Beer Marketer's Insights
As if AB needed another media distraction as it takes steps to get Bud Light sales back on track, Billy Busch has expanded beyond his MTV reality show "Busch Family: Brewed" to write a tell all book, Daily Mail reported. Headlines how "the scandalous history of the iconic Busch family," will be explored, adding, "How centuries of tragedies, billions of dollars and an industry-shaking hostile takeover led to the epic fall of the Kings of Beer." Article in DM already breaks down quite a bit of the good, the bad and the ugly in family history, including excerpts of Billy's thoughts about his father Gussie, takeover by older brother August Busch III and fate of AB under August Busch IV to Billy seeing everything family worked for "undone" by Dylan Mulvaney controversy.
Boston Beer appointed Diego Reynoso as cfo and treasurer, overseeing finance, treasury and IT starting Sep 5, co announced late yesterday. That "fills the vacancy created by the departure" of former cfo Frank Smalla in Apr, said SEC filing. Frank left for a KKR-backed PE firm. Diego comes from Tyson Foods, but before that Diego had relevant beer experience as cfo of Constellation Brands Beer Division 2017-2021 and also spent 12 yrs at Beam Suntory, overlapping current Constellation Brands ceo Bill Newlands. Diego "brings strong experience," wrote Bernstein's Nadine Sarwat, but she wanted to know: "What will be his vision for margin expansion?" While Boston net sales up a "whopping" 120% in last 6 yrs, gross and EBIT margins "contracted ~11% pts on the back of a production shift to third parties and supply chain inefficiencies." Result: free cash flow in 2022 only ~16% higher than 2015, she added. Boston has "elusive" goal of getting back to 50% gross margin. "Will Diego reiterate" that "belief…. If so what are the steps to get there?" Boston stock up 1.6% today, tho still off this yr.
Distrib Individuality, Need for In-Market Support, "Disciplined Innovation" Turned Up by Tamarron
Wholesalers aren't all the same and don't all have the same needs or wants from their supplier partners, results of annual Brewer Partnership Compass survey by Tamarron Consulting show. Responses to 47 questions for each of 8 top suppliers, plus overall "Relationship" and "Partnership" grades turn into rankings comparing suppliers. But requests for individualized attention comes thru loud and clear in Tamarron's analysis of responses to a more open-ended question, asking distribs how a supplier can "break through the clutter & become a preferred partner," co wrote releasing this yr's results yesterday.
Combo of FMBs, hard seltzers, plus wine & spirits-based RTDs have changed the makeup of the beer and alc bev industry, but their collective growth is leveling out in scans this yr as hard seltzer drops wipe out most of FMB and RTD spirits gains. As cos increasingly jump across alc bev segments to enter the "beyond beer" RTD space, this article will take a closer look at how beer, wine & spirits RTDs sit within a broader category that includes wine & spirits RTDs. This broader category grew 3% by $$ in Nielsen xAOC + liquor plus convenience data shared by Bump Williams Consulting, including beer/FMB/seltzer/cider $$ up 2%, spirits RTD $$ up 52%, and wine RTD $$ up 4%.
Constellation Brands Flying High in July; $$ Up Over 20% First 2 Weeks, Volume Up High Teens
Constellation Brands volume took off and hit another gear in first 2 weeks of July. Volume up 18.8% in week thru Jul 9 and +16.9% in week thru Jul 16 in Circana multi-outlet + convenience. And $$ sales up 22.6% and 21.1% those same two weeks. The Modelo family of brands $$ sales up 30% in latest week and 25.6% for 4 weeks. Total Constellation volume now up double digits in Circana data for last 3 mos, even while total beer biz down 2%.
FLASH! High Brew Coffee Lands at Beliv Bev Incubation Unit Aligned with Central American Bottling
In same week where Keurig Dr Pepper made latest attempt to develop a solid play in RTD coffee via La Colombe alliance, an earlier such partner of KDP has found an exit. High Brew Coffee, an early shelf-stable play in cold-brew segment when it launched a decade ago, has sold majority stake to Grupo Mariposa, umbrella group that includes Central American Bottling Corp whose Beliv unit is taking on a role as incubator within wide range of bev segments. Deal for undisclosed terms ensconces High Brew in portfolio that includes self-developed entries like Oca and acquired brands like Big Easy Kombucha and its Mighty Pop extension assembled under leadership of Argentinian entrepreneur Carlos Sluman. Deal brokered by Whipstitch Group had been in development for some time, tho our contacts within Beliv had declined to confirm talks in recent months. It apparently closed on Jul 3. High Brew, of course, was created by Sweet Leaf Tea cofounder David Smith after his successful exit of that brand to Nestle. Tho it built extensive DSD network and won alliance with KDP, brand never quite ignited and alliance was amicably dissolved, leaving High Brew to forge individual path mainly via beer houses.
Richard "Dick" Carlson passed on July 4th at the age of 80. He got his start in beer biz working alongside his father for 8 yrs at Hamm Brewery Sales and then in 1974 he founded Carlson Distributing Company. At time, his business had just 4 trucks and only handled Olympia beer. Carlson now employs over 200, covers 89% of Utah footprint to deliver Miller, Coors, Corona, Guinness, Modelo and other brands to 98% of population in the state. In 2019, Carlson over 5 mil cases, following an acquisition.
Sales velocity was up 4% in latest week thru Jul 15, per BeverageTrak data from CGA by NIQ's On Premise Impact Report. That growth keeps on premise sales "slightly above" trends in 2022. In 5 key states tracked, on premise sales velocity doing best in Fla (+4%) and NY (+3%) mkts for latest wk vs yr ago. On premise sales up 1% in Calif while just flat in Tex vs yr ago and down 6% in IL.
Elliott is "a very successful and astute activist investor," wrote CNBC columnist Ken Squire, founder and prexy of 13 Monitor, "an institutional research service on shareholder activism" who also has activist fund. Elliott "often watches companies for many years before investing." Elliott has "not disclosed its stake" in Constellation, but "based on its history, we would expect it to be in excess of $1 billion."
Coca-Cola has decided to exercise its right of first refusal on Monster-acquired Bang Energy, which now is almost certain to move thru Coke bottling system rather than network of beer houses that built brand and to which Bang returned after dissolution of its distribution alliance with PepsiCo. The alternative, had KO decided its energy portfolio is robust enough, would have been for MNST to take acquired brand to alternative system of beer houses thru which it's moving its Beast Unleashed and other non-energy brands. "Yes, we have consented to Bang coming through our system in the US and around the world," KO rep told INSIGHTS this morning in response to query we made late last week, tho brand still needs to forge deals and marketing plans with individual bottlers. So Bang will join array of brands that includes Monster, Reign, NOS, Full Throttle, Burn and others. MNST exec confirmed Coke's intention to INSIGHTS, saying it would shortly notify beer houses of outcome. This will be disappointing news to beer houses that were hoping to get a shot to rebuild Bang, many of whom had previously lost Celsius and C4 and have big void to fill in growing, lucrative segment. (This article first appeared in Beverage Business INSIGHTS.)