Beer Marketer's Insights

Beer Marketer's Insights

For 2nd yr in a row, US alc bev biz remains sluggish, with estimated sales to retailers (STRs, depletions) declining most of the way thru 2023 and tracked off-premise sales volumes also down. Total beer, wine and spirits depletions declined 2.9% in Aug, per note from Jefferies analysts, about the same as 2.8% decline for 8 mos. Recall, Beer Inst estimates beer STRs down 2.7% thru Aug, org shared during annual mtg last wk.

Is Essentia alkaline water finally getting into the flavor game? Booth staffers at Nestle-owned brand were sampling some new liquid under the table to buyers but remained hush-hush to journalists and other riffraff. But rear wall of booth may offer confirmation. Recall, until now, Essentia has been seen only in black & red trade dress. Given ionization process that yields brand's high alkalinity, extending into flavored or sparkling versions hasn't been the slamdunk it can be for other premium waters.

Ghost, the supplement brand that launched in Chicago but is mainly Las Vegas-based now, has signed on as official energy drink of the Vegas Golden Knights hockey team as part of broader alliance with T-Mobile Arena that will span UFC, NCAA, NBA and slate of concerts and other entertainment events. Deal brokered by AEG Global Partnerships kicks off at season opener tonight, with spectators able to purchase the drinks at arena concessions and discovering that what once was the Jack Daniels Lounge has morphed to the Ghost Lounge, featuring Ghost-based specialty cocktails and nostalgic arcade games. Anheuser-Busch, Ghost's partner on canned energy RTDs, is founding partner of 7-year-old arena, which is serviced by distributor Nevada Beverage.

Back in 2018 Finnish dairy giant Valio, known for its Finlandia brand in US, established oddly named Oddlygood arm as vehicle for plant-based dairy alternatives, enlisting outside investors and promising that M&A would be on the menu. Now the first such deal finally has happened, with acquisition on Sep 30 of Sweden's vegan brand Planti from Norway's Kavli Holding. Purchase involves mainly spoonable snacks and cooking alternative cooking products, but it does include altmilks and production plant in Turku, Finland. Further, it serves as signal that more is on the way, ceo Niko Vuorenmaa asserted. "This fits right into our strategy in which we, with the support of our owners Valio and Mandatum Asset Management, are actively pursuing opportunities to grow through acquisitions like this one," he said. Deal terms for co doing €10.9 mil ($11.5 mil) weren't disclosed. We profiled Oddlygood's US push back in 2021 (BBI, Dec 17 2021). Its first plantbevs in US launched last fall (BBI, Sep 22, 2022).

Like other major craft players, Duvel USA aims to make a big push into non-alc beer and beer-adjacent categories in 2024. Among its holdings, Kansas City-based Boulevard will tap the brand that made it what it is, flagship Boulevard Wheat, for its next spin around the NA dance floor, shipping NA Boulevard Wheat with Lemon in time for Dry January, our sibling newsletter Craft Brew News reported. (Co's Flying Start NA IPA initially released as a collab with NA-only leader Athletic.) The riff of Boulevard Wheat is notable as NA versions of core brands have been more common among imports and big mainstream beer brands. In craft, new-to-world brands like Athletic own the category and even existing craft brewers have tended toward new brands for forays into NA (Deschutes NA Black Butte Porter perhaps the most notable exception). Co hopes the new release will help buttress its big hometown wheat beer, alongside fruited variants and "wheat beats the heat" on-premise wing/hot sauce themed programming. Limited Strawberry Wheat has helped this yr and a take with peach will show up in '24.

Calif judge has added to the sum Monster Beverage has won from Bang Energy marketer VPX "based on the strength of Monster's case and Bang's then-CEO Jack Owoc's 'disrespect for the judicial process' during a trial last year that resulted in a $293 million verdict for Monster in the false-advertising case," Reuters reported. With VPX having spiraled into bankruptcy and sold Bang assets at auction, it's not clear how much of those attorney's fees MNST will actually be able to recover, as story noted, but ruling of US District Court judge Jesus Bernal on Fri offered further window into how Owoc's behavior on the stand seemed to weaken his prospects for success. Bernal said the fees were justified because Monster's case was strong and Bang and Owoc had litigated in an "unreasonable manner," Reuters wrote. He said Owoc "repeatedly tried to reference documents that the Court had excluded," "refused to answer straightforward questions during cross-examination," "berated Monster's counsel" and "contradicted his prior sworn testimony numerous times" during trial. "Given the strength of Monster's litigating position and the unreasonableness of Defendant's behavior, this case is exceptional," judge wrote. The new awards increase Monster's damages total to $336 million, one of largest in history of federal trademark law. That's besides the $175 million judgment MNST won for trademark infringement in separate case.

Coca-Cola's crossover brands collectively sold about 90 mil cases since entering the alc bev biz, chief of new revenue streams Dan White said from stage of Natl Beer Wholesalers' Assn convention in conversation with NBWA prexy Craig Purser. Co's experimentation in alcohol started a bit over 2 yrs ago with entrance of Topo Chico Hard Seltzer, a "Covid-driven opportunity" and something of a "canary in the coalmine," Dan told audience in Las Vegas. But developing Red Tree Beverages was next step to "drive growth for everybody in the room," he commented, calling Coke's decision to partner with beer distribs "distinctly different" from key competitor PepsiCo, with its company-operated Blue Cloud arm.

PepsiCo rode pricing to another strong revenue gain in Q3 even as volumes recorded another "moderate" decline in both bevs and snacks. Net revenues grew 6.7% to $23.45 bil, +8.8% net of foreign exchange issues. Gross margin widened to 54.5% from 53.1%. Operating profit rose 19.7% to $4 bil. In core PepsiCo Beverages North America segment, sales rose 7.9% to $7.16 bil on strength of double-digit growth of Gatorade platform, high-single-digit growth of Bubly essence water and mid-single-digit growth of Pepsi and Life WTR. PEP's 10-Q filing indicated that region raised pricing by 12% offset by 6% volume decline. PBNA's operating profit surged 23.7% to $970 mil. PEP is holding to its outlook of 10% organic revenue growth for full year.

From local sugar taxes to changes in government's nutritional guidelines, the soft drink biz has handily weathered a slew of potentially existential challenges in past decade. Are the new breed of diet drugs the next one? A deluge of debate lately has swamped the Internet, TV business shows and now the latest round of quarterly earnings calls, as commentators seek to suss out the potential impact on purveyors of junk food, soda and cookies, both at manufacturing and retail levels. The so-called GLP-1 drugs like Ozempic and Wegovy "have the potential to have a bigger impact on food consumption . . . than, arguably, anything that we've seen before," Bernstein analyst Alexia Howard told Bloomberg. Change won't happen overnight, she noted, but it could be long lasting.

A coupla years ago wine & spirits giant Southern Glazer's sent a tremor thru beer networks when it picked up Constellation-aligned Quatreau CBD bevs, bypassing Corona beer wholesalers who were hesitant to tread in untried segment. Move opened floodgates to moves by rival wine & spirits houses RNDC and Breakthru to quickly assemble portfolios of CBD bevs and that, in turn, motivated many beer houses to get off the fence. (This article appeared yesterday in sibling pub Beverage Business INSIGHTS.)