Beer Marketer's Insights

Beer Marketer's Insights

Voices lifting up the interest of public health in comments to TTB over the last few months frequently veered away from the topic at hand, federal trade practice rules, to opine on issues more familiar to them. Many lifted up and defended the three-tier system, and some shared big concerns with digital alcohol markets. Others tried to rush TTB into its coming rulemakings on alc bev labeling. Dozens of individuals questioned the marketing of "spiked soft drinks," claiming underage targets, while various consumer advocacy groups urged specific rules barring slotting fees for such bevs. More focused comments came from the American Public Health Assn's Alcohol, Tobacco and Other Drug section (APHA ATOD), which filed a detailed exploration of potential links between trade practice regs and public health.

It wasn't exactly a huge mystery, but SunOpta confirmed today that major customer for its new plant in Midlothian, Texas, is BellRing Brands' Premier Protein brand, which like rivals has been in desperate scramble to find more copacking capacity to keep up with category growth. New 330-ml (11-oz) line that puts SunOpta into nutritional bev category onboarded Premier Protein in May, co said today. As reported, that new plant has capability to produce SunOpta's entire suite of teas, broths and plant-based milk and creamers, but the 330-ml line represents entirely new endeavor for Minneapolis-based co as it aims to move higher up the value chain of bev production.

Bud Light meltdown may be at least in part to blame for closure of pair of Ardagh Group glass bottle plants. After Luxembourg-based co said it's closing plants in Wilson, NC, and Ruston, La, due to decreased market demand, WRAL-TV station in Raleigh obtained internal memo citing "slow sales with Anheuser InBev," referring to Bud Light marketer Anheuser-Busch InBev, which endured 28% skid in sales of best-selling beer brand in week ended Jun 24, per NielsenIQ data reported by Bump Williams Consulting. The plants are due to close by mid-month, resulting in 645 layoffs, as effects of Dylan Mulvaney controversy continue to ripple out. Ardagh insisted the closures won't affect its reliability as supplier, telling Ruston Leader newspaper that "our multiyear performance optimization program, involving targeted investments in enhanced capacity and ongoing cost optimization, underpins our ability to continue to provide existing and prospective customers with high quality, American-made sustainable glass packaging."

Marketers on Amazon platform are hoping to woo inflation-strapped consumers with deeper discounts than in past during 48-hr Amazon Prime shopping window that started today, and bev sector seems happy to join the fray. One Prime Day tracker cited by Reuters, CFRA Research analyst Arun Sundaram, said US Prime Day discounts this year are mostly deeper than in prior years. Bank of America chronicled markdowns of 60% off Gap clothing, 50% off Sony headphones and 40% off Peloton exercise bikes. "Amazon Prime members can also save up to 40% on items such as Sherpani bags and Zoa Energy drinks by checking out using 'Buy with Prime' directly from Amazon's third-party merchants," Reuters advised. This is all coming off July 4 weekend in which our perusals of grocery flyers suggested they were goin' deeper and dirtier on discounts this year (BBI, Jun 30).

A year ago LifeAid Beverage made big bet on energy category with 4-flavor extension under its FitAid sports recovery line that contained 200 mg of green-tea-based caffeine along with BCAAs, turmeric, electrolytes, vitamins, quercetin and CoQ10. Tho entering a crowded segment, founders Aaron Hinde and Orion Melehan took comfort from the fact that they had garnered strong presence in endemic channels like gyms (remember, they started out targeting CrossFit boxes) and are a rare player in the space that also offers recovery-oriented offerings. Indeed, that core FitAid Sports Recovery line has just been augmented with limited-time Hawaiian Nectar flavor, "vacation for your tastebuds" that melds passion fruit, orange and guava and is clearly meant to ride the summer-lifestyle vibe popularized by entries like Celsius Oasis Vibe. But Santa Cruz-based LifeAid hasn't abandoned its other functions like mildly caffeinated FocusAid (100 mg), vitamin-C-rich ImmunityAid and weekend-recovery-oriented PartyAid. Still, innovation these days is keyed more to flavors than added usage occasions, with another LTO due in Sep, Hinde noted. LTOs that are embraced by consumers have good chance to make it into permanent set.

Average price increases remained up double-digits in CSDs, energy drinks, sports drinks and RTD teas, while up high-single in sparkling waters for 4 wks thru Jul 1 in NielsenIQ data reported by Goldman Sachs.

After around 3 dozen workers at the Leinenkugel's brewery in Chippewa Falls, WI voted to reject their last offer from parent co Molson Coors, members of Teamsters Local 662 initiated a strike yesterday, union organizers announced. "Meager wage increases" offered by MC "did not come close to giving workers what they deserve," org wrote. "We are sick of the corporate greed and want a fair and equitable pay increase," a maintenance technician at the brewery commented. MC chief communications and corporate affairs officer Adam Collins commented: "we've made a competitive offer that exceeds local-market rates for similar unionized roles, and despite the circumstances, we're hopeful for a resolution that benefits everyone.

Frequent target of critique by industry incumbents, PepsiCo's alc bev distrib arm Blue Cloud filed brief comment with TTB over the weekend as well. Co positions itself as a "new entrant" that "has experienced anti-competitive behavior at the state level," quick note from gm/veep Emiliano Di Vincenzo reads. He notes "numerous instances of attempts to stifle competition and protect existing businesses, whether that comes in the form of targeted legislation directly intended to prevent certain entities from becoming licensees or unsubstantiated allegations of trade practice violations and misinformation being used to attempt to heighten enforcement against new market entrants." In sum, Emiliano advocates for no new trade practice regs from TTB, finding that they would only "pose additional barriers to marketplace entrants." Ironically, that stance aligns the co most closely with comments from Beer Institute, which recall repeatedly insisted no new regs were necessary, but whose largest member AB has separately raised alarm about the encroachment of NA bev cos.

Effusive comments from NBWA genl counsel/exec veep Paul Pisano took the cake for longest response to TTB's wide-ranging questions on fed trade practice rules, clocking it at just over 37 pgs. And tho org weighs in on both broad and 16 specific questions posed by TTB, often in great detail, its overarching point can be summed up quickly: the status quo works well and any revisions should be focused on "preserving wholesaler independence." To that end, Paul's tome emphasizes and reemphasizes boilerplate, raison d'etre issues for NBWA as it seeks tighter reins on major suppliers and retailers, better oversight of small producers and lots more clarity in not only TTB regs, but it's investigative practices, too.

Wholesaler inventories collectively hit historical highs across beer, wine and spirits in May, according to US Census Bureau data. May inventory/sales ratio hit 1.71x, vs Apr 1.68x, Mar 1.66x and well above the 3-yr avg of 1.35x, Jefferies analysts noted. If shipments to retailers (STRs) improve, excess distrib inventory "will be digested," report adds. But "if growth stalls, as per weaker May trends, there is a risk that shipments underperform depletions for a period."