Beer Marketer's Insights

Beer Marketer's Insights

Greatly altered financial landscape has had many bevcos scrambling to revamp their operations, retreating from expensive landgrabs in order to take their first steps on path to profitability that investors now covet. At recovery bev pioneer Kill Cliff, that journey was accelerated by financial impasse that arose a coupla years ago when owner of family office that was due to acquire control abruptly passed away, putting company under pressure until a familiar name materialized to take 85% ownership control: none other than its founder, the former Navy Seal Todd Ehrlich. Hair-raising as it was at the time, that episode in some ways proved to be a blessing in disguise, ceo John Timar recollected to us in interview on Fri. "We did our pivot before we were forced to do it" by the changed environment. That's cleared way for co to build out its twin energy and CBD lines in far more efficient manner, foment buzz-generating launches along lines of Elk Blood CBD extension undertaken with endorser Joe Rogan, and narrow DSD network to most productive partners.

Beer Insights Spring Conference

An all-star lineup of speakers will take the stage at the 2023 Beer Insights Seminar. Hear from a top-notch panel of Wall St analysts, including Bonnie Herzog of Goldman Sachs, Carlos Laboy of HSBC and Robert Ottenstein of Evercore ISI. NBWA's Lester Jones will offer a high-energy, data-packed presentation. And you'll get updates from a group of fast-growing suppliers, including Athletic Brewing's Bill Shufelt. The program of top execs and industry thought-leaders also features Constellation Brands ceo Bill Newlands and BMI prexy Benj Steinman.

Beer Institute will begin formal search for new vp of research as Danelle Kosmal announced she's leaving the org later this yr via LinkedIn post late last week. Danelle is "stepping away" from her veep of research position with BI as her partner accepted a role with the Office of Naval Research in Tokyo, Japan, and their family will be moving to Japan later this yr for the following 2-3 yrs, she shared. "I'll be around for a few more months," including thru Beer Inst annual meeting in Denver, CO during 1st week of Oct, said Danelle. After the mtg, she's gearing up for Japan. And after a break, "I hope to re-enter the beer and beverage alcohol industry, in whatever capacity seems right for me and my family during our 2 to 3-year stay in Tokyo," wrote Danelle, adding that she's already talked with some folks about potential next steps and considered consulting, among other options. Beer Inst has not made its own official announcement of Danelle's move at presstime.

While beer and spirits $$ growth paces have been neck-and-neck in scans for most of the yr, spirits trends pulled ahead considerably in tracked off-prem channels this summer, new NielsenIQ report shows. For 4 wks thru Jul 22, spirits $$ grew 5.5%, beer grew 2.5% and wine grew 1.1% compared to YTD spirits +2.9%, beer +2.5% and wine -1%. Spirits volume grew much faster in latest 4 wks, +9.5%, while beer and wine volume each dipped ~2.5%. Continued growth from High Noon, volume +31% for 4 wks, among other RTDs collectively alters spirits mix shift considerably while traditional spirits also ain't takin' as much price as other alc bev categories. Plus, beer industry continues to feel the weight of its largest co's declines, as AB volume dropped 15% for 4 wks thru Jul 22 with Bud Light -29.5%. (Editor's note: Bud Light $$ share now just 0.2 pts ahead of Modelo Especial YTD.)

Heineken USA net revs "declined by a low single digit organically," co reported this morn, "as lower shipments were partially offset by price mix effects." Suggests HUSA shipments still down mid-singles in 1st half, going against period when supply chain severely disrupted and it couldn't ship enuf beer. Depletions improved in Q2 however. "Overall depletions declined by a low-single digit" in 2d qtr, led by Heineken brand which "grew volume, with depletions up by a mid-single digit." That was "driven by the launch of Heineken Silver, with encouraging early results in distribution build-up and rate of sale" and also "continued momentum of Heineken 0.0, up in the mid-teens." Recall, HUSA prexy Maggie Timoney said in early 2023 that HUSA "will be up" in the US this yr.

NY judge handed down stiff sentence of 5 years and 3 months to Colo man who was convicted last year of deploying funds contributed to fund border wall on range of personal items, including Trump-themed energy drinks. In suit, prosecutors had used financial records to show that Timothy Shea, as part of fund-raising effort that included Steve Bannon, sent more than $400K from We Build the Wall effort "to one of his companies, Ranch Property Marketing & Management," which then sent some of the money to Shea and his wife, as NY Times reported.

Alc-alternative spirits maker Drink Monday, which has been plumbing key segments since starting with eponymous gin entry, is about to enter rum segment. Due next Tues, Aug 1, is Monday Rum, first entry in line to include sugar in interest of best replicating flavor of alcoholic entries, co teased on social media. "Don't worry we kept it low!" co said of 3 g per serving, alongside naturally sourced ingredients from Caribbean.

Heidelberg will soon consolidate 3 of its warehouse facilities into 1. The sprawling Ohio distrib decided to combine volume from its Ohio Valley Wine Co location (in Evendale) as well as its Cincinnati warehouse into Heidelberg's Dayton facility for greater efficiencies, co explained in note to supplier partners reported by our sibling letter Insights Express. It expects consolidation to be completed by Oct 2. Recall, Heidelberg was acquired by Redwood Capital for ~$1 bil in late 2021, with 9 warehouses, over 18K brands and circa 700 suppliers at time of purchase (including Anheuser-Busch, Constellation, Mark Anthony, Boston Beer, extensive craft & wine book and complement of NAs). So perhaps this move was only a matter of time.

Coca-Cola's decision to exercise its option to distribute Bang Energy brand just acquired by Monster Beverage makes all the sense in the world, considering that leaving it to Monster's alternative distribution system, CanArchy beer houses, would have had MNST and KO partners warring against each other in marketplace. But it also created a headache for Monster, which needs to keep robust pipeline of promising brands headed to beer network alongside entries like its alcoholic Monster extension Beast Unleashed and their incumbent CanArchy brands like Oskar Blues and Cigar City beers. About 100 CanArchy houses sell Bang, from what we hear, and likely were hoping to enjoy revival under Monster stewardship following bankruptcy auction. And don't forget, some of these same houses may have lost Monster brand itself to Coke years back. Or Bang brands to Pepsi.

Pair of recently re-energized properties of serial entrepreneur Lance Collins have pulled in significant new capital to augment momentum. After recent reshuffle that returned Collins himself to day-to-day role as ceo and inaugurated thoro restage, Zen WTR has raised $55 mil in new capital, $25 mil of that from Collins himself. Meanwhile, A Shoc Energy platform allied to KDP system, riding uptick in its Accelerator thermogenic line, has pulled in about $14 mil.