Beer Marketer's Insights
Another day, another deal for acquisitive Tilray Brands. This time it's picking up Molson Coors' majority stake in Truss Beverage and making the cannabis co a wholly owned subsidiary as it continues to build out both its infused and uninfused bev offerings. For now, at least, this is strictly a Canadian play after Truss retreated from regulatorily unsettled US market. Tilray's purchase of MC's 57.5% remaining stake in Truss gives Tilray a share of 36% of Canadian cannabev market via portfolio of brands that include XMG, Mollo, House of Terpenes and Little Victory, it said.
Crossover Brands to the Nth Degree
If you thought the pace of crossover brands, collabs and celeb entries in alc bevs was already dizzying, recent additions suggest you ain't seen nothing yet. In just the last several days: KFC launched limited-edition 11 Herbed and Spiced Rum in UK via partnership with Dead Man's Fingers. Kellog's Eggo Waffles teamed up with Sugarlands Distilling to launch a brunch-flavored liqueur.
Stone's Richmond, VA facility will begin producing 3 Sapporo beers by late November (Premium, Reserve and Black), followed by a 4th next yr (low-carb White). As combined co continues its quest to essentially double total capacity, it'll look to brew 156K bbls in Richmond this yr followed by 320K in 2024 and 360K bbls per yr by 2025, coo Sean Monahan and sr director of brewing ops Robert Kunz told Richmond Biz Sense. "Stone Richmond is in the process of doubling its staff, installing new fermenters, adding a faster canning line and reworking its storage procedures ahead of the Sapporo launch," article notes.
Could the Bud Light boycotts finally ease up? The brand showed "substantive signs of progress" as it seeks to bring consumers back into the fold, Deutsche Bank wrote after commissioning survey of 600 consumers earlier this mo. "Crucially, the proportion of former Bud Light drinkers who are [saying] they are very unlikely to buy the brand in 3-6 months time has reduced from 18% to just 3%, a significant improvement," analyst Mitch Collett wrote and Fortune reported, among other outlets. That's "a trend" and "not simply volatility," he thought, predicting a bounce back in BL sales in coming mos. Report points to attitude shifts among demographics in which boycott's been most pronounced: consumers age 55+ and those making below $25K per yr. Yet even as total AB trends improved slightly of late (see Aug 16 issue), Bud Light $$ sales still stubbornly down ~25% in scan data, declining closer to 30% by volume.
Tilray Acquires Remaining 57.5% Stake in Truss Bev Co from MC as MC Exits Cannabevs Entirely
Shortly after striking deal with AB for ~8 mil cases of craft brews, Tilray's at it again, this time inking a smaller deal in the cannabis beverage space. It'll buy remaining 57.5% stake in Truss Beverage Co from Molson Coors Canada, cos announced this morn. Recall, MC and Truss parent co HEXO unwound Truss USA JV for CBD bevs in late 2022 (see Nov 17, 2022 issue) after MC took $28.6 mil impairment charge on Truss investment. Cos initially expanded Veryvell CBD water to 17 states with DTC approach (see Vol 23, no 208), but sales didn't amount to much. Separately, Truss THC bevs got off to solid start in Canada and co continued to build roster of products there. And Tilray separately completed acquisition of Truss parent co HEXO in Jun 2023.
Don't miss this year's Beer Insights Seminar, Nov 12-13 at Convene in NYC! Our speaker lineup already includes Constellation Brands ceo Bill Newlands, Athletic Brewing founder/ceo Bill Shufelt, BeatBox ceo/co-founder Justin Fenchel, NBWA chief economist Lester Jones, a panel of Wall St analysts plus BMI prexy Benj Steinman's industry overview in an unprecedented yr. More speakers to be announced soon. Sign up and save $200 at the discounted early-bird rate.
Tilray's deal to purchase 8 mostly declining brands and breweries totaling near 550K bbls from AB for just $85 mil marked several striking shifts in craft beer landscape and even for industry overall. Once deal closes (expected this fall), it will instantly catapult Tilray into #5 craft player in increasingly challenged segment, selling nearly 900K bbls. From outta nowhere 3 short yrs ago. Deal also shows that AB, top craft player and top brewer overall, is rethinking segment. AB downsizing for a fraction of what it put in to purchasing and building out those assets. Values of craft brewers have come way down. Purchase price only comes out to about $150-160 per bbl, compared to $1000 or more in craft's heyday. Moreover, Tilray one of several new players that emerged in recent yrs, thru M&A and/or growth, to take a small but fast-growing piece of US beer.
Beer volume is hurtin' at historic rates thru 1st half 2023. Shipments slid an estimated 5%, shedding over 5 mil bbls for 6 mos thru Jun 2023 vs year ago. That included soft Q1 vs easy comps and brutal Q2 amid massive drop from Anheuser Busch and several other top suppliers shipping behind depletions. Shipments to wholesalers fell 4 mil bbls in Q2 alone, according to available TTB and US Dept of Commerce data.
An all-star lineup of speakers will take the stage at the 2023 Beer Insights Seminar, Nov 12-13 at Convene in NYC. You'll hear from Constellation Brands CEO Bill Newlands, talking about co's continued growth and prospects. In this unprecedented year of change, we'll bring you a top-notch panel of Wall St analysts, including Bonnie Herzog of Goldman Sachs, Carlos Laboy of HSBC and Robert Ottenstein of Evercore ISI.