Beer Marketer's Insights
Maybe there's some synergy there. Jones Soda is releasing a new flavor, Hatch Chile & Lime, that's being made available across both its core Jones Soda line and via its affiliated Mary Jones cannabis brand. The canna-version will enter Calif dispensaries in both 10 mg single-serve and 100 mg multiserve formats, the Seattle-based co announced. JSDA ceo David Knight promised that Hatch Chile & Lime "is just the start of the incredible flavors we'll be bringing to the THC community" . . . Boston Beer has added a new non-caffeinated flavor to its TeaPot line of cannabis iced teas, Good Evening Iced Tea in Blueberry Chamomile, entry containing similar 5 mg of THC per 355-ml can, this time Indica-dominant Black Sugar Rose strain grown by Entourage Health under its Color Cannabis brand. Brand promise is "relaxing and calming sensation, perfect for unwinding after a long day," per announcement. "A refreshing alternative to your evening glass of wine," added Paul Weaver, cannabis chief at Boston Beer. New entry joins lineup of Mango Green Tea and Lemon Black Tea, all 3 of them noncarbs. Like all TeaPot offerings, this Blueberry Chamomile is non-carbonated, crafted to remove any cannabis taste or aroma, and contains 5mg of THC per 355mL can.
Zevia shares continued to trade down 26% this week after LA-based co warned on Mon that supply chain collapse will bring in Q2 net sales in $42 mil range rather than previously anticipated $48-51 mil. For full year, sales will likely come in at $163-168 mil rather than $180-190 mil. Change was "driven entirely by disruption of supply chain service levels amid an operations transition," co indicated. "Demand remained strong following a Q2 price increase and the refreshed brand design has supported accelerated in-store presence, but short-term supply chain logistics challenges hindered fulfillment and impacted net sales results in the quarter." Prexy/ceo Amy Taylor cited "aggressive measures, including changes in supply chain leadership and pausing some components of our supply chain transition to restore service levels" . . . With market valuation that's a fraction of annual sales, Reed's Inc brass has long lamented the scant respect its shares get from long-suffering shareholders. Now it's resorting to perks tied to size of their share position ranging from copper mule mug to VIP invitations to "unique company events and brand experiences" via partnership with Stockperks, "the premier marketplace for retail investor engagement."
Avg price increases, which have been up double-digits in majority of bev segments throughout the yr, remained high but eased a bit in latest 4 wks thru Jul 15, per NielsenIQ data reported by Goldman Sachs.
Coca-Cola delivered balanced Q2 today as chmn/ceo James Quincey heralded co's ability to win over new Gen Z consumers and advised that era of riding price hikes to revenue growth may be nearing its conclusion in most countries. Net revenues grew 6% to $11.97 bil, +11% on organic basis compounded of 10% gain in price/mix and 1% gain in concentrate sales. Operating income rose 3% to $2.4 bil. For 6 mos, revenues are up 5% to $22.95 bil and operating income flat at $5.77 bil. Solid performance sent shares edging up in trading today. Among segments of interest to BBI readers, earnings announcement and subsequent analyst webcast didn't mention energy category, including likely move of Monster's acquired Bang brand into Coke system, nor any word on progress in building RTD coffee biz in US, tho KO's acquired Costa brand did well in UK and China.
Greater Chicago, the sports and alc beverage world were all stunned to hear of sudden passing of Breakthru founder/co-chmn Rocky Wirtz last night. Rocky grew Breakthru Beverage into a mega alcohol distrib, 3d largest in US following merger with The Charmer Sunbelt Group in 2016. Co has grown to over $7 bil in sales across beer, wine and spirits, employing 8,000 associates doing biz in 16 states and Canada. In Chicago, Rocky will forever be known for revitalizing the Blackhawks back into an NHL powerhouse, winning 3 Stanley Cup titles in 2010, 2013 and 2015. His son Danny, who's ran Blackhawks since 2020 and serves as vice chmn at Breakthru said in a statement: "Our hearts are heavy today. Our dad was a passionate businessman committed to making Chicago a great place to live, work and visit, but his true love was for his family and close friends."
Molson Coors made another key hire just 2 wks after tapping Ann Legan as its Miller mktg veep (see Jul 10 issue). MC named Natalie Maciolek as chief legal and government affairs officer, effective Sep 5. Natalie joins MC after most recently serving as gen counsel/corp secretary at Kohler Co since 2018 and served at that co in various legal roles since 2013. She'll replace Anne-Marie D'Angelo (see Apr 10 issue). Natalie interned at Miller Brewing Co when she was attending law school before spending 9 yrs as an associate and partner at law firm Quarles & Brady. "Natalie's breadth of experience providing trusted and strategic counsel will be a tremendous asset to Molson Coors and our legal team across the globe," said ceo Gavin Hattersley. With these latest two hires, MC continues to build its roster of female execs in key leadership roles, which also includes cco Michelle St. Jacques, cfo Tracey Joubert, and cmo Sofia Colucci.
Alc bev revs continue to grow in importance within cannabis co Tilray's mix as most recent brewer acquisition Montauk (in Nov 2022) added incremental growth. In fiscal year ending May 2023, Tilray alc bevs grew 33% to $95.1 mil including 42.5% growth to $32.4 mil in fiscal Q4 (Mar-May). That's as total Tilray revs were flattish at $627.1 mil for the fiscal yr including +20% to $184.2 mil in FQ4. So alc bevs represented 15% of Tilray's mix for the fiscal yr and 18% of the mix in the latest qtr. Alc bevs even more important to Tilray in terms of profit at 31.5% of total gross profit for 12 mos thru May (tho 24% of total GP in latest qtr). Tilray cannabis returned to double-digit growth in FQ4 but declined 7% to $220.4 mil for 12 mos thru May 2023 due to medical and international drops. Altogether, even as total Tilray reduced operating expenses significantly in FQ4, co still posted $90-mil operating loss for the qtr and $1.37 bil loss for 12 mos.
Coca-Cola continues to mostly minimize its alc bev endeavors, at least in public discourse. Even as Red Tree grew roots in Q2, its creation is more of a "technicality" than some new "big step," ceo James Quincey commented on earnings call this morn. It isn't a "change of strategy" and it's "not a vehicle to distribute," but rather an "optimization" for Coke to better coordinate mktg with its US alc bev partners and establish "better separation" from its core non-alc biz.
AB Will Lay Off Hundreds of Employees; No Brewery, Warehouse Staff, Drivers or Field Sales
Something like this hadda happen eventually, unfortunately, as AB continues to decline in mid-teens in scan data over last several months, since the Bud Light/Dylan Mulvaney controversy erupted. Today AB announced a "restructuring" that "includes the elimination of positions across every corporate function" at AB, "representing less than 2% of its U.S. employee population." AB has over 19,000 employees in US, according to its website, so 2% would be 380 people. No comment on how much less than 2%, but announcement suggests likely 300-350 people impacted.
From month to month, think pieces weighing research about alcohol's impact on health reflect the familiar vacillation between hair-on-fire and ho-hum. This mo, a columnist for The Atlantic went to bat for "the value of pleasure," oft ignored by "recent rhetoric" that "goes well beyond the sound advice to avoid heavy drinking." It followed a June post for aptly-named Vice, which leads off with the assertion that "everyone knows alcohol is poison. That's part of why it's fun." Both set aside "no safe level" pleas for more moderate approaches. And while Vice concludes that "no matter what the data says, some of us will still think it's worth it," The Atlantic picks up the poison theme in its closing lines, determining that drinking is "probably not the key to longevity. But it's not arsenic, either."