Tamarron Consulting's annual Wholesaler Survey of 587 distribs that sell 40% of US beer vol rated suppliers' performance on a 1-4 scale in 9 areas, like mktg mgmt, leadership/planning, portfolio mgmt, and more. Bottom line on this yr's survey: suppliers have improved in some areas that distribs deemed important, but most have still got a long way to go overall. Of 9 competencies, suppliers only met or exceeded distribs' expectations in 1: portfolio mgmt (3rd most important area, according to distribs). In #1-rated competency, mktg mgmt, almost all suppliers scored lower than just about any other area, although performance in this area improved over last yr. Other low-scoring areas for most suppliers according to distribs: communication, retail relationships, and technology. Low ratings across many categories add up: just 3 of 11 suppliers – top-3 domestic brewers - "met or exceeded" wholesaler expectations with overall score of 3 or more. Last yr, just 2 brewers made the grade. No importer performed to distribs' expectations overall, but 5 of 6 importers scored better than in last yr's survey. Though large domestic suppliers generally got highest ratings, gotta note: among group including 4 large domestic brewers and 1 specialty brewer, just 1 managed to improve overall score. Interestingly, that brewer's biz results have been less than stellar in last yr.

Tex no longer industry growth engine. Total Tex shipments up just 24,000 bbls, 0.3% yr-to-date, following flat 2000. And that’s including 200,000-bbl gain in Jun as AB piled in 168,000-bbl, 21% gain (AB shipments up 275,000 bbls nationwide in 2d qtr). For 6 mos, AB up 199,000 bbls, 4% in Tex for 6 mos; climbed to 51.2 share. Almost half of AB total is Bud Light. Bud Light now 1 in 4 beers in Tex and up another 2 share. Gained 196,000 bbls, 9% for 6 mos, including Jun surge, but Bud dropped 77,000 bbls, 7%. Bud’s Tex share down to 11.2. 2d biggest gainer in Tex: Smirnoff Ice. Came out of nowhere to ship 97,000 bbls (1.4 mil cases), fully 1 share of flat Tex mkt. That’s 18,000 bbls more than Heineken USA. Other brewers took a hit. Total Miller biz down 205,000 bbls, 9% for 6 mos as Miller Lite dropped 132,000 bbls, 9.5% YTD. Lite share fell 1.5 to 13.5. And Coors shipments off 0.6%, but Coors Light down 1.8%. Still, Coors Light only 1 share behind Bud so far in 2001. Top 3 light brands almost half (48.4 share) of Tex mkt. Top 5 brands, including Busch, at 2/3 of Tex biz. Pabst off 53,000 bbls, 13%, and down to 3.6 share. Gambrinus jumped 24,000 bbls, 15% for 6 mos; climbed over 2 share.

Now here’s a switch. While a number of distribs who served as chairman of AB’s wholesale panel have acquired additional territory, one recent panel chairman, Robert McCullough of Eagle Bud Dist Co in Opelika, sold his 2-mil-case biz just before Jul 4th holiday to another Ala distrib, Adams Bev Co of Dothan. (Adams bid for Maris back in 96.) Several other AB distrib deals closed during peak-selling season. In neighboring Miss, Southern Bev Co bought Anderson Bev Co, about 1/2 mil cases. Interesting deal in Neb too: Bruce V. Nelsen, until recently #2 guy at AB’s Tulsa branch just bought Standard Dist, an almost 1-mil-case distrib near Omaha. And a tiny Pennsy AB distrib, T.A. Zullinger Inc, also sold this summer. There’s a lot going on in Pennsy these days.

Yep, you read that right!!! Central Dist got $15 per case equiv, about 5X gross profit for this small amount of cases paid for by 3 Miller distribs. Chi Bev Systems, owned by Reyes family, gets most of it, Town & Country and Burke Bevs get rest. The deal and $15 price had first been negotiated as Coors tried to buy volume from Central, but Coors assigned rights to Chicago Bevs. Ultimately, Miller distribs bought. Coors in Miller network for most of metro Chi. Coors has about 3 share in Chi. Interestingly, Central is same co that got over $20 per case for Kirin in arbitration case back in 98 (remember that?). Central, a 3-mil mainly-import and Pabst distrib also faces other changes this deal may affect. Got termination notice from Miller on brands that Miller acquired in Pabst deal (as have other non-Miller distribs in Chi area). Under Illinois law, supplier that is less than 20% of distrib’s volume can terminate without cause, but if parties don’t agree on value, which you can bet they won’t, they go to arbitration or to court. Central rejected arbitration; sought jury trial. Miller doesn’t want jury trial. For Central, those Miller acquired brands are about the same % of its biz, same % of gross margin as the Coors volume that went to Miller distribs. Be interesting to see if they fetch a similar price.

Importers' share of voice (ad $$) continued to climb as total beer spending on major brands up at nearly double-digit pace in 1st qtr. Total spending by major import/specialty players jumped $9 mil, nearly 50% to $28 mil. That was over 15% of spending on major brands, compared to just 11% last yr. (Data in chart below, compiled by Competitive Media Reporting on spending in 11 media, includes all brands and corporate public service ads. Some sources say these figures low.) AB spent $90 mil on major brands in 1st qtr, up just 0.4%. That’s still almost 50 share of ad $$ on major brands. But AB made major shift in allocation of ad $$: spending on Bud dropped $13.5 mil, 26%, while spending on Bud Light up $10 mil, 39%. Last yr, Bud ad $$ 2x as big as Bud Light in 1st qtr; this yr virtually even. AB also jumped spending on Michelob family by $3.6 mil, 36%. Miller jumped spending on each of its major brand families substantially. High Life spending more than tripled, up $3.7 mil. Lite spending up $3.9 mil, 14%, but still $7 mil below 1st qtr 97. Coors typically doesn’t spend much in 1st qtr. It cut spending $2.7 mil, 18% in 1st qtr. Spent about same in toto as Miller did on Gen Draft brand. And Smirnoff Ice got same support as Coors Light: $7.8 mil. Big spending boost for Heineken brands too: up $5.3 mil, 48%. Interestingly, other import/specialty players each cut way back in 1st qtr. Boston spent zilch, Corona spending off 2/3 and Labatt spending down by more than 25%.

As next round of Maris-AB battle begins, each appealed verdict awarding $50 mil to Maris Dist. Maris seeks additional $89.7 mil awarded by jury but which judge tossed. He had reduced award, saying verdict "inconsistent" with Fla law, when he saw handwritten notation on verdict form that broke down $50 mil for value of biz and $89.7 mil damages for lost sales. That written breakdown "should not have been considered by the Court," Maris argued. Even if judge felt $139.7 mil verdict too high or inconsistent with law, the remedy would have been to give the jury the chance to correct problem through further deliberations," Maris added. Reducing award was "based solely on speculation," Maris argued, adding that $89.7 mil award was "within reasonable range supported by the evidence." At one point judge threw atty Willie Gary off case for improper conduct during closing arguments. "You are to have no more role in this case under any circumstances," judge told Willie. Willie also faces contempt charges brought against him during trial. At presstime, spokesman sez Willie's still on the case.

AB filed huge 120-pg appeal. Seeks at best a directed verdict and/or a dismissal; at "a minimum" a new trial. AB claims it proved Maris broke contract. Tactics of Maris’ attys during trial a key part of its appeal. Maris atty actions, AB claims, were "highly prejudicial" to jury, sez AB, pointing to a "staggering record of misconduct by the plaintiff" attys. They were cited for contempt 5 times and "ejected from the courtroom 3 times" for ignoring judge’s instructions. Fines imposed on Maris attys "do nothing," AB argues, "to alleviate the prejudice" to AB. "The misconduct in this case is far worse in terms of severity, frequency and sheer variety" than other cases where there was mistrial, vented AB. So much misconduct "leads to the inescapable conclusion that this conduct was an intentional effort to affect the jury’s deliberations," according to AB. In support of dismissal motion AB also filed a supplemental memorandum under seal, which undoubtedly includes fascinating behind-the-scenes fireworks. AB faults judge too. Claimed judge erred when he put Rudy on stand when Maris attys didn’t seek his testimony. "Under the law, there was no reason" to call Rudy and allow him to float $300 mil valuation to jury. That "only compounded the prejudice." Judge allowed "prejudicial, irrelevant" testimony that harmed AB, AB claims, as Maris side questioned "virtually every AB witness about the Jacksonville termination" tho they were not supposed to bring up that suit. AB also complained that Maris side was allowed to present testimony based on RICO claim against AB that had been dismissed. Jury instructions worked against AB too, AB claims. Key instruction said Maris should not be held responsible for actions of employees working in their own best interest. But AB cited case law to show that Maris should be held "responsible for the admitted actions of its employees" such as repackaging old beer, that it is not necessary to show Maris principals knew about repackaging to prove breach of contract. Judge erred too when he didn't allow testimony of distribs who had corrected deficiencies after being subjected to MET crew, AB sez. Also wrongly barred testimony as to how low Maris expenses were compared to other AB distribs.

Bill Weintraub, respected as one of principal architects of Coors late 90s revival will leave at yr end to become prof at Univ of Colorado. Spent 8 yrs at helm of Coors mktg. On his watch Coors Light grew 3.3 mil bbls between 1995-2000. But it has stalled in 2001. Bill’s 3-hour-long mktg presentations were usually one of highlights of big brewers’ national sales conferences. Coors prexy Leo Kiely called Bill a "consummate marketing pro" in Rocky Mountain News article about this change. And yet Bill and his team faced more criticism in last 2 yrs as more distribs felt Coors Light ads didn’t continue to connect with young adults. Replacing Bill is Ron Askew who is ceo of Integer Group, a $600 mil co he built from scratch, which provides mktg services to Coors. He and Coors prexy Leo Kiely go way back. He will come in during tuffer time for Coors: retail sales trend went from +5 in 2000 to –1 in 2001. Stock price slipped from high of 80 last Nov to current 47-48. And for various reasons, several on sr exec team have left or announced departure. Bill will be 3d sr veep to leave this yr, following operations honcho L. Don Brown and top legal exec Caroline Turner.

AB’s fall price hike is relatively modest tho it is going up in a number of larger states. In Fla, AB suggested just a 15-cent per case increase to retail on premium brands, 30 cents on subpremiums as it moves to close gap further between Bud and Busch/Natural families. For 2 yrs in a row, AB has taken bigger increases on subpremiums in key Mich and Fla mkts (those 2 states were 11% of AB volume in 2000). In Oh, AB going up only on suitcases (which is big % of biz there) with suggested increases to retailer of 40 cents on premiums and subpremiums. No draft hikes. In each of those 3 big states (15% of AB volume), AB fall price increase less than last yr. In Ala, AB taking 21-cent hike, with suggested 30 cents to retailers on premium and subpremium. And in Tenn, AB suggested 35-cent increase to retailers. But in Ga, 1 of AB's top 10 states which normally gets increase in fall, no price hike this yr. AB is taking some packages up in Calif Oct 1 (see last issue), but holding til Feb on biggest-selling packages. Prices had gone up there in Feb 2000. Several other states where AB prices going up: Ia, Kans, Oreg, Neb. Three-dollar draft increases in Ia and Kans. Tho not all details in, seems like AB going up on slightly smaller % of its volume and going up a little less than last yr.

Imports up a whopping 2.7 mil bbls, 14.7% for 12 mos thru Jun 2001. For 6 mos, imports up 1.3 mil bbls, 13%, including a 9% gain in Jun. Recall that imports up 16% in 2d half 2000. Means that for 12 mos total US biz up about 0.6%, including huge import gain and 1% domestic drop. Most of import growth from Mexico again. Mexican shipments up 900,000 bbls, 23% in 1st half. That's well ahead of depletions trend, so Mexican shipments should slow in 2d half. That's key because Mexican shipments 42 share of imports. Dutch shipments up 300,000 bbls, 12%, and 24.8 share. So over 2/3 of imports from 2 countries. Canadian shipments up more than ever, up 335,000 bbls, 21% YTD, because some Smirnoff Ice and other Guinness Bass Import Co products made up there. For same reason, Irish shipments takin’ it on chin. Down 273,000 bbls, 51%. UK shipments just even. And German shipments off 12,000 bbls, 2%. Those 6 countries got 90+ share of imports. But some small countries with important brands for big brewers growing rapidly. Belgian shipments up 27,000 bbls, 117%, led by Interbrew’s Stella Artois. And Czech Republic shipments, led by SAB’s Pilsner Urquell, up 15,000 bbls, 39%. Interestingly, imports slowed to 6% growth yr-to-date thru Aug 5 in supers, according to IRI (not including malternatives). Among top import brands, Corona and Heineken each up 8% YTD, while Tecate up 1% and Labatt Blue up 6%. Leading import charge lately: imported light beers. Corona Light, Amstel Light and Labatt Blue Light each up 20%+ yr-to-date in supers.

A 3% drop in middle of peak-selling season ain’t the way ahead. OUCH!! Jul domestic taxpaid shipments down 550,000, 3.4%, estimates Matt Hein of Beer Institute. Domestic taxpaids down 1 mil bbls, 1% YTD. So it sure ain’t a good yr for US brewers so far. Will be tuff to pick up all that slack, even tho there was 1.35-mil-bbl drop in 4th qtr last yr. Here’s why: Aug 2000 was big mo, up 700,000 bbls. Very similar 12-mo trend too: taxpaids down 1.6 mil bbls, 0.9% for 12 mos. That includes Beer Inst estimate for most of malternative volume brewed in US (some Smirnoff Ice made in Canada). Look too at soft sales-to-retail trends thru Jun: AB up 0.6%, Miller down 4.4% and Coors down 1.2%. Shipment numbers for top brewers in 1st half were better than that, so challenging 3d qtr was expected, especially for Coors. But Jul drop worse than expected.