Beer Marketer's Insights
Monster Beverage offered range of flavor extensions, augmenting 16-oz Reign performance line with Sour Gummy Worm and its 12-oz thermogenic Reign Storm line with Guava Citrus and Citrus Zest, fortifying subline that plays in space where Celsius reigns. Also in the mix was grapefruit-flavored Monster Ultra Fantasy Ruby Red, which departed from usual single-color can background to go with character illustrations against background that segues thru range of shades. Monster's juice line adds a Rio Punch entry, Reserve adds Peaches N' Creme and Recover gets a Green Tea entry. And its NOS brand is movin' into zero-sugar realm. As for recently acquired Bang Energy brand, that received visible display at expansive booth, with company indicating it has innovation on way as it seeks to maintain brand within premium segment.
Protein shake player Don't Quit took the wraps off its new energy extension at NACS, revealing formula that balances energy lift with hydration benefit. Recipe of naturally sweetened canned line includes coconut water, 150 mg of caffeine sourced from green tea, 250 mg of electrolytes and focus-enhancing Cognizin citicoline. Anticipated retail price of 12-oz slim can item is $3.29. Don't Quit, recall, was launched by "Body by Jake" influencer Jake Steinfeld and moves thru Keurig Dr Pepper bottling system. Among retailers who're early to embrace new line are Ralph's, CVS and Walgreen. Word had begun to percolate about new line on social media just ahead of show (BBI, Oct 2). New entry joins KDP portfolio dominated by its new partner brand C4 as well as likes of Venom and Xyience.
Jolt Cola founder CJ Rapp is back in the energy biz. His current venture, Karma, which is aligned with Constellation and its national network of Corona and Modelo wholesalers, used NACS as platform to unveil Karma Energy Water, bringing combo of energy and focus that's increasingly familiar in segment but in the form of a cap-dispensed water. New entry contains 150 mg of caffeine sourced from green tea, B-complex vitamins, nootropics, adaptogens and Kyowa Hakko's Cognizin citicoline brain-health ingredient, which has been finding a role in energy plays ranging from C4 Smart Energy to Don't Quit's energy extension that also debuted at show. (Kyowa USA team was proudly roaming show floor enjoying their handiwork.) Using sugar rather than purportedly "natural" sweeteners like erythritol, items come in at 20 calories. "Truly a natural energy drink," sales vp Matt Coleman emphasized to us. Line is debuting in 5 flavors: Raspberry Peach, Melon Dragonfruit, Blueberry Watermelon, Orange Mango and Pineapple Coconut. It employs proprietary Push Cap tech found in core probiotic waters and CBD entries that keep ingredients from degrading before their time of use. As noted, launch marks return to his roots for Rochester, NY-based Rapp, who helped inaugurate energy segment in mid-1980s with Jolt Cola line that contained then unprecedented levels of caffeine. Word on launch had bubbled up last month (BBI, Sep 15).
Don't miss this year's Beer Insights Seminar, Nov 12-13 at Convene in NYC! The program is now complete with our latest additions: AB High End prexy, Andy Thomas, plus Tilray Brands chairman/ceo Irwin Simon and prexy of US beer division Ty Gilmore. Check out the full lineup and register now! Space is limited.
Beer Inst Meeting: "Headwinds" and "Danger" Meet "Celebrations" of Beer; Growth Initiatives?
Beer Institute met in Denver at fraught time for beer industry overall amidst steeper volume declines, concerns about the category and double digit drops for its largest member. While the meeting did offer some probing analysis of the industry data (see above), topical discussions and speeches about issues and headwinds, it did not demonstrate a sense of urgency to fix the industry's volume problems.
Strong Q2 Under its Belt, Constellation Soars Toward 30 Mil Bbls; "Judicious" Pricing Key
Constellation shipped almost 9 mil bbls in its fiscal 2nd qtr ended Aug, up 8.7% over yr ago. So it closed out its 1st half near 16.7 mil bbls, up by 23% in 2 yrs and 40% in 5 yrs. Just another record on co's way to more. STZ ships 45% of its beer volume in 2nd half, execs reminded on earnings call yesterday. If they hit that on the money, co would end its fiscal yr shipping over 30 mil bbls for the 1st time, up over 7%. But that still implies a slower 2nd half, a conservatism that puzzled some analysts, encouraged others.
"This is not the same old Molson Coors," ceo Gavin Hattersley declared to kick off co's strategy day for investors on Tues, its first since 2017. "A lot has changed," with MC on track to deliver 2d straight yr of top- and bottom-line growth, Gavin noted, unveiling revamped "acceleration plan" as evolution of co's revitalization framework. Despite upbeat meeting and announcement of $2-bil share repurchasing program over 5-yr period, many analysts retained a neutral outlook. And while TAP stock popped a bit over 2% in day after meeting, it fell over 6% on Thurs, landing more than 4% below where it started. Share buybacks resulted from improved financial flexibility, with S&P upgrading Molson Coors' credit rating one notch within 48 hours of MC's meeting. MC halved net debt from $11.5 bil in 2016 to $5.7 bil by end of Jun '23; reduced leverage ratio from 4.8x to 2.5x in that timeframe.
Beer industry trends remain (historically) tuff in 2023, but there are several things to celebrate this yr about beer too. That's the main message Beer Inst veep of insights Danelle Kosmal shared from the stage in her final BI state of the industry presentation before leaving role to move with her family to Japan.
Flashback Friday
This week in 1984, alcohol advertising was facing pressure from fed gov't and alcohol consumption was under attack from American Medical Assn. "Is the federal government laying the groundwork for a more active role in controlling the promotion and availability of alcoholic beverages?" asked AdAge in its report of an unannounced meeting held with reps from AB, Miller, Coors, USBA and Justice Dept. At meeting, Justice Dept official communicated that Fed govt was ready "to take a tough stand on what might be permitted in alcohol ads," if suppliers "were unable to reach a consensus on how to attack the problem of juvenile alcohol abuse." That same week, Journal of American Medical Assn (JAMA) took hardline stance on alcohol and wrote that pregnant women should have no amount of alcohol at all and that there was no safe limit to drink and drive a vehicle. JAMA also wrote: "The huge economic burden that falls to society from illness or accident of the problem drinker somehow should be borne by the drinker, other drinkers or those who provide the drink," in form of higher taxes and health insurance premiums.
First AB distrib deal announced since Jun struck in MI, as West Side Beer Distributing will acquire Atlas Sales in Battle Creek, MI, cos confirmed after Beer Biz Daily first reported. Atlas sells around 600K cases/yr with AB making up vast majority of volume. Portfolio also includes New Belgium and CANarchy/Monster, plus Deschutes and other local/regional brands.