Beer Marketer's Insights
Gunning for $60 mil in retail sales this year, Atlanta-based Lemon Perfect Hydrating Lemon Water brand is exploring a larger-size package in pair of convenience stores while evaluating whether it needs to make a formulation change to ease erythritol out after damaging recent study on natural sweetener. Otherwise, it's continuing methodical buildout, keying in on handful of key regions and so far eschewing expensive field marketing and other branding efforts in favor of in-store velocity-generating activities. Among its latest retail conquests: it's entering enhanced water sets at 499 Target stores in NY, Georgia, Texas, Calif and Wash/Ore.
Aluminum Tariff Costs Near $1.9 Bil Over 5 Yrs, BI Sez; Costs Up in 2022, Tho Usage Slowed
Section 232 tariffs have now cost the US bev biz $1.893 bil in the 5 yrs since being levied in late Mar 2018, Beer Inst reported on Friday based on analysis by HARBOR Aluminum. Tariffs cost over $209 per metric ton on the over 9 mil metric tons of aluminum used by bev makers in that time. That's an increase of around 5% over the average cost in the 1st 4 yrs, suggesting a sharper 20+% increase in tariff costs per metric ton between Apr '22 and Apr '23. That said, bev biz aluminum usage slowed over last 6 mos from avg of near 184K metric tons/mo to under 140K metric tons/mo, this analysis suggests.
Top execs at MC once again made a pretty penny in 2022, per co's recently filed proxy report. Base salary for ceo Gavin Hattersley rose 4.3% to $1.2 mil last yr. But name of the game is long-term incentives and stock options, which bumped his total compensation up to $9.07 mil. Much of that likely won't vest for some time. Tho Gavin's total pay pkg jumped 10% from $8.23 mil in 2021, up 31% vs 2020.
Shortly after Heineken USA told distribs it'd eliminate select "non-core SKUs" to streamline supply, co's cutting all draft product distribution to VT, WY, MT, ND and SD for the next 12 months as first reported in Brewbound. "Core brands in packaged formats at these locations will not be impacted," a company spokesperson shared with INSIGHTS, and draft cuts don't apply to Lagunitas. Yet even tho it impacts only "a small subset of partners" across 5 low population states, cuts signal persistent supply chain challenges amid hi-profile rollout of Heineken Silver. Still no word on exactly which off-prem SKUs were eliminated. Stay tuned.
Tilray alc bev sales slowed dramatically in Q3, despite all-incremental revs from Montauk. Up just $1 mil, 5% to $20.6 mil for qtr, compared to 56% in preceding qtr, which was first qtr after it bought Montauk. For 9 mos, co's alc bevs still up $14 mil, 28% to $62.7 mil. That's about 14% of Tilray's total revs, mainly in tuff cannabis biz. But alc bevs previously more of growth engine. No comment in release or on conference call on why it slowed in latest qtr.
At $29.58, average off-premise price for a case of beer, FMB or cider is now $5 more than average price for a domestic premium, $24.48, yr-to-date to 3/26 in Circana (IRI) multi-outlet + convenience scans. But notably, premium and even sub-premium prices are up even more than superpremium prices. And not just in terms of %. Premiums up $1.42, just 2 pennies more than $1.40 increase for average sub-premium case YTD to $19.25. Typical price in superpremium segment up just $1.34 to $30.65. Trend even more pronounced in grocery channel where superpremium prices up just 87 cents compared to premium +$1.26 and sub-premium +$1.23.
Solid End of March Keeps Beer $$ Up Slightly in 4-Wk Scans; Modelo Fam Nears 10 Share; FMB Gains
Beer category $$ closed March on solid footing, up 2.1% for 1 wk thru Apr 2 in Circana (formerly IRI) multi-outlet + convenience data. Edged out wine, which ticked up 1.9%. Volume for both categories off similar 3%, while spirits cases up much stronger 5.7%. But spirits got next to no pricing, $$ +5.9% in this data. So for 4 wks, beer $$ up 0.8%, wine barely better than flat and spirits up 5.2%. For last wk of March, trends improved across alc bev biz, including for most top-50 beer brand fams.
Gov Lujan Grisham Vetoed NM Excise Tax Hike
New Mexico's tax rates on alcohol may not rise after all. Governor Michelle Lujan Grisham included the 20% hike to alcohol excise taxes among numerous line-item vetoes on wide-ranging tax bill passed by legislators the week prior, the Santa Fe New Mexican reported. Negotiations between legislators whittled down an initial proposal to jack up rates to "25 cents per drink." Introduced at the behest of public health advocates, that bill would have instituted increases of 3.5-6.5x, depending on the beverage type, with even sharper increases for small suppliers that currently benefit from exemptions.
Final federal tallies of 2021 traffic fatalities confirmed sharp increases for a second straight year. Both the absolute number of traffic deaths and the rate per miles traveled increased during the first full year of the Covid-19 pandemic, the Natl Highway Traffic Safety Administration reported last wk. The number of fatalities tied to alcohol-impaired driving spiked 14% in 2021, faster than the 10% overall rise. Notably, however, the pace of increase slowed in the 2nd half of the year. Through the first 9 months of 2022, overall traffic fatalities decreased 0.2%, NHTSA reported early in 2023. Ref 1
Last month, Topo Chico booth staffers at Int'l Restaurant Show & Coffee Fest in NY informed us with enthusiasm that Coke-owned Mexican mineral water was about to launch mixer line in 6.5-oz glass bottles (BBI, Mar 7). Launch made a lot of sense, since Topo Chico has long been used as a mixer in key markets like Texas, and Coke has been riding that identity with array of alcoholic items launched in partnership with Molson Coors. Tho we didn't see it, an announcement seems to have duly gone out heralding debut on Apr 24 at Walmart, Kroger and Publix, judging by story in VinePair. "Topo Chico Mixers are an elevated non-alcoholic mixer with premium ingredients, a light essence of flavors, crisp bubbles, filtered sparkling water and added minerals for taste," as VinePair quoted release. "The crisp bubbles lock in complexities of the unique flavors, amplifying the taste of the alcohol or alcohol alternatives, while curated herbal notes are a nod to Topo Chico's heritage for a delicate and authentic taste."