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Hail to High End from AB's Andy Goeler and STZ's Marty Birkel; But Beware Disruption

The high end is still where growth's at in beer and indeed alc bevs as talks by AB's High End mktg veep Andy Goeler and Constellation Brands wine prexy Marty Birkel underscored at North Carolina beer and wine distribs meeting this week. AB has bought 8 craft brewers, selling somewhere between 800K and 1 mil bbls (Andy used both #s, could be 2 different yrs). AB's High End Unit has 200 employees, about 150 salespeople and all are Cicerone trained, said Andy, "spreading the gospel of beer." This is "amazing time for beer," Andy said, with "new vibrancy" based on beer's "unmatched flavor potential," that is both "more versatile than wine" and "complex as liquor." Andy pointed to recent bottle of Goose Island's Madame Rose on sale at Chi restaurant the Publican for $55, like a fine wine. Beer biz has to "elevate the prestige of beer" and "continue building brands."

Andy's talk also had somewhat surprising focus on disruption. Andy detailed disruptions wrought by Uber on taxis, cutting value of NYC medallions in half in 5 yrs, and Air B n B on hotels. Uber has mkt cap of $50 bil, Air B'n'B $25 bil. AB clearly paying very close attention to all this. "We have to watch disruption," Andy said. "We must collaborate and guide innovative retailers" and "make sure we're partnering with people like this" so "we can influence and guide." Andy pointed to cos like Drizly, Fresh Direct and inevitably Amazon. "We must spearhead development of disruptive technology" and "continue to take chances on new service ideas." Why? Because "very scary prospects if we fail to deliver innovations to drinkers."

Meanwhile, Constellation sells 66 mil cases of wine with around 80 brands, said Constellation Brands wine prexy Marty Birkel (recall Marty spent many yrs on beer side as well), very focused on building a half dozen high end brands. Whereas 5 yrs ago "center of gravity" in wine was $8-12 bottles, now it's $15-20 and will eventually move to $25-30, thought Marty. Wine consumers are moving to "stronger bolder flavors," which he compared to beer drinkers and IPAs. And wine has its own version of "rotator nation," it's called "wine by the glass." That's all "consumer led," said Marty; trick is to continue to build strong brands, "balanced with the fragmentation." Of 75 mil millennials, "roughly 30%" drink across all 3 categories and that's where most of the volume is. Only 10% drink wine only. Just as brewers have often said in recent yrs, Marty noted that drinkers drink based on occasion. "How do we get more of their occasions," mused Marty? Constellation also looking at bundling brands. Marty showed pictures of fall tailgate program with Kroger's bundling Corona and Clos Du Bois. The grocery market basket "increases pretty significantly." Finally, Marty showed North Carolina stats, where Constellation getting 59% of growth in beer last 12 weeks and 34.9% of growth in wine.  

Publishing Info

  • Year: 2016
  • Volume: 47
  • Issue #: 12
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