Beer Marketer's Insights
Constellation Still in Catbird's Seat; STRs Up 7.5% for 12 Mos; "Confident" in Growth
Constellation currently remains primary growth engine of beer biz, shrugging off its 5% shipments drop in Q4 ending Feb, since shipments up 7% and revs up 11% for full fiscal yr (exceeding guidance). Sales-to-retailers up 7.5% for 12 mos and up 6% in Q4, even with total industry depletions down 3% for 3 mos (Dec-Feb), according to Beer Inst data. In other words, it totally outperformed a very soft beer biz yet again.
Throwback Thursday
This week in 1983, Heilman chief Russ Cleary addressed challenge facing second-tier brewers as AB and Miller widened gap. "We strongly believe that continued consolidation among second-tier brewers will and must continue to take place," to counter "AB and Miller dominance," said Cleary. He added that "over-leveraged consolidations of weak, second tier brewers aren't in the best interests of the consumer," and "struggling brewers with underutilized capacity must be permitted to merge with companies having the financial and management capabilities necessary to compete with industry giants." Russ also believed AB and Miller's "continued attempts to dominate media advertising and sports events sponsorships and their competitive pricing tactics will accelerate the demise of the weak second tier brewers."
Fast-rise of Sazerac and its mini malt-based takes on popular Fireball brand puts it among a number of notable top vendor shifts in latest batch of scan data from Circana (formerly IRI). Sazerac doubled its $$ in key convenience channel yr-to-date thru Mar 26. Picked up 0.3 share to almost 0.6, becoming #13 beer/malt bev vendor in the channel by $$, ahead of FIFCO USA and just behind Yuengling. That's 3rd biggest share gain in c-stores behind Constellation (+14% and 1.5 share to 19.25) and Mark Anthony (+11% and 0.4 share to 6.7).
"Very Strong" Start to Fiscal Yr in TX and FL, CA "Challenged" Sez STZ, Confident in Outlook
What makes Constellation confident it will get 7-9% net sales beer growth in fiscal 2024? That was first question outta the gate on STZ earnings call this morn. "Very strong start to" fiscal yr in March in TX and FL, answered ceo Bill Newlands. Both states up "double digits," he added, while acknowledging that CA challenged, especially by weather last mo. But STZ got 9% increase in tap handles in CA in fiscal Q4 and 3.6% increase in effective distribution, Bill said, suggesting that co is "well-prepared when California gets back to a normal weather pattern." All in all, March "pretty much in line with expectations," Bill added.
After soft start in Jan, beer shipments improved significantly in Feb 2023 vs 2022. Domestic taxpaids popped 5%, 550K bbls in Feb 2023 vs yr ago, Beer Inst estimates. That puts domestic beer shipments up slightly, +0.2%, YTD thru Feb goin' against easy comps. Still nearly 10% lower than 2021 and 6% below 2019 levels thru first two mos.
As key brand that ushered in what was then called "new age" segment, Snapple holds incalculable importance in clearing path for bevs beyond CSDs. We've lost another person who played role in getting brand out to retail in its home market of metro NY, Marion Galluccio, who with her dad Mario operated Cott Passaic-Sussex Beverage Distributors in Paterson, in northern NJ just west of NYC. Tho details are scarce, brief tribute on TributeArchive.com indicates she had not moved far from her birthplace in Paterson, raised in Hawthorne and living in Englewood and Long Branch before moving to Edgewater, where she died at age 67.
"Don't be sweet!" commands Unsweet Organics, a canned line of "damn good unsweet tea" launched by a tech and toy-biz vet named Jarret Cuisinier. Operating as Fearless Brands, the Oakland-based entrepreneur has created a trio of 12-oz sleek-can entries that contain "no sugar, no stevia, no BS": Sungod (Black Tea with Lemon, Orange & Mint), Ohmmm (White Tea with Jasmine) and Flower Power (Green Tea with Rose & Hibiscus). They're claimed to be USDA-certified as organic (tho seal doesn't appear on front panel) and go out at $2.19-2.49. "Zero sugar, but spunkier," is how Jarret captured premise to us at booth, joining ranks of new players like Liquid Death, Weird Tea and The Bad Tea Co that are aiming to inject more attitude into massive category. Jarret was looking to "make tea like from a barista" when he embarked on effort, he told us. Unsweet has been going out mainly as DTC item for past year but Expo presence was intended to raise profile among retail buyers.
It's still just trickling into a handful of US outlets after Italy debut, but initial Stateside reviews for Howard Schultz's purportedly breakthru concept, the Oleato olive-oil-infused coffee, is getting mixed reviews amid complaints that it can cause stomach distress. Given scarcity of the 4 Oleato items so far, the evidence isn't robust one way or other, but Nation's Restaurant News plumbed "a few" Twitter posts and Reddit threads to report that "both Starbucks customers and fans are complaining that the unique combination of the olive oil and coffee or espresso is causing stomach pains." It cites subreddit for Starbucks baristas in which one green apron said "their team tried it and half ended up needing to use the bathroom, while another has called the drinks 'absolutely disgusting.'" In fairness, NRN noted, "a few other reviews on social media seem to praise the drink." Our own viewing of a few TV news anchors who've tried it on camera brought responses that generally were of the "hmm, interesting" variety rather than outright enthusiasm or distaste. Of course, paradigm-shifting bevs often need time for palates - and maybe stomachs - to adjust. Using Partanna extra virgin olive oil, Oleato is being offered at Reserve Roasteries in 4 alc and non-alc expressions (BBI, Feb 22). Schultz unveiled what he views as killer idea just before stepping down as ceo, leaving it to his successor, Laxman Narasimhan, to successfully commercialize.
Seeing its mildly caffeinated canned entry Sparkling Ice + Caffeine surge to over $100 mil at retail in just a few years, Talking Rain now is ready to head directly into the energy segment. But it's taking an unusually clinical approach, to our experience: launching a 16-oz Sparkling Ice Energy entry in Northern Calif while prepping a 12-oz sleek-can entry for test in heartland states next month. The test by Talking Rain's Ice Labs incubation unit will determine which - or maybe both - gets national rollout next year. Talking Rain, of course, has ridden its straightwall PET Ice brand to roughly $800 mil at retail but its ceo of past year, Ken Sylvia, has made it clear he's intent on stepping up innovation via's co's in-house Ice Labs incubation unit (BBI, Feb 28).

