Beer Marketer's Insights
MNST Alc Brands +88% to $61 Mil in Q2; Beast Unleashed in 28 States; Nasty Beast Natl by Mid-2024
Monster's net sales from alc brands grew 88% to $61.1 mil in Q2, up from $32.4 mil yr ago, co reported late yesterday. That includes Beast Unleashed plus craft and hard seltzer brands purchased as part of Feb 2022 CANarchy acquisition. But The Beast made up most if not all of Monster's gains, as CANarchy's portfolio continues to decline in scans (see July 28 issue). Total Monster alc bev sales jumped $14.8 mil vs Q1, becoming a bigger piece of co's biz. Tho at $107.4 mil thru 1st half, still just 3% of Monster's nearly $3.6 bil sales YTD.
"Constellation has issued a new notice of termination for Olympic Eagle's distribution rights," co confirmed in joint statement filed by both cos with fed Dist Ct in WA today. It was inevitable, of course, after 9th Circuit ruling last mo, but now memorialized before the ct. Document featuring statements and arguments by both sides requests a status conference before judge to weigh Constellation's renewed bid to stay, or pause, expensive discovery stage, currently ongoing. Recall, Dist Ct case continued while 9th Circuit considered appeal and judge in this ct denied STZ's request to stay discovery earlier this yr. That issue back on table.
Now Thuggizzle's got one too. Freestyle rapper whose given name is Phillip Hodge has entered aluminum-bottle water segment with Thuggizzle Appalachian Mountain Spring Water, 16-oz line sourced from aquifer in remote Tiger, Ga. Operating as Thuggizzle Water LLC out of San Antonio, Hodge has been trickling new entry out to corner stores, entertainment venues and vending machines around Texas, per announcement, in bottles with labels that sport Hodge's likeness. Messaging aims to capture sustainability benefit of BPA-free bottles as well as Hodge's own backstory about growing up in shelters, group homes and foster care system in San Antonio.
The Plug Drink, which broadened from hangover cure to liver-related wellness brand, is accelerating its foray into retail distribution with signing of broadliner KeHe and 4 DSD partners, with fifth on the way. LA-based brand launched by brothers Justin and Ray Kim has entered Point Blank Distributing in Ore, Best Brands in Tenn, Seacoast Distributing in San Diego and KC Natural in NY, with talks under way in Las Vegas too. Plug Drink has enlisted KeHe's help in mid-Calif, Illinois and Texas, Ray Kim told us today. Until now, it had moved only thru Great Lakes Wine & Distributors in Mich and Beauchamp and Hi Touch in LA area. As we'd reported, brand broadened reach last year from hangover cure based on Korean remedy to broader restorative focused on liver health (BBI, Jun 22 2022).
ESG isn't a corporate dead end any more. Keurig Dr Pepper is rewarding performance of ESG-focused exec with move to core of biz by elevating Monique Oxender to interim chief corporate affairs officer, succeeding retiring Maria Sceppaguercio and reporting to chmn/ceo Bob Gamgort. She also joins executive leadership team. Role extends her corporate responsibility role to include government affairs, corporate comms and internal comms. Gamgort said promotion rewards the 11-year KDP vet for building "a best-in-class corporate responsibility function at KDP" as svp/chief sustainability officer. She'd held similar role earlier in career at Ford Motor. Sceppaguercio is staying on as advisor thru year-end, at which point Oxender presumably sheds "interim" in title . . . PepsiCo and Walmart last week announced 7-year collab to pursue $120 mil worth of investments that will support US and Canadian farmers in adopting regenerative ag practices that improve soil health and water quality. Ambition is to accelerate adoption of regenerative ag on over 2 mil acres of farmland and deliver 4 mil metric tons of greenhouse gas emission reductions and removals by 2030, partners said. It will offer flexible regional approach to growers of potatoes, oats, corn, wheat, soybean, rice and other crops of importance to both partners.
Monster Beverage yesterday afternoon reported continued double-digit growth in Q2 and offered first glimpse of its plans for its newly acquired rival, Bang Energy, which it sees as nestling neatly within current portfolio of Monster, its Bang fighter Reign and Reign's wellness extension Reign Storm.
This spring, amidst the massive backlash against Bud Light for sponsoring social media posts by transgender influencer Dylan Mulvaney, Senators Ted Cruz and Marsha Blackburn raised concerns that the posts were designed to appeal to youth. In a 2-1 decision issued last mo, the Beer Institute's independent Code Compliance Review Board (CCRB) disagreed, finding the posts properly adhered to the org's marketing code. Much like media coverage of the posts and their fallout, the senators focused their attention on Mulvaney, not Bud Light or the brand's owner Anheuser-Busch. As such, the episode hints at ways alcohol can offer a useful hook for targeting conduct far removed from drinking.
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, 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.
Diageo's North American organic net sales closed out the co's fiscal 2023 flat on a 5% volume decline. But beer did better amid "US spirits industry normalization," ceo Debra Crew commented on earnings call this wk. US spirits net sales dipped 1% on a 6% volume drop as co lapped double-digit gain yr ago thanks to distrib inventory increase, especially among imported spirits brands. In all, co figures it shed 1 basis pt (0.01) share of total alc bev mkt in US, Debra shared. But that followed gain of 0.6 pts in last 2 yrs. Share loss in past yr driven by its underdeveloped biz in RTDs (volume down 11% in North America) and 12% drop by Crown Royal. High distrib inventories much discussed lately, but Diageo's back to "historical levels" after US depletions ran ahead of shipments by 2 pts in fiscal yr; STRs ran 3 pts behind in fiscal '22. Diageo Beer Co USA volume slipped 3%, with organic net sales up 1%. Guinness volume up 4% in North America and 1% globally. The brand's net sales jumped 16%, driven by big price changes in Europe and Africa, where inflation much steeper than US. Co's total global volume dipped 1%, but revs popped 6.5%, with oper profit up 7% on organic basis.
Heineken USA shipments, depletions and revenues fell in 1st half 2023 against relatively easy comps. HUSA shipments were down a "high-single-digit," global ceo Dolf van den Brink said on earnings call. So YTD shipments slipped steeper than mid-single-digit declines in Q1 and FY22, despite launch of Heineken Silver and improved supply. Net revs fell by a low-single-digit in H1 as "lower shipments were partially offset by price mix." US depletions also down low-singles but "outperform[ed]" mkt in Q2. Brand Heineken up mid-singles, driven by "encouraging early results" for Silver and Heineken 0.0 up "mid-teens." Tho HUSA revs and depletions both decelerated from low-single-digit growth in Q1.