Beer Marketer's Insights
Yes, Bud Light backlash is on beer side, but it's scary reading for any brand marketer trying to straddle polarized nation on fraught issues like LGBTQ, a community many bevcos have consistently supported for many years. And from what we're hearing, it's having an impact on NAs moving thru Anheuser-Busch system as some retailers tell fleet to stay away from their stores.
DEALS: With Planned Acquisition of Glory Juice, Pangea Natural Foods Moves into Bev Space
Publicly traded food copacker Pangea Natural Foods said it's entered into deal to acquire Glory Organic Juice in all-stock deal that brings it into bev segment. Operated by ceo Pratap Sandhu, who'd founded Prabu Sweets 2 decades earlier, Pangea makes vegan patties, ghee and vegan chicken nuggets, and serves 250 retailers including Loblaws, IGA, Save-on-Foods, Fresh Street Market, Sobeys, H Mart and Urban Fare. In operation 9 years now, Glory Juice maintains 3 retail locations in Vancouver but also offers cobranding and white-label capabilities for its juices, nut and seed mylks, ready-to-blend smoothies and wellness shots.
As first of Big 3 soda makers to report its first qtr, Coca-Cola today delivered strong performance, growing revenues 5% and strengthening gross margin as more lucrative instant-consumption channel continued to gain strength. "A strong first volley into a 2023 where KO looks ahead of plan," as Wells Fargo's Chris Carey characterized qtr. And while KO's innovation is mainly confined to big bets these days rather than incubating or acquiring smaller brands, KO reported continued progress in range of categories among its key trademarks. On dairy side Fairlife - now a billion-dollar brand - has seen strong run out the gate by Fairlife Nutrition Plan subline that offers 30 g of protein vs core line's 26 g as well as range of vitamins & minerals, Soylent-style. Also doing well is Smartwater Alkaline with Antioxidant after earlier foray with straight alkaline water didn't get far. In Japan, co has relaunched its venerable Georgia Coffee with eye to complementing intro of more-premium Costa Coffee RTDs as co moves to double-pronged strategy in that market. And of course there's range of alc experiments, lately Jack & Coke RTD in partnership with spirits giant Brown-Forman. As chmn/ceo James Quincey readily acknowledged, work remains to be done on struggling sports drinks, where acquired Body Armor brand has moved into decline. More on that in a bit.
More Fallout from Unprecedented Bud Light Controversy; Volume Down 21% in Latest Week; Mktg Shakeup
Right now this is an extremely difficult scenario for Anheuser Busch, the Bud Light brand and for AB distributors. Sales got hit even harder in latest week thru 4/15 of NielsenIQ data from Bump Williams Consulting, with volume down 21% nationwide. There is still so much negative media attention focused on Bud Light and the Dylan Mulvaney controversy. And two of AB's sr mktg personnel, Bud Light veep Alissa Heinerscheid and "her boss" mainstream veep Daniel Blake took "involuntary" leaves of absence over the weekend, the Wall St Jnl reported today. Alissa announced late Friday and Daniel over the weekend. AB will meet with its distributors tomorrow in DC, just prior to the NBWA Spring Legislative Conference. Distribs are looking for a much more pointed and well-developed plan on how AB might stem the onslaught of negative attention and sales trends.
At request of Comité Champagne, a trade group for "houses and growers" of northeastern French sparkling wines, "Belgian customs crushed more than 2,000 cans of Miller High Life" on Apr 17, per AP. Apparently the champagne crowd doesn't like High Life calling itself "The Champagne of Beers" for over 100 years. This week "that appropriation became impossible to swallow," wrote AP.
Vast majority of consumers are well aware of alc bev price increases on premise, and an increasing number of consumers are reducing their drinks on premise as a result, latest CGA survey found. Nearly 9 in 10 consumers (89%) say "they have noticed an increase in the price of alcoholic drinks" in 2023 and 38% "have been consuming fewer drinks than usual as a result." Tho price increases seem to have lower impact on both beer and mezcal, CGA added. And beer and tequila remain top choices for consumers on prem. Still, there's an increasing "appetite for deals and discounts," as 1/3 of consumers say they participated in promotional offers over the last 3 mos. Two-for-ones, happy hours and bucket deals are the "most popular" promos.
Imports Over Half of Beer's On-Prem Gain for 52 Wks, Per CGA; Mexican Import Draft Comin' On
Imports, driven by Mexican imports, remain the hottest category on premise over 52 wks thru Feb 25 in Nielsen CGA channels. Total imports were 52% of beer volume growth for period, CGA shared in latest update. Mexican beer drove 79% of total import gain followed by Irish (10%), Italian (2%), Japanese (2%) and Dutch (1%) growth contributions. Strongest Mexican import trends on prem were on opposite coasts in WA (+23%), NY (+22%), OR (+21%). Trends were "healthy" across the middle of the country too, but states "closest to the Mexican border" like AZ and TX grew just 6% (off a much larger bases). Notably, 61% of Mexican import on-prem volume sold in package vs just 39% draft for 52 wks. But draft is comin' on strong, gaining 0.9 share of Mexican imports on-prem.
Another way on-premise recovery has been slower goin' since the pandemic: avg alc bev sales "per venue," IRI showcased in its State of the Beverage Alcohol Industry presentation last mo. Avg alc bev sales per on-prem venue were down 3.7% to $374K in 2022 vs year ago. Not an all-encompassing measure, and still big variations show up by region as data still "normalizing" after Covid-19. CA avg $$ per venue rose 1% to $451K, southeast $$ were up 4% to $184K and outlets in NC, VA, MD, DC, DE, WV, KY, and TN collectively jumped 11% to $360K on avg. Yet northeast and New England states saw steepest drop in avg sales per venue, down 18% to $146K. South central region venues slid 15% to $368K on avg. Combo of PacNW and Rocky Mountain region states saw avg sales drop 11% to $297K per venue. Western central region venues dipped 7% to $287K. And eastern central states saw 6% dip to $116K on avg.
After finishing last yr at 1.3 mil cases, Happy Dad Hard Seltzer will essentially look to double in 2023, co-founder and ceo Sam Shahidi shared today in chat with INSIGHTS. Goal to hit "minimum" 2.5 mil cases is no doubt a lofty ambition amid seltzer segment's struggles, but Happy Dad has been bucking trends so far. It's now #9 malt/sugar-based hard seltzer in NielsenIQ scan data, up 164% for 52 wks thru Mar 25. And while brand slowed to +38% for latest 13 wks, it's still growing faster than any other top-10 malt-based seltzer. That's before new grape flavor shows up in scans, launched in Apr and created in partnership with Snoop Dogg's Death Row Records, on track to sell 400K cases this month alone, Sam said. Snoop is also a "top-5" investor in the brand after taking an undisclosed stake, tho Happy Dad is "profitable" and was within 6 mos of launch, Sam added. (Among Snoop's many biz interests, he's also a sponsor for Constellation's Corona brand, as AdAge points out.)
Texas grocery mainstay HEB, which had dipped its toe into c-store biz, intro'd first Fresh Bites banner that "will feature several refrigerated cases stocked with items, such as fresh produce, salads, sandwiches and sushi made daily, meat and cheese snacks, fresh juices, kombucha and Meal Simple options" such as Chicken Fettuccine Alfredo, San Antonio-based chain announced. Store in Leander will offer model to which existing 12 c-stores will be gradually cut over on undisclosed timeline, starting with one in Lytle.