloud alleging violations of 2 statutes, our sibling newsletter Insights Express has heard. First count alleges that Blue Cloud submitted "material misstatements" on its application for licensure as an alc bev distrib in state, regarding "disclosure of all parties holding a direct or indirect interest" in its biz. Second asserts that Blue Cloud violated "prohibited interests" statute "by being an affiliate of Pepsi, an affiliate manufacturer of Hard Mountain Dew." (Recall, Blue Cloud sez that Boston Beer is sole mfr of Hard Dew while Blue Cloud is only the distrib.)
Four years ago, coconut water marketer Vita Coco memorably leveraged brand haters in interest of creating a buzz behind its Pressed extension (BBI, May 15 2019). Now oatmilk giant Oatly is taking similar tack, launching a dedicated site for its ardent detractors at easy-to-remember fckoatly.com URL. Site is "devoted to helping our fans—and the thousands of people who hate us—better understand everything that's 'wrong' with our company." After all, "it's super convenient to have the latest boycotts and criticisms all in one place," site notes. "More importantly, we're not the type of company to hide from moments like these. We see all the negative headlines, posts and petitions as an inevitable consequence of trying to create positive societal change."
Ben E Keith's long-serving Beverage Div chief Kevin Bartholomew will retire next Jan 1, succeeded by 33-year vet Flint Prewitt, the Dallas-based Anheuser-Busch distributor announced today. Prewitt has held branch management positions across Texas in Mineral Wells, Commerce and Dallas, most recently serving as vp sales, overseeing all sales and operational execution for bev div. Kevin had held Bev Div prexy role since 2000, reporting to ceo John Hallam. BEK is 3d-largest US house and also manages extensive Food Div . . . Andy Steele, former c-store buyer who had good runs at Coke-acquired Glaceau and more recently Body Armor, has landed new gig as vp sales for c-stores, drugs and FSOP (foodservice/on-premise) for gut pop Olipop. He'd exited Body Armor last month after nearly 5-year run as vp for small-format channels . . . The Gapper has called it a day at Chicago Blackhawks hockey team. Longtime trainer Mike Gapski whose concern for his players' nutritional needs led him to create Coco5 coconut water-based hydration brand, retired last week at age 65 after 36 years with team spanning 2,758 regular-season games and 249 playoff games. Distressed at sports drink options then available to his players, he'd teamed with local Chicago entrepreneur Scott Sandler to create Coco5 (BBI, Sep 15 2016), which has since been sold to group led by NBA player Devin Booker with participation from likes of D'Angelo Russell, Derrick Rose and Charles Barkley. (A few years back we had enjoyable discussion about drink's inception with Mike at Blackhawks morning skate-around at Madison Square Garden ahead of Ranger game that evening that left us with little doubt that he was steeped in science of isotonics.)
POLICY: CSPI, NYC Health Dept Jointly Petition FDA to Set Voluntary Guidelines on Added Sugars
Center for Science in the Public Interest and NYC Dept of Health & Mental Hygiene announced today they've filed dual petition with Food & Drug Administration "to set voluntary targets for reducing added sugars in foods and beverages." Goal over next 10 years is to reduce a person's sugar consumption to less than 10% of calories consumed. "When you account for the naturally occurring sugars in fruit, milk and other foods, there really isn't very much room left in anyone's diet for high-fructose corn syrup or other forms of added sugars," said CSPI prexy Dr Peter Lurie in statement. "Yet food manufacturers are seemingly shoehorning added sugars into cereals, yogurts, breads and virtually every other category of processed or restaurant food. This needs to be reversed - and the FDA needs to show the way."
Can We See Some Soda Deals? Asks Crown Cans CEO Donahue; Sluggish Volumes a Headwind in Modest Q1
Deals. Tim Donahue wants to see soda deals. That theme came up often this morning on investor call by Crown Holdings prexy/ceo following release of Q1 results. While core customers in segments like CSDs and energy drinks are reporting robust topline growth, they're doing that on basis of price and product/channel mix, not volume, and can makers like Crown need volume to absorb the big increments of capacity they've installed in recent years. Tho energy and sparkling water segments are lookin' healthy, including continued influx of new energy entries, much of year will be determined by level of volume-generating activity for CSDs over balance of year, ceo said. "I think everything revolves around CSD promotions and we'd better start seeing that around the Memorial Day holiday," he said. (In US, Crown doesn't do much biz with brewers, he noted.)
After archrival soda seller delivered a strong Q1 yesterday, PepsiCo met the Coca-Cola challenge with its own brisk start to the new year. Net revenue grew 10.2% to $17.85 bil, +14.3% on organic basis, sixth consecutive qtr that organic revs have grown. Gross margin widened to 55.3% from 54.8% a year earlier. Operating profit contracted by half to $2.63 bil but was up 10% on organic basis excluding non-comparable items. PepsiCo Beverages N Amer scored 8.3% rev gain to $5.8 bil. PBNA's operating line plunged 86% to $483 mil on nominal basis but was up 10% after non-comparables are omitted. Revenue gains were balanced among large-format stores, small-format stores and foodservice accts. "PepsiCo organic sales were 500 basis points ahead of consensus with beats in all divisions except one where expectations were met with gross and operating income margins expanding," assessed Consumer Edge Research's Brett Cooper. Third of Big 3 soda marketers, Keurig Dr Pepper, reports Thurs morning.
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