Beer Marketer's Insights

Beer Marketer's Insights

Few regional growth cos have shot up as fast as Anaheim, CA-based Brewery X. But as the budding brewer plants roots in a seaside San Diego taproom, it's got far bigger growth goals on the horizon. The company is "on the way to producing 40,000 barrels of beer and seltzer this year, up from 30,000 in 2023," the Orange County Biz Journal reports. And tho it's a long road ahead, co's "long-term goal is 100,000 barrels per year."

Sierra Nevada turned on the jets in Sep scans as Sierra brand family $$ sales popped 8% with volume up nearly 5% for 4 wks thru Sep 28 in NIQ off-prem channels. That's fastest trend among top 12 beer suppliers in NIQ and biggest gain among all craft brewers for the period. Indeed, Sierra Nevada snagged 0.6 share of craft $$ for 4 wks, handily outpacing the craft segment (-2%). Thru nearly 9 mos, Sierra $$ grew 4.4% with volume up 0.8% in these channels. Constellation and Kirin-Lion are the only other top 12 cos growing volume in scans YTD.

This year marks our 30th annual Beer Insights Seminar! Join us for another year of top-notch content and unparalleled networking in New York City, including an opening reception on Sunday evening, Nov 17, and an all-day program on Monday, Nov 18. This year's seminar will take place at the Harmonie Club, one of NYC's most storied private clubs founded in 1852. Our program includes industry leaders across segments and tiers such as: Kyle Norrington, US cco of Anheuser Busch; Jake Wenz, prexy & ceo of Sazerac Company; Jim Sabia, exec veep and beer division prexy, Constellation Brands; Craig Purser, prexy of NBWA; Clement Pappas, ceo of Surfside Iced Tea; Shaun Belongie, ceo of New Belgium Brewing; and our own Benj Steinman, prexy of BMI. We'll also feature a Wall St panel with Robert Ottenstein, senior managing director at Evercore ISI, Carlos Laboy, managing director at HSBC, and Bonnie Herzog, managing director for Goldman Sachs. And we'll have a topical delta-9 beverage panel featuring Breck Speed, co-CEO of Emergent Beverages, and Diana Eberlein, chair of the Cannabis Beverage Association and veep at SoRSE Technology. Sign up now!

Summing up current lack of consensus on hemp-derived cannabinoids like Delta-8, 9 and 10, "ask 10 state regulators about these products and you'll get 11 answers," NBWA prexy/ceo Craig Purser quipped at org's convention last week. He cited a "wide variety of opinions among our members," too. But it ain't just regulators and beer distribs with different views of the best way forward. Hard to find agreement among groups of attys, legislators, advocates and industry members, even among makers of hemp-based products. Begs the question: what will create consensus? The threat of prohibition? Settlement of a lawsuit designed to resist regulatory overreach? New research or some catalyzing calamity? How about negotiations over distrib agreements as fledgling suppliers seek to expand their reach with experienced operators?

This yr's NBWA annual convention featured several newer beats amid the backdrop of familiar category health concerns for beer and further perceived oppys beyond beer. Indeed, beer distribs continue to try to walk and chew gum as they aim to fix their beer biz while also betting on everything else, everywhere else. Meeting hosted nearly 1,800 folks over 3 days, increasing attendance vs 1,700+ folks at 2022 convention in Chicago as industry broadens its tent. (At the larger convention site in Vegas, NBWA hit 2,600+ attendees in 2023, building back toward pre-Covid levels.)

AB volume declined 6.7% yr-to-date thru Sep 28 in NIQ off-prem channels. Off-prem scans are tracking closely with all-channel depletions trends this yr, INSIGHTS understands. Down ~6.5 would be an improvement from first half, when total AB depletions slipped 8.6%. Recall, Q2 depletions were much improved, but still down 4%. So it's unclear how much better AB's Q3 trend got compared to Q2. AB down just 2% for 4 weeks thru Sep 28 in NIQ data, down 3% for 12 weeks thru Sep 8 in Circana data. AB still showing some signs of improvement, tho down considerably over 2-yr period. An approx 6.5% all-channel drop for almost 9 mos in 2024 follows an 11.9% STR drop in 2023 vs 2022. So AB lost ~18% of its volume in the last 21 mos. No wonder so many AB distribs more intensively seek out alternatives, especially D-9, NA and spirits brands. Some are even selling non-bev products. Ironically, AB portfolio perhaps now in better position to grow than any time in recent yrs, according to Evercore ISI's Robert Ottenstein and other industry observers. But industry remains tuff as total beer industry sales-to-retailers down 3.8% thru Aug.

If Constellation's beer sales slow for any reason, its short-term results are examined under a microscope, doubts are raised, and its stock comes under pressure, tho most financial analysts remain steadfast. All that happened (again) after latest quarter Jun-Aug reported, but a couple of analysts removed their "buy" ratings. At presstime, STZ stock is 5% lower than where it opened Oct 3 after results and below where it was at the end of 2021. Down 2-3% again on Oct 7 when Bank of America downgraded STZ to "neutral." B of A analyst Bryan Spillane lamented that "at 15% volume share the law of large numbers is in effect with a category that is tired." He expected stock to remain range bound "for a while." Next day, TD Cowen's Robert Moskow also lowered rating to "hold" from "buy." Despite its "consistent" mid-single digit growth rate, STZ's valuation "pegged… in the high teens rather than the low 20s that similar CPG companies fetch," TD Cowen wrote. "We attribute the valuation gap to skepticism about the company's capital allocation decisions and the view that it will at some point, revise down its outlook for beer."

Reporting its fiscal quarter ended Jun 30, Prenetics Global early-stage health sciences co reported that it's ready to roll with IM8 health & wellness brand, which will employ newly acquired Europa Sports distribution arm as key route to retail. In earnings announcement, Hong Kong-based co with base in Charlotte said that "all marketing and operational plans in place" for launch later this month, tho it offered no details and omitted name of its partner in venture, soccer icon David Beckham, who came in as investor this past summer.

At last year's NACS, Celsius inaugurated a new 16-oz line dubbed Essentials to enhance its prospects for winning over performance-energy users (BBI, Oct 4 2023). Apparently, it's succeeded, because at this year's edition of c-store expo it's adding a couple of flavor extensions: Watermelon Ice and Grape Slush, bringing lineup to 8 flavors now. The line incorporates performance blend called MetaPlus plus aminos to support physical and cognitive performance. The new entries break early next year . . . F'real, Rich Products' brand of do-it-yourself smoothies sold in foodservice channel, is finding it can't resist the allure of offering energizing extension. Debuting at NACS this week, Energy Freeze offers moderate 100 mg of caffeine from green coffee extract over its blends' usual coconut water base. They're debuting in Blue Raspberry and Strawberry Watermelon flavors, augmenting core lineup of 7 seven milkshakes, 3 whole-fruit smoothies and various LTOs. Priced at $3.50 per 12-oz serving, they're entering roster of F'real accounts like Maverik, Kwik Trip, Circle K and Yesway c-store chains, as well as key college campus channel.

As Liquid Death works to cut burn rate and refine its sales & marketing approach, it's recruited longtime DSD vet Michael Fine to serve as chief retail officer. "After years of admiring from afar, I'm thrilled to share that I've joined Liquid Death as chief retail officer," he posted on LinkedIn today announcing his move. "Liquid Death breathes rare air into the beverage game — as very few have accomplished what they have built in terms of growth and speed. All by bringing fun, entertainment and thought leadership into this industry." His move comes after LA-based marketer of canned waters and teas undertook significant cutback to sales force last week (BBI, Oct 3). Fine's bev experiences go back to early Pepsi run followed by several years at Lance Collins' side at Fuze/NOS, as well as extended runs at Nestle Waters N America and Body Armor, another Collins venture. He just left Collins' A Shoc Accelerator energy brand after that entry was dropped from Keurig Dr Pepper DSD system, as we reported last month (BBI, Sep 11). Collins hasn't responded to our request seeking to know how he's moving forward on brand now.