Beer Marketer's Insights
CA Hemp Ban Officially in Effect; Already Lawsuit Challenging; Hemp Sales "Back on" in MO
The New Jersey lawsuit follows delta-9 developments in a pair of states where governors also banned the products via executive action. In CA, Gov Gavin Newsom's emergency ban on hemp went into effect on Mon with approval from the Office of Administrative Law, and legal challenges the order are already rolling in (see below). Meanwhile, D-9 THC bev sales got the green light to continue in MO as Gov Mike Parson's ban on intoxicating hemp hit a wall after a legal challenge from state's hemp association, per the Missouri Independent.
That was quick. Less than 2 weeks ago NJ gov Phil Murphy signed into law a sweeping (albeit temporary) ban on D-9 bevs and many other intoxicating hemp products, including immediate removal of product from shelves. Yesterday, a half dozen hemp cos from NJ and around US sued NJ AG, head of NJ Cannabis Regulatory Commission and NJ Secy of Agriculture in hard-hitting lawsuit in US Dist Ct of NJ, "challenging the validity and enforceability" of the act. This shot across bow seems a prelude to other legal battles coming in other states that ban intoxicating hemp products and will be closely scrutinized as it plays out, especially in absence of any federal action. Lawsuits already filed in CA and already caused revisions in MO law (see below).
2025 Cost Outlook Looks "Normal," Sez ABI CFO; US Outlook Not "Particularly Exciting," Sez Bernstein
Don't jinx it! But 2025 is setting up to be perhaps our most "normal" year since pre-Covid on a number of fronts, including cost outlook, ABI cfo Fernando Tennenbaum shared during Bernstein's Strategic Decisions Conference. In Fernando's view, "the 2025 cost outlook appears to be closer to what would be a normal year after a few years of strong volatility," wrote Bernstein's Trevor Stirling in report this morn. ABI "did not increase prices as much as some consumer companies" since 2019, "leading to margin compression." But that "now translates in a healthy consumer environment volume-wise," added Trevor. There's cost "upside" on grain, aluminum is "broadly neutral" and "a bit" negative on currency foreign exchange rates. Fernando and ABI are still heavily focused on delevering. So M&A strategy "focus remains on bolt-ons," noted Bernstein.
BPI Fell Further, Down to 31 in Sep with Imports Barely Above 50, No Other Segment Over 40
Distrib beer orders slowed even more this mo, NBWA's Beer Purchasers' Index shows. After 5-mo positive streak ended in Aug, when total beer category index dropped to 40, the BPI for Sep fell to 31. That's way below the break-even reading of 50 and deep in volume contraction mode. Combined with an at-risk inventory reading just below 50, the index again "reflects a more cautious outlook among distributors," NBWA wrote.
Alcohol can be linked to an estimated 5% of cancer diagnoses among adults over the age 30 in 2019. That's somewhere around 1 in every 8 cases viewed as preventable, or those tied to modifiable risk factors. But those links are less well known as similar relationships between cancer and other risk factors, according to a report published this week by the American Association for Cancer Research (AACR). Alcohol is far from the focus of the annual progress report, which devotes significantly more space to the "remarkable progress" and "significant strides" in understanding and detecting cancer, reducing deaths and both extending and improving survivors' lives. Nonetheless, alcohol has been a key focus of media coverage of the report, especially by the NY Times.
Another Atlanta brewer is shutting down. After months of speculation, Elsewhere Brewing will close both its locations on Oct 27 and is putting its business up for sale, Rough Draft Atlanta reports. The closures come after 4 yrs in Grant Park and just over a yr at its Westside Paper location.
Portland, OR's Zoiglhaus Upping Capacity from 5K to 30K Bbls as it Leans into Contract Brewing
Against a difficult beer industry backdrop, Zoiglhaus Brewing became "a quiet success story" in the Pac Northwest, New School Beer highlighted in a recent profile. The Portland, Oregon-based brewer established itself as one of the "most attractive" contract brewing operations in town. And co's reportedly upping its potential output from 5K bbls annually to 30K bbls, upgrading from an existing 3-vessel and 10-bbl brewhouse to a 35-bbl brewhouse with 3 additional 60-bbl tanks.
Left Hand Brewing recently hit its first crowdfunding goal, filed Form C with the SEC and moved from its "Testing the Waters" phase to "direct investing," co announced last week. Yet level of investment appears to have slowed considerably since, and co still remains below its stated goal to raise $2.735 mil total, including $1.2 mil from The Crowdfunder Group SPV and another $1.5 mil from "other new investors" (see Aug 28 issue). Co raised $610K from 289 investors at presstime, per Wefunder.
AZ's Mother Road Brewing Raised Nearly $700K in Crowdfunding as it Seeks to Become Total Bev Co
Yet another brewer is looking to branch out to other beverages. Tho this time it's a consistent regional craft growth co. Flagstaff, Arizona-based Mother Road Brewing launched a crowdfunding campaign via StartEngine in June as it looks to embark on a new growth phase, the Phoenix Biz Jnl reports.
Exporter of former Craft Brew Alliance brands, CraftCanTravel (CCT) and the wholly-owned AB subsidiary agreed to mediate their dispute this mo after CCT amended its complaint in fed ct for the second time. The co didn't successfully win a preliminary injunction and its latest filing noticeably pares back its claims. It no longer makes direct claims against CBA's acquirer AB nor the more recent acquirer of some former CBA brands Tilray. And it lists just a single count, breach of contract, against CBA, the only party with which it contracted. So now the suit is on hold until the scheduled mediation at the end of Oct.