Beer Marketer's Insights

Beer Marketer's Insights

Pepsi's Blue Cloud distribution hardly garnered the same hot-topic status at this year's NBWA program compared to last year's show in Chicago. But atty Mike Madigan picked up where he left off during this yr's breakout session, arguing that Pepsi is essentially doing "indirectly what they're prohibited from doing directly." The confusion it causes around slotting fees is "a nightmare from an enforcement standpoint," said Mike, while Pepsi's relationship with Blue Cloud raises "very serious questions" about what's a supplier, who's a brand owner, and what's a prohibited interest under 3-tier laws. If Blue Cloud is successful, said Mike, other suppliers will likely try to replicate a similar strategy, which could be "death by a thousand cuts."

Beer has a "very bright future" as the most popular alc bev in the US and the world and 3d most popular bev globally of any kind (behind water and tea), Molson Coors ceo Gavin Hattersley said at NBWA's natl convention. "Beer stands alone as the moderate choice of alcohol consumption," added Gavin. (Editor's note: Beer's "bright future" hopefully will come to pass, but gotta note its challenged present—see latest BI stats above and recall Craig Purser's comments about "five alarm fire" on category health at NBWA just yesterday.)

Drama surrounding distrib rights of Constellation beer brands in Western Washington continues to unfold with promises for even more legal filings to come. After 9th Circuit refused last mo to rehear Olympic Eagle's arguments in support of lower ct's injunction blocking termination and transfer of brand rights to Columbia, Olympic asked the ct to hold off on executing its decision, which would have triggered transfer timeline. Its reason? Distrib plans to bring the issue to the Supreme Ct, it wrote in late Sep filing, while reiterating that the termination and transfer would cause irreparable harm.

Beer shipments declined 5% in Aug 2023 vs year ago as domestic taxpaids remained soft and imports took a backward step, according to Beer Inst Economic Report. Domestic brewer shipments trend improved slightly but still dipped 5%, 770K bbls for the mo, BI estimates. Imports dropped at an even steeper rate for the mo, -6% as Mexican shipments slipped and several other top import countries continued to decline.

If low and no-alc options are really a bigger part of beer's future, Whole Foods is way ahead of curve. "For beer specifically, we continue to see non-alcoholic just absolutely destroy," Whole Foods principal category merchant for beer Mary Guiver commented during panel at Beer Institute meeting on Thurs. For the last 2 yrs, NA beer at Whole Foods wasn't "just double-digit comping," it was "triple-digit comping." And yr-to-date it's growing "well above 50% over last year." NA is now Whole Foods' #3 beer category behind only craft and import. "It's wild," Mary commented, and "it hasn't stopped."

Craft beer's on-prem mix is settling in a few pts below pre-pandemic levels in 2023, Beer Inst veep of insights Danelle Kosmal shared in her final State of the Industry presentation before leaving the position to move with her family to Japan. Down to 29.1% YTD vs 32.9% in 2019 compared to total beer at 15.1% vs 16.7%. So with total beer's on-prem depletions down 1.5% vs 2022 and keg shipments down 4.6%, that's weighing on craft beer segment more, Danelle acknowledged. But on-prem still has some "low hanging fruit" for further recovery and "we really should be up and surpassing 2022," she thought. Call to action on-premise was a theme thruout much of Beer Inst's annual meeting in Denver as beer biz aims to shore up tuff volume losses in recent yrs.

Sierra Nevada sr exec Joe Whitney (currently chief commercial officer) will retire on Jan 5, 2024, the co announced late Friday afternoon. Joe joined Sierra in 2006, following stints at New Belgium and Boston in a beer career that spanned 35 yrs. Joe led Sierra's sales and mktg efforts thru the go-go yrs of growth and thru the more challenging recent period. Sierra is slightly bigger than in 2018, better than most larger craft brewers. He has long been one of the craft scene's more astute and articulate execs, who played a key role in making Sierra go when it got most of its growth, and who also understood and advocated for the segment's strengths with passion.

Headed into 2024, Duvel USA aims to build on bright spots and correct what isn't working with core craft brand families Boulevard and Ommegang, while maintaining momentum for stand-out regional beyond beer marque Quirk and Belgian imports Duvel and Chouffe. That'll include lots of new-news, shared with co's distrib network during virtual presentation late last wk. Co will lean heavily into craft growth areas at opposite ends of strength spectrum with 3 separate yr-round non-alc entries as well as plenty of single-serve cans, often at higher ABVs. And Quirk will try to duplicate its trend-bucking ongoing seltzer gains with an FMB.

Coffee, creamers, espresso martinis, grinding machines, cascara soda, live music - if it impinges in any way on coffee culture it was welcome at the annual NY Coffee Fest this past weekend at city's Metropolitan Pavilion event space. Organized by Allegra Group Events, Coffee Fest opened on Fri with a trade-only day, followed by weekend sessions that were open to consumers too. Here's some of what we encountered when we stopped by crowded consumer session yesterday afternoon:

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.