Beer Marketer's Insights
Following Friday's report of tuff industry trends in Mar, scan trends took a turn for the worse in 4-wk NielsenIQ data thru Mar 25. Volume declined 4.7% all outlet with $$ barely positive, +0.2%. Both down significantly vs yr-to-date (volume -3.5%, $$ +2.3%).
Happy Ending for HOBO and Mile One as They Form Maryland Distributing Partners, Buy 2 Distribs
HOBO will expand its holdings in MD, buying into another distrib deal somewhat in limbo since it was first announced in late 2022 and forming new partnership. Recall, HOBO is combo of Honickman, Bergson and Origlio families. And HOBO bought Bond in Baltimore, MD in late 2022. Mile One owner (Fader family, which mainly owns auto dealerships) announced it was buying Northeast Bevs and Buck Dist from Hammond Beverage Group on same date (Nov 17, 2022). But Mile One ran into roadblocks in getting its deal done, reportedly related to supplier approval, especially Constellation. Enter HOBO.
Top US wine & spirits distrib now has another federal agency poking around. The Federal Trade Commission is investigating Southern Glazer's Wine & Spirits for possible price discrimination and other potential "unfair, deceptive or anti-competitive business practices," Politico reported last week citing 3 unnamed sources. As part of probe, FTC seeks "detailed sales data on thousands of brands" sold by SGWS and others, asking "questions about pricing and benefits Southern Glazer's offers to retailers including quantity-based discounts, rebates, promotions, as well as marketing, warehousing, merchandising and other services," Politico wrote. Agency is also interested in "competitive dynamics" in wine & spirits retail, plus Southern's allocation patterns and "whether and how it limits distribution to certain customers."
New canned sports drink called Dink from pair of craft brewers in Philly metro has started off its existence harnessed to one of fastest-growing sports by signing on as exclusive bev of USA Pickleball. Among early events to feature new partner was inaugural 2023 Pickleball Slam yesterday that featured tennis aces John McEnroe and Michael Chang facing off vs Andre Agassi and Andy Roddick live on ESPN for $1 mil purse. (Agassi/Roddick won.) Founders are Joe and Abby Feerrar, who've operated Bald Birds Brewing for past 5 years, offering blend of water, juice and electrolytes with 2 g cane sugar that's denoted on-can as "the anytime drink." It's initially out in Lemon Lime, Orange and Pineapple packed in 12-oz sleek cans. Website so far doesn't list nutritionals . . . Congo Brands' fast-growing Prime Hydration brand has added LA Dodgers to its roster of sports sponsorships, serving as team's official sports drink.
Phocus brand, which was early to twin caffeine with focus-enhancing L-theanine but never has truly broken out, is getting shot of new energy and awareness with addition of rapper/actor Jack Harlow to investor and creator mix. The 25-year-old singer of What's Poppin, who like Phocus is based in Kentucky, on Fri posted on Instagram an image of revamped can now sporting his signature, as part of initiative that we hear also brings into the mix as a co-owner Joey Nickell, former Bang Energy exec who last year hung out his shingle as investor and advisor under names Spyte Holdings and Spyte Media (BBI, Nov 8). "The Remedy For Writer's Block," Harlow declared in IG post. We hear Harlow is adopting chief creative officer role at Phocus, not far ahead of scheduled May 19 opening of his latest film, White Men Can't Jump, that should net him - and Phocus - a burst of awareness just in time for summer selling season. From what we hear, relaunched brand initially will target Great Lakes states and Texas with retailers like Kroger, Circle K, Target and Vitamin Shoppe committed to picking it up.
Members of the public health community lamented the success of industry advocates this mo, as major alcohol policy proposals either failed or passed in far less impactful forms. That includes proposals for a major tax hike in Oregon and a Washington bill aiming to lower the legal blood alcohol limit for drivers from .08 to .05, neither of which passed before key legislative deadlines. At the same time, New Mexico became the most recent state to raise alcohol excise taxes, though by a much smaller amount than initially proposed. Other bills in HI, MA, NY, NC moved slowly or not at all.
Soylent said it's expanded presence in Meijer grocery chain in Midwest, moving 4-pks of its nutritional shakes into 219 locations and its single bottles into all 260 stores, following a successful test of single bottles in some stores. Brand claims now to be on shelves in over 30K stores, including Walmart, Target and HEB . . . Katrina Brewing said its Mexican Brew and Chelada non-alc beers have been picked up by HEB's Central Market natural banner in Texas . . . Cali Water canned cactus water is entering all Kings Food Markets and Balducci's in NJ and Mid-Atlantic region.
Among novelties on view at recent Expo West was Shroom Junkie brand that's dubbed "the world's first mushroom powered plantmilk." Launched by shroom-fermentation power MycoTechnology Inc in Aurora, Colo, the entry derives creamy texture by fermenting pea protein in roots (mycelia) of shiitake shrooms, offering robust 10 g of protein but just 5 g of sugar (140 calories) per cup. They're packed in resealable quart boxes and available via ecomm at $4.99 per carton. Formed in 2013 by ceo Alan Hahn, who'd earlier launched cos like Corvigo and SolarX, MycoTech has raised over $100 mil to date from likes of Wavemaker Partners, Seventure Partners, GreatPoint Ventures, S2G Ventures, Tao Capital Partners, Continental Grain and Tyson Ventures.
Italian Roaster Illycafe Rides Big US Lift to 14% Sales Gain in '22; Foodservice, Cafes Boom
With a big lift from US market, coffee roaster Illycaffe scored its biggest sales lift in a decade for full year 2022, +13.6% to €567.7 mil. Even while fighting inflationary headwinds, co increased its EBITDA 15.8% to €71.4 mil ($77.5 mil) "in keeping with its strategy of sustainable and profitable growth," per earnings release from privately held co, which releases only limited financial data. It was first year with outside ceo, Cristina Scocchia, who noted that "all markets and all distribution channels contributed to our growth, in terms of both revenue and EBITDA." With help from strong dollar to extent it didn't quantify, priority growth market US scored biggest gain, +27.4%, while core Italy market rose 9.9%. China grew by 15%, led by online sales. By channel, foodservice channel dubbed Horeca (hotels, restaurants, catering) continued to bounce back from pandemic, +30.9%, while its network of 190 stores in 34 countries enjoyed 42.8% lift. At-home market (CPG) brought 4.8% revenue gain as distribution network continued to expand, particularly in US. And online channel edged up 3.2% as Illy continued to consolidate its partnerships with ecomm platforms. Illycaffe, recall, has been considering an IPO in recent years.
REGS: Utah Requires Regulators to Block Labels of Crossover Brands 'Likely to Confuse' Consumers
Another state stepped up to plate in attempt to prevent consumer confusion over familiar non-alc brands entering alc bev space. Unlike Virginia bill addressing retailer merchandising, new Utah law goes straight after suppliers and labeling decisions. Signed by governor this mo, law requires state regulators to "reject a label or packaging" for a malt bev if it's "so similar to a label or packaging used on a well-known or widely available nonalcoholic beverage" that it's "likely to confuse or mislead" consumers into thinking it's the NA version. Regulators in Beehive State approve labels of malt bevs sold for off-premise consumption. And state's had provisions on the books for years now setting special standards for labels "likely to confuse or mislead" consumers into mistaking them for non-alc bevs, in heavily Mormon state where such issues take on outsize importance. This year's tweak goes further in requiring rejection of labels for first time. Brands with rejected labels aren't blocked from the market entirely. Instead, they are reclassified as "heavy beer," a designation typically reserved for malt bevs over 5% ABV. "Heavy beer," in turn, "is considered liquor," which means it can only be sold thru state-operated stores. So the new provision creates a mechanism by which regulators can deem the label for the hard version of a soft drink too close for comfort, diverting it from sales in grocery stores and putting it into state stores instead. Meanwhile, does the "likely to confuse" standard set by the statute open up another can of worms? Look out for how regulators apply it.