Beer Marketer's Insights
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Control States Spirits Volume Down 2%, Dollars +1% in Feb; Normalized Growth After Strong Start
Spirits volume in control states fell in Feb following strong start to the yr. Volume dipped 1.9%, with $$ still up 1.1% for the month on +3% price mix, NABCA reported. Marks slowdown from Jan when volume grew 3.7% and $$ jumped 7.8%. So rolling 12-mo results largely back in line with FY 2022 results: vol -0.5%, dollars +2.3%. "This is the industry reverting to normalized levels of growth," wrote Consumer Edge's Brett Cooper.
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. But 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.
Top US wine & spirits distrib now has another federal agency poking around. The Federal Trade Commission is investigating Southern Glazer's Wine and Spirits for possible price discrimination and other potential "unfair, deceptive or anti-competitive business practices," Politico reported yesterday 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."
A deal INSIGHTS first wrote about 6 mos ago is now kaput, seemingly because AB did not approve. Back Country Bev, a subsidiary of Hand Family Cos, had deal to acquire 2 locations totaling 4 mil cases from Spriggs Dist in WV. Deal announced to employees Sep 27 (INSIGHTS reported it same day), but it reportedly met with some resistance from AB and now will not happen. Reasons not totally clear at press time. AB does not apparently have right to match-and-redirect in state. "We can confirm that the deal in West Virginia between Back Country Beverage and Spriggs Distributing is not moving forward," an AB spokesperson said. "We look forward to continuing to work with our wholesaler to ensure our retailers and consumers in West Virginia continue to enjoy the brands they love."
March a tuff mo for US beer biz, according to multiple sources. "Terrible," said one large AB distrib, "like a spigot turned off" in middle 2 weeks, before ending on a slightly better note. "Abysmal," said another large AB house. Tho softness not universal, we're finding it in many parts of US. For example, weather truly terrible in CA, leading to especially harsh mo out there, reportedly even for Constellation. Recall, St. Paddy's Day week very weak in natl IRI scan data too. What's going on? Many speculated that perhaps beer biz would return to more "normal" trends in 2023. But with BI reporting -3% as STR trend for 3 mos thru Feb following 3% drop in 2022, and now March turning negative too, gotta wonder if new "normal" might turn out to be down. Let's hope not.
Decisionmakers have been debating whether Chinese-owned TikTok should be banned as too great of a security risk. As Forbes assesses, such a move might whack small brands, for which the platform has been a great leveler vs established brands in a way that other platforms like Instagram are not. "Because TikTok's a discovery engine, it's giving power to these small brands to be able to get discovered if they have great products," said Eric Dahan, cofounder of LA-based creator marketing firm Open Influence.
Once Upon a Coconut has brought aboard the well-traveled new age exec Mark Ellis as its natl sales dir. Mark started his career at Coca-Cola and then spent 9 years on its acquired Vitaminwater and Smartwater brands before heading to early-stage side at Boxed Water Is Better, Bai Brands, Lucky Jack Coffee and Ounce Water, the effort from Sons of Anarchy star Theo Rossi that ran aground late last year after being unable to surmount supply chain snarls (BBI, Dec 27). He'll report to Ray Burbidge, coo and sales chief at canned brand.
WithCo ("with company," the way it's better to drink), the mixer/alc-alternative brand launched by Josh Ellis and Bradley Ryan, seems to have made impressive progress in its 3 years of existence, judging by details offered on WeFunder crowdfunding platform: over $6 mil in total sales, presence in NFL, MLB and NHL stadiums and entry into 1,700 Target stores this month. Line is rare entry that uses fresh juices, botanicals like lavender, rose, ginger root and bee pollen, and no preservatives, additives, concentrates or natural flavoring. It's packed in 16-oz bottles good for 10 drinks in 7 flavors including Bouquet, Honey Sour and Agave Margarita. (Old Fashioned is exception, good for 32 drinks per bottle.) Inevitably, an Espresso Martini recipe is on way. Among founders, Ellis serves as ceo while Ryan focuses on product development.
Reed's Inc reported accelerated growth in Q4 2022, with net sales rising 18% to $15 mil, and narrowed its operating loss as it strives to get to cash-neutral operating performance by 2H of this year. Operating loss narrowed to $2.8 mil from $4.4 mil a year earlier. The Q4 pop, driven to large extent by Reed's Really Real Ginger Ale and seasonal swing-lid entries, left full-year 2022 sales up 7% to $53 mil. "A year of progress," ceo Norm Snyder reported to shareholders yesterday afternoon as he outlined steps Conn-based co is taking to accelerate topline growth while cutting the cash burn to zero. With shares mired at $10 mil corporate valuation, or less than one-fifth trailing revenues, it's clear investors still need some convincin'. Yesterday, ceo said co is standing by its guidance that net sales will grow by double-digits this year, gross margin break 30% and cash flow to turn positive in 2d half of 2023.

