Beer Marketer's Insights

Beer Marketer's Insights

It was over a yr ago that Fed judge struck down Tex law that banned direct shipping. Ruling was preliminary, yet most expected that was her final answer. But yesterday she granted state?s request for reconsideration and put case on hold ?til US Sup Ct decides whether to take the Ind case. Recall that US Ct of Appeals upheld Indiana?s right to ban direct shipping. Wha? happened? Accord-ing to WSWA genl counsel Craig Wolf, Tex judge looked over her shoulder at strong Appeals Ct decision, and decided to ?hedge her bets.? He also thinks she?s ready to reverse her earlier decision. Stay tuned.
Specialty brewers up 1.3 share to 11.6 in Oreg with 31,000-bbl, 12.7% gain in 2000. Shipped 278,000 bbls last yr; 1st double-digit gain in Oreg since 96. Meanwhile total Oreg mkt up just 1%, 14,000 bbls in 2000. Deschutes Brewery moved ahead of Widmer for top specialty spot. Up 6500 bbls, 13%. Widmer up 1300 bbls, 2.5%, its 1st gain since 96. Portland picked up 4500 bbls, 17%. Bridge-port up 16%. Add imports 6.5 share and hi-end got 18 share in 2000. As for the big boys, AB up 34,000 bbls, 4%, Coors up 15,000 bbls, 3% while Miller jumped 148,000 bbls, 39% with big boost from acquired brands.
?Imports are a key part of CDC?s strategy to gain category manager status with retailers,? wrote Morgan Stanley?s Andrew Conway after meeting with vp of Coors branch (Coors Dist Co) in Denver. ?Beer offerings in a customer location? are arranged ?in order of de-clining profit per case? to encourage consumers to trade up. In each location we visited, this meant placing high-price imports, not Coors brands, in the first position in the beer aisle?. By increasing retailer profit, CDC aims to gain preferential and/or incremental space for its products where possible.? Coors branches sell about 1.2 mil bbls, wrote Andrew, including about 200,000 bbls of imports.
AB will add its first major branch since group veep August IV added branches to his responsibilities. AB expects to close on purchase of its approx 6-mil-case San Diego dis-trib Coast as of Mar 30. While AB has 14 branches that sell about 5% of its volume, it will have 5 just in Calif that sell almost 2 mils bbls. San Diego Trib headlined: ?Major brewer swallows local beer distributor.? Pointed out that 1 of owners, Leon Parma, used to be part-owner of San Diego Padres.
Imports jumped an astounding 350,000 bbls, 29.7% in Jan. So even as total US beer biz has slowed down markedly in last several mos, import shipments still up big. Up 560,000 bbls, 16% Nov-Jan, while domestic taxpaids down 1.2 mil bbls, 3% same period. In Jan, Mexican shipments up 162,000 bbls, 42%, Dutch up 93,000 bbls, 29%, Canadian up 93,000 bbls, 45%.
7th biggest brewer in world can?t catch a break in US. After bein? buried for yrs in AB system, Carlsberg cut new deal with Labatt USA in 99. Didn?t help. Tho import biz rocked in 2000, ?sales of Carslberg remained unchanged,? it said, and ?must be characterized as unsatisfactory.? You bet: only 70,000 cases of Danish beer shipped to US in 2000.
Tuff to defend distrib in this one. State ct in Va upheld state ABC decision that okayed vintner Rosemount?s termination of Country Vintner distrib for not supplying northern Va grocery stores. Court found that tho major grocery chains were 68% of all retail wine outlets in northern Va and that Rosemount repeatedly (50 to 100x) asked Country to supply those stores, Country didn?t. That violated agreement that Country would use ?best efforts? to sell Rosemount brands in ?all on-premises/off-premises? outlets in ?an aggressive, effective and diligent manner.? In fact, Country supplied only 18 of 168 outlets in northern VA, court found
?One of the hottest beers? in NW specialty mkt Mac& Jack?s African Am-ber, got lengthy 3/18 profile in Seattle Times. Said it will sell about 24,000 bbls in 2001 and ?profit estimates of $100,000 are in the ballpark.? Took key account from Redhook, by pleading, ?we?re small, give us a chance,? said Times. Redhook CEO Paul Shipman acknowledged: ?That's a very powerful sell. I built my business that way.? Said M&J having ?their day in the sun. They?re in the charm phase? before you get a lot of media rec-ognition. . . Once the media descends,? warned Paul, ?the hop heads move on.?
Oak and 3 AB distribs terminated by Heineken under NY?s unique consolidation clause just asked judge for right to dismiss their state court lawsuit in Orange County, which sought to stop Heineken from terminating. Judge promptly granted. Distribs will refile lawsuit in West-chester. Now seek damages only. Recall that Orange County judge didn?t grant injunction, thereby allowing Heineken to go thru with termination. Heineken had been seeking to consolidate cases in Westchester.
AB turnin? corner towards profitability in China which has been a financial sinkhole for so many intl brewing giants. AB sold 1.2 mil bbls in China in 2000, up 25%, and it expects to be profitable there in 2001. Newsflash: AB exec veep Jack Purnell, longtime head of AB Intl (for 18 yrs, from its inception until 1998), will retire Mar 31st. Jack had also been a member of AB?s Strategy Committee (14-person group that runs the co) since 1976. His departure is 5th change in Strategy Committee in last 15 mos, tho no replacement at presstime. Jack stays on the Board of Directors of Grupo Modelo.