“Top management in Amsterdam is not quite panicked,” wrote Biz Week in long feature, “but there’s definitely a sense of urgency seeping into the ranks.”  Why?  “Beer consumption is declining in the US and Europe” which account for 2/3 of Heineken’s profits (US is 25%), plus strong Euro “crimping” US earnings.  And so total Heineken profits expected about flat in 03.  Biz Week talked of “tough tactics to stir the troops out of complacency,” including a video that showed a young Italian man saying “I hate beer.” Message: “Heineken needs to win over consumers who have not yet developed a strong loyalty to a particular beverage.”  Heineken’s US drinker has gotten younger in recent yrs.  Avg age now in early 30s, down from 40 in mid-90s.  Hispanics are 25% of Heineken US volume, wrote Biz Week.

Scanty SABMiller statement for qtr ending Jun 30 said total EPS (earnings per share) showed a “satisfactory increase.”  (London exchange, where SABMiller traded, requires little info on quarterly basis.)  Tho Miller profitability “lower,” it’s “in line” with expectations, said SABMiller ceo Graham Mackay.  Graham also pointed to “strong results” in Europe,  while Africa and Asia “continue to perform well.”  In South Africa, beer up 3.8%, taking share from spirits.  SABMiller stock up more than 15% since Mar 03 low, but still almost 30% below pre-Miller deal peak.  

In sign of the times, Japanese tea giant Ito En, after long relying on square-footprint plastic bottles, has been adding cans to the mix (BBI, Jan 16). Now the effort is getting slight refinement, in interest of, well - refinement. Starting with its core Oi Ocha green tea entry, it's segueing from conventional 11.5-oz squat cans to 10.6-oz slim cans, with rest of range to migrate to format over time. Also an advantage is new cans' smaller footprint. Pricing will stay the same . . . Grown Up Soda (GuS) lately has made headway into pair of promising foodservice accounts. First, it placed 4 flavors nationally into Barnes & Noble bookstore chain, which has been restaging under ceo James Daunt and lists 593 stores as being in operation these days. And it's gotten foothold in Caffe Nero chain, entering UK café operator's Boston-area stores as that operator plans push into US, serving as suitable accompaniment to robust sandwich offerings there, said cofounder Steve Hersh. Recall that GuS has often thrived in foodservice settings where it's among narrow selection set, notably within Eataly chain prior to pandemic.

There was a time, not many years ago, that Brooklyn Food & Beverage booth at trade shows like Expo West and Fancy Food was a hodgepodge of warring packaging formats, graphic styles and palate experiences as it hedged its reliance on original brand, Bruce Cost Ginger Ale, with a riot of innovation, much of it tilting toward Asian roots of Taiwanese owners. After cofounder Bruce Cost, the well-known restaurant operator, departed over issues that included his refusal to countenance the flavor tradeoffs that launching a zero-sugar extension would entail, the co launched a copycat Brooklyn Crafted line (get it? BC, just like Bruce Cost) that filled zero-sugar void, and cluster of other lines that came and went from year to year. Lately, tho, that's considerably settled out under former line cook at some of NY's more prestigious restaurants, Alton But, who joined co in sales/ops role but for 3 years has run with new brand called Moshi Sparkling Yuzu, which has built bev line around fragrant but "bumpy little fruit," as co likes to describe it. At Fancy Food winter show, the original line was augmented with sparkling oolong and matcha lines, also to favorable retailer reception (BBI, Jan 18). All 3 boast elegant label graphics that are intended to be simple but premium-looking. So now, as Fancy Food booth revealed this week, co is running with concept. It's expanded each line to 4 flavors that explore characteristic Asian ingredients and go out at SRP of $3.29 per 12-oz longneck bottle. Core Sparkling Yuzu line now includes Original, White Peach, Red Shiso & Apple and Unsweetened entries, while Sparkling Oolong Tea line offers Honey, Passion Fruit, Lychee and White Grape flavors and Sparkling Uji Matcha line offers Original, White Strawberry, Ginger and Coconut flavors.

A major Coke bottler in US is about to change hands, tho it seems it will be business as usual after transaction closes. Hong Kong-based Swire Pacific Ltd said today it plans to sell Swire Coca-Cola USA for US$2.9 bil to conglomerate's controlling shareholder, John Swire & Sons Ltd. A sale would be in line with Swire Pacific's focus on businesses in Greater China area and Southeastern Asia, per filing cited by Reuters, and would help it fund long-term investments in both core divisions and new growth areas while shoring up its balance sheet. As part of deal, Swire Pacific's Swire Coca-Cola Ltd unit will provide mgmt services to Swire USA for 13-year term for annual fee of at least US$14.9 mil. Crucially, its franchisor Coca-Cola "has authorized Swire Coca-Cola USA to retain all of its rights under its existing bottling agreements after the change in ownership," per Swire's announcement. Swire's franchise territory in US spans 13 states. Shareholders still need to approve transaction.

With Monster Beverage sidelined while Federal Trade Commission examines market concentration risks of its bid for Bang Energy marketer VPX, it seems that only qualifying bid in hands of bankruptcy court is one orchestrated by former Red Bull North America chief Gary Smith. Word is that bid from another ex-Red Buller, Robert Nistico of Splash Beverage, didn't materialize by deadline early this week.

Ultra has highest repeat rates and 2d highest trial of any new beer and malternative brands over last couple of yrs, according to Morgan Stanley’s Bill Pecoriello.  “Even after 7 months on the market the brand is continuing to attract new users and gain repeat purchases,” according to Houshold panel Trial and Repeat data conducted by IRI.  39% of Ultra purchasers have bought it again and that number has steadily climbed.  That’s almost double repeat rates of Skyy Blue and Bacardi Silver.  Bill believes Ultra “less likely” to follow pattern of  “vicious ‘sophomore slump.’”  Why?  “Relevance and uniqueness of the no-carb benefit,” plus “broad demographic appeal,” and “’real beer’ credentials.”  Finally, beer “not as variety driven” as soft drinks, where 1/3 of biz comes from people "continually trying new beverages."

After raising more than $1 mil in its first go-round, Ohio’s Saucy Brew Works is launching its 2nd crowdfunding initiative, this time with $3.97 mil target and purported valuation of $113 mil. Aiming to raise capital for its production facility in planning as well as new brewpub in Charlotte and additional brewpub at undetermined (“Investor Choice”) location, campaign was posted on Start Engine earlier this wk and picked up by Cleveland.com. Recall, in just last yr or so, Saucy opened taproom/coffeehouse at Pinecrest in Orange Village, OH, along with brewpubs in Columbus and Detroit. It also set wheels in motion for 26K sq-ft location in Independence, OH featuring 11K sq-ft production facility with goal of making Saucy a more than 50K-bbl per yr brewery (see Jan 21 issue). Once that’s operational – not expected ’til back half of 2022 – it’ll serve as Saucy’s official HQ and “boast enough production space to compete within the US Top 50 Breweries based on BBL volume,” crowdfunding page declares. But Saucy produced just 5,500 bbls last yr, flat vs 2019, according to BA stats, despite previously stated expectation for 80% growth to ~9K bbls.

Still, Saucy claims to be IRI’s “fastest growing [beer] brand” over latest 52 wks in home mkt of Cleveland and “fourth-fastest growing brand over the last year” in state of Ohio. And with prospect of additional funds, co’s eyeing “second phase of geographical expansion” including its first efforts outside the Midwest. Saucy plans to begin construction on Charlotte brewpub later this yr and has a few options “on the table” for TBD location, such as Nashville, Tampa, Miami and Park City. Co’s also lookin’ to build out “fleet of food and beer trucks” in local mkts. Plus it’s got “Saucy Coffee” biz in the mix as well. Co’s coffee products now sold at 3 of Saucy’s locations, with plans to expand “into new regions and introduce our signature line of packaged Whole Bean Coffee.” So co’s lookin’ to do (more than) a little bit of everything. But with goal of becoming “the next craft beer typhoon,” as Saucy’s investor page puts it, “we have our core business model set, and we believe we are on a trajectory of sustainable growth.”

This time, BrewDog didn’t orchestrate its own shitstorm. But it did create it. On Wednesday, an open letter signed by a group of about 60 former BrewDog employees laid into the iconoclastic Scottish brewer, claiming its founders and leadership “built” the co “on a cult of personality.” “Growth, at all costs, has always been perceived as the number one focus for the company, and the fuel you have used to achieve it is controversy,” the group calling itself Punks with Purpose wrote. 

Founded in Scotland in 2007, BrewDog quickly grew to become the top UK craft brewer. After establishing its US arm in Columbus, OH, it grew quickly here as well, producing about 4K bbls in its 1st yr here in 2017 and topping 62K bbls by 2020, according to Brewers Assn stats. It famously funded much of its growth thru series of “Equity for Punks” crowdfunding programs. It also sold a 22% stake to TSG private equity firm in 2017, valued at $124 mil then (TSG also bought out some existing shareholders for another $140 mil; see CBN vol 8, no 31). As stated by the former employees, BrewDog's "punk" persona brought plenty of controversy, including marketing stunts that backfired and critiques from industry bodies of unsafe alc bev mktg, general rule-breaking and lack of sensitivity.

Initially shared via Twitter, but now available on its own site, the letter charges that “the true culture of BrewDog is, and seemingly always has been, fear.” After its first release, the number of former employees who signed on to the letter almost doubled by this morning, plus 60 who wish to remain anonymous and another 18 current employees largely agreeing with the letter. A handful say they worked for the co for 5+ years. The group is working to update the list to include over 250 signatures total, it wrote elsewhere on the site. 

Apologies (and Skepticism)  BrewDog founder/CEO James Watt apologized in a statement, also first shared on Twitter and which remains the co’s primary media response. “At BrewDog, we are focussed on building the best business we can,” making the letter “so upsetting, but so important,” he wrote. “Our focus now is not on contradicting or contesting the details of that letter, but to listen, learn and act.” Tho a rebuttal letter — allegedly penned by current BrewDog HR team formally seeking co-signers among existing staff — circulated on social media, BrewDog scrapped that response in favor of the “contrite” apology from James, The Guardian wrote. 

The co plans to “reach out to our entire team, past and present to learn more. But most of all, right now, we are sorry,” according to James’ statement. Co-founder Martin Dickie apologized separately on Instagram today, hoping “to engage” with any former or current employee of “any industry body / group who are keen to make sure the industry as a whole is pushing for the same ideals of inclusion, equity and safety that we hold so dear.” Tho the Punks with Purpose group is encouraged by the apologies and interest in engagement, it promised to stick around and seek “evidence of the change,” but remains “skeptical,” since “many of us worked for you long enough to have heard you apologise and promise change several times already.”

Reckoning Evolves, Press Hits, Investor Relations  BrewDog’s former employees specifically cite as inspiration the current, now very much global reckoning with patterns of harm and cultures of toxicity within craft beer, kicked off a month ago. So the outcry against BrewDog and any response by the co is tied to that movement and this tumultuous moment. Will employees of other large beer cos stateside or elsewhere follow this playbook? And notably, because of BrewDog’s scale in the UK, the story lit up the press there and even hit some mainstream US-focused biz news sites. 

However, the co’s antics and anti-establishment attitude didn’t exactly earn it too many friends over the years, especially in establishment biz press or marketing world. “It has a terrible reputation in the ad industry, and has faced accusations of idea theft, and shoddy behaviour generally,” a London mktg exec told The Drum, adding that “it's also a phenomenally successful brand and business, and a genuinely incredible success story for British brewing.” The BBC’s Scottish biz and economy analyst concluded that “repairing the damage will take more nuance than Brewdog usually deploys.” 

A columnist for Business Daily Magazine wondered if this could be “an opportunity just to sell up and call it a day,” thinking co-founder James could “at least walk away a very rich man,” given the co’s value and that his leadership has come under so much fire. Early comments above suggest that may not be in the cards. But could TSG stake come into play? And ultimately, will consumers care? At least a small group already does, early surveys cited by The Drum suggest. But “change (if it comes) will be motivated from internal forces within the industry rather than a sudden change in the public’s perception of a brand that has always promoted its own misbehaviour,” it concluded.