Beer Marketer's Insights
Wow! This deal marks the emergence of Tilray as a major player in craft. It will triple in size, grow from 4 mil cases to 12 mil cases, with pro-forma craft beer revs of $250 mil, co sez. This will make it #5 craft brewer, according to Tilray. Only AB, Boston, New Belgium and Sierra will be larger. That's an impressively quick ramp up, especially considering Tilray is primarily a cannabis co. Aphria bought its first craft brewer, SweetWater, in late 2020 before it merged with Tilray in 2021. In less than 3 yrs, prior to this big AB deal, co also acquired Montauk Brewing, Breckenridge Distillery, Green Flash and Alpine Brewing. Even as its cannabis biz faces huge challenges, it's building a sizable craft beer biz, doubling down while segment gets more challenging. Recall, Tilray reported total revs of $628 mil in fiscal yr ended May 31. Its alc bev revs were up 33% to $95 mil.
Wow! This deal marks the emergence of Tilray as a major player in craft. It will triple in size, grow from 4 mil cases to 12 mil cases, with pro-forma craft beer revs of $250 mil, co sez. This will make it #5 craft brewer, according to Tilray. Only AB, Boston, New Belgium and Sierra will be larger. That's an impressively quick ramp up, especially considering Tilray is primarily a cannabis co. Aphria bought its first craft brewer, SweetWater, in late 2020 before it merged with Tilray in 2021. In less than 3 yrs, prior to this big AB deal, co also acquired Montauk Brewing, Breckenridge Distillery, Green Flash and Alpine Brewing. Even as its cannabis biz faces huge challenges, it's building a sizable craft beer biz, doubling down while segment gets more challenging. Recall, Tilray reported total revs of $628 mil in fiscal yr ended May 31. Its alc bev revs were up 33% to $95 mil.
ABI Chief Supply Officer Pete Kraemer Transitioning to Advisory Role; Ricardo Moreira to Backfill
One of the last vestiges of pre-ABI sr mgt personnel is moving off the company's leadership team. Effective Jan 2024, Pete Kraemer will transition from his role as ABI's chief supply chain officer to become a "brewing and beer quality advisor" to ceo Michel Doukeris. Taking over as global supply chief will be Ricardo Moreira, currently ceo of ABI's Africa zone. Cassiano De Stefano will step in to lead the Africa Zone after 5 yrs as biz unit prexy for Grupo Modelo in Mexico.
Diageo Beer Co USA Pitching New Take on Captain Morgan FMB Sliced, Eyeing Natl Launch Next Yr
Will Captain Morgan be next crossover brand to make a splash in surging FMB space? Tho this ain't the #2 rum brand's maiden voyage into malt-based seas, perhaps it can carve out some space amid newfound popularity of cocktail-inspired RTDs. Captain Morgan Sliced expected to launch early next yr, according to Diageo Beer Co USA pitch deck, clocking in at 5.8% ABV. Vty 12-pk of 12oz slim cans will include pineapple daiquiri, strawberry margarita, mango mai tai and passionfruit hurricane flavors. Co targets a price pt premium to core Smirnoff Ice FMBs. DBC sees oppys to attract a consumer base that overindexes under age 34, female and Black/Hispanic. Deck also cites large existing overlap among Captain Morgan and FMB buyers. And co's considering considerable spend behind brand, including possibility of natl tv spots to support launch.
Brief report from HSBC managing director Carlos Laboy acknowledged ABI's good global news, but kept focus on "deepening scope" of US problems too. "We found it positive and noteworthy that Mexico, China, Africa and Brazil posted revenue growth in the low double-digit range," wrote Carlos, following ABI results. "These major markets helped to diffuse the volume dip of the firm's biggest brand in its biggest market."
AB at 29 Share of $$ in 4Wk NielsenIQ Data; Modelo Especial Fully 2 Share Ahead of Bud Light
Even as trends essentially stayed the same, staggering losses continued to take toll on AB in latest NielsenIQ scans. Co dropped below 30 share of $$ to just 29.2 in 4 wk data thru July 29, while Modelo Especial climbed fully 2 share pts ahead of Bud Light for the period.
Boston Beer could be facing an additional hit to the company wallet due to Truly hard seltzer's continued declines, on top of previous impairment charges and shortfall fees to 3d party brewers, among others. Tho conversely, Ardagh Metal Packaging could be on the hook for producing faulty cans that allegedly caused Boston all kinds of production problems.
ICYMI (In Case You Missed It)
- AB "increased investments" in key brands; MC will invest additional $100 mil in mktg; Mark Anthony is ramping up mktg and commercial spend by 15%; Boston Beer now expects $20-40 mil increase in FY ad, promo & selling guidance vs initial range between down $5 mil and up $15 mil
- AB's on-premise trends are "pretty similar" to off-premise scans, said global ceo Michel Doukeris
- MC snagged incremental 12K tap handles last qtr, about a 10% increase to its total taps as on-prem grew a few pts faster than off-prem for the qtr
- Diageo Beer Co outperformed its spirits in US, tho neither grew volume in fiscal yr ending Jun 30
- Canned single serves (+$393 mil) grew more than 3x as fast as 12pk cans (+$116 mil) in Nielsen YTD scans thru July 15 from Bump Williams Consulting.
Chicago Beer Drinkers Feeling Price Pinch
While beer prices have not risen as much as food overall and other products, "beer lovers" in Chicago area "are feeling it now at the height of summer," particularly at live events, reported Chicago Tribune. At the recent NASCAR street race fans paid a whopping $63 for a 6-pk of Busch Light or Mich Ultra. Cubs are offering a 26-oz commemorative beer bat for just $28.99. White Sox are tied with several teams for 2d highest stadium beer prices, over $11 bucks for a 16-oz. "Beer has not been immune to inflation we've seen in the rest of the economy, though rates have been lower than lots of other food products," BA's Bart Watson told Trib. "Everybody now has higher costs as part of their business," noted local Revolution Brewing's mktg head Doug Veliky. "Wages aren't necessarily keeping up with the cost of beer…and a little less beer is being purchased right now," he acknowledged.
Spirits Volume +1.2% in Control States for 6 Mos, Driven by Double-Digit Cocktail, Tequila Gains
Control state spirits trends improved in June, outpacing both 12 and 6-mo trends. Total volume up 2.3% for the mo, NABCA reported this morn, with $$ up 4.9%. But major contributor was huge 26% volume jump and 31% $$ gain in PA, where a planned update to state's digital ordering system for early July led to larger orders in June. State also had 5 more selling days vs prior yr. PA is 2nd biggest control state behind MI, which had 7 fewer selling days, resulting in double-digit declines in volume and $$. In all, selling days flat across 18 control states. So call it a wash. Avg price/mix up 2.6% in June, in line with May but a bit behind Nov-Mar.