Beer Marketer's Insights
Beer shipments are going thru an especially tuff time midway thru 2023. Shockingly, total beer biz shipments down 3.7 mil bbls, 4.7% in available yr-to-date data, including taxpaid and imports thru May (using updated govt data from TTB). That follows a record 7.8-mil-bbl, 3.7% drop in 2022. So industry shipments down 11.5 mil bbls (over 150 mil cases) in 17 months. If US beer biz ends 2023 down over 3%, could finish under 200 mil bbls. For the first time since the 90s.
Fla Gov (and Presidential candidate) Ron DeSantis told Fox News he will ask the State's Board of Administrators to investigate if AB's mktg decision involving transgender influencer Dylan Mulvaney negatively impacted Fla's pension funds. "We will be launching an inquiry about Bud Light and InBev," said DeSantis. "This could potentially lead to a derivative lawsuit filed on behalf of the shareholders of the Florida Pension Fund." Cfo of board, Jimmy Patronis piled on with statement in support of DeSantis: "The downfall of Bud Light will serve as a lesson to businesses on why it's important to avoid politics. It's a narrative about neglecting customers, and the consequence of that lack of accountability is a financial hemorrhage." On CNN, critics said DeSantis' actions "signaled Republicans are not done using the company [AB] as a punching bag as they seek to gain favor with the party's base." Noted that "many in the GOP" continue to use the Bud Light/Mulvaney issue "as political fodder."
About 1.5 wks ahead of Molson Coors' Q2 earnings, co's stock passed a pair of positive milestones. Price per share topped $70, first time that's happened in over 5 yrs. Its market cap also surpassed $15 bil as stock gained another ~5% this wk, according to Yahoo Finance. TAP stock now up nearly 43% YTD, tho still well below peak of over $100 per share in 2016.
Less than 2 wks after hearing arguments from STZ and Olympic Eagle, 9th Circuit Ct of Appeals ruled in Constellation's favor, reversing preliminary injunction and opening door for co to go ahead and terminate Olympic without cause and move brands to Columbia. "We vacate the preliminary injunction on the ground that Plaintiff has not shown a likelihood of success on the merits, and we remand," judges wrote. Indeed, judges were clearly leaning in favor of STZ's arguments thruout hearing on Jul 10.
Throwback Thursday
This week in 1970, INSIGHTS reported Philip Morris purchased the 47% of Miller Brewing it didn't already own for $97 mil. The previous year, Philip Morris paid out $130 mil for controlling interest in brewer. There was no reason provided for PM's decision to take over entire biz other than that PM thought Miller was a good investment. PM held onto Miller til 2002 when it was acquired by SAB for $5.6 bil in stock and assumed debt.
Morgan Stanley upgraded ABI to "overweight" Thursday. "We see a very favourable risk reward underpinned by an attractive valuation," wrote analyst Sarah Simon (as quoted in Seeking Alpha). "While investors are currently sitting on the sidelines, waiting for the company to fully quantify the impact of the Bud Light situation, we see upcoming H1 results as likely timing for such clarification," she added. ABI stock up just slightly today, tho down 2% YTD. The upgrade is one of several more favorable developments for ABI so far this week, including better 1-week #s, especially on Ultra (for week after Jul 4) and CCRB ruling that Dylan Mulvaney post didn't violate BI code.
Elliott Mgt "One of Most Feared Activists" Sez WSJ as It Takes Stake, Seeks Shakeup at Drugmaker
Day after Elliott Mgt and Constellation announced comparatively amicable agreement amidst 1 yr standstill, Elliott Mgt took more aggressive tack with drugmaker Catalent. Elliott "has built a significant stake" and "is pushing for a shakeup" on board of Catalant and is talking to potential directors "about joining a slate of nominees to run in a proxy contest," said Wall Street Journal.
Out-of-stocks are showing signs of increasing at retail, according to wide-ranging Bev Bytes survey of c-store retailers from Goldman Sachs' Bonnie Herzog. (Survey represents "~36,000 retail locations or ~24% of the c-store channel.") Now 30% of respondents say out-of-stock situation was "bad" in Q2 vs just 13% in Q1, "the most severe level we've seen since" Apr 2022 survey, Bonnie wrote. Tho 70% say there were just "a few" out-of-stocks. MC out-of-stocks seem to be driving the increase in "bad" out-of-stock situations as 1/3 of respondents now say Molson Coors out-of-stocks are "bad" vs no respondents saying so in Q1 survey. STZ out-of-stock pressures "improved" for the qtr while Mark Anthony, SAM and HEIN "broadly worsened." Just 11% say AB out-of-stocks are "bad" and a little over half of respondents say there are "a few" out-of-stocks amid Bud Light struggles. Half of retailers expect their out-of-stock issues to resolve by end of Q3, 38% by end of 2023 and 13% by end of July.
It's long been an anomaly in bevs: despite having access to deep roster of consumer-beloved coffee brands - from Keurig and Green Mountain to Peet's and Stumptown - Keurig Dr Pepper essentially had no game in growing RTD segment. That ends now with announcement that soft drink giant has inked investment and distribution alliance with La Colombe, the Philadelphia roaster whose national distribution alliance with Molson Coors for its canned lattes was unwound last year.
Element Nutritional Sciences hasn't harbored much doubt about the efficacy of its Rejuvenate Muscle Activator and Promino drink mixes. Their flavor? There's room for improvement, so Burlington, Ontario-based co once again has recruited the flavor house operated by Muscle Milk developers the Pickett family to redo the flavors and, as crucially, prep RTD entry for Propino muscle recovery supplement. Per announcement today, the Picketts' operation, Flavor Insights, already played key role alongside Nielsen and TasteMaker in prepping Rejuvenate RTDs that hit retail this fall.