📰 Beverage: May 2023 Interesting Reads
The Plot to Steal the Other Secret Inside a Can of Coca-Cola. AB InBev looks for 'stabilization' in Bud Light. Four Tequila Brands Drive Half of the Category’s On-Premise Sales.
Interesting Stories:
🥃 Bacardi Nears Deal To Buy Ilegal Mezcal [BevNet]
Bacardi is close to a ~$200M deal to purchase Ilegal Mezcal, according to reporting in Bloomberg Finance. The group bought an unspecified minority stake in the major mezcal brand in 2017, granting it national distribution.
L Catterton is also engaging in conversations to purchase the brand, which also also raised from VMG
The possible deal signals the continued rise of agave spirits. With tequila driving spirits sales, other major spirit groups have brought mezcal and sotol brands into their portfolios. But Ilegal would be Bacardi’s first mezcal, joining tequilas Patrón, Cazadores and Corzo
In 2017, Pernod Ricard purchased a majority stake in Del Maguey Mezcal for an undisclosed sum, and Constellation brands acquired a minority stake in Dos Hombres Mezcal in 2021
The mezcal market is currently valued at $338M and is projected to reach $2.1B by 2030, according to Straits Research
🥃 Mark Anthony Brands ‘Bullish’ on Flavor as Bev-Alc’s Present and Future Growth Driver [BrewBound]
In 2022, the flavor category was around 400M cases and $17B in retail sales, with 80% of the volume sales coming from hard seltzers and FMBs and 10% from spirits-based RTDs and 10% from ciders and cheladas
The fourth category is expected to keep growing with a ~6% CAGR through 2026, pushing to 500M cases and $30B in value. By comparison, traditional beer, wine and spirits are expected to grow by ~1% during the same period
Beyond growth, flavor is first in: attracting new consumers to alcoholic beverages; household penetration gains; driving innovation sales; and consumer choice
🥃 Amber Beverage Group (ABG) Net Sales grow 17.9% in 2022, driven by its Tequila and Irish whiskey brands. [The Spirits Business]
Luxembourg-based ABG reported sales of €365.8M ($390.8M) for 2022 and EBITDA of €42.9m ($45.8M).
The group highlighted “strong growth” for its agave spirits portfolio, which includes Rooster Rojo Tequila and Kah Tequila
Among the challenges highlighted by ABG were an increase in prices for raw materials and energy, the availability of materials, the need to restructure supply chains to meet production plans, and the need to review sales prices
🥃 J.M. Smucker Company to launch liquid coffee concentrate [Food Dive]
The liquid concentrate style will likely spread to Smucker’s other coffee brands (Folgers, Cafe Bustelo) in the near future. [note: this reminded me of Cometeer’s success so far]
Coffee’s fourth wave hasn’t just brought new life to liquid coffee extracts. It’s also reinvigorated instant coffee grounds
“Younger consumers want something fast and don’t want to have to worry about brewing, [so] instant is starting to come back into the portfolio” — Joe Stanziano, SVP and GM of Coffee
Heywell and Foxtrot Market Launch Limited-Edition Cherry Limeade Flavor in Time for Summer [BevNet]
As two Chicago-based startups, the relationship between heywell and Foxtrot began when heywell founders Ashley Selman and Britt Dougherty worked from a Foxtrot market as they developed heywell, and continued on as Foxtrot became the brand’s first account.
heywell quickly became a fan favorite and best seller at Foxtrot, and together have introduced consumers to modern functional beverages and adaptogens
🥃 G.O.A.T Fuel, co-founded by NFL Hall of Famer Jerry Rice in 2020 raises $5M Seed. [Press Release]
The seed round was led in conjunction by Stage 1 Fund and Morrison Seger Venture Capital Partners, with past investors in the company including former 49ers owner Eddie DeBartolo Jr., serial entrepreneur and Minnesota Timberwolves owner Marc Lore, and co-founder Jerry Rice
G.O.A.T. Fuel is becoming a go-to energy drink for those looking for healthier, great-tasting energy, and is available online and at roughly 10,000 retail locations across the country including Publix, Target, Walmart, and HEB
Known for its cordyceps mushrooms—the first energy drink to tap into the powerhouse adaptogen—G.O.A.T. Fuel delivers sustained energy and is also powered by natural caffeine, green tea, BCAAs and 10 essential vitamins to improve recovery. It’s the official energy drink of the Los Angeles Lakers
🥃 The Newest Trend In Gin Is About What’s On The Bottle, Not In It [Forbes]
Recently, a new crop of gins have leaned into design, producing artfully-made bottles that are equally excellent on the palate.
Brad Pitt’s Gardener Gin, a London-style gin made in partnership with ex-Tanqueray distiller Tom Nichol
Portofino Gin captures coastal Italy in a square, turquoise-blue bottle painted with a candy-hued panorama of the Riviera coastline
Glendalough Gin just overhauled the branding of their Wicklow Mountains gin, making it into an arching bottle with a cork top
🥃 Founders Buy Dallas’ Four Corners Brewing Back from Constellation Brands [Dallas Innovates]
The deal comes after Constellation Brands—which bought Four Corners in 2018—made a strategic decision to concentrate on core beers: Modelo, Corona, and Pacifico.
According to The Dallas Morning News, Four Corners made 14,000 cases in 2013 and grew that number to 178,000 cases in 2018. That’s the year Constellation acquired the brewery
Four Corners topped out at 228,000 cases in 2020 and scaled back to 165,000 cases by the end of 2022
🥃 Appalachian Mountain Brewery purchases company back from Anheuser-Busch InBev [BrewBound]
AMB has been under A-B control since 2020, after the beer giant acquired the remaining stake in Craft Brew Alliance (CBA), bringing the company’s portfolio into A-B’s Brewers Collective
The sale of AMB comes at a point of transition for its craft division. In February, A-B ceased production at Platform Beer Co.’s Ohio breweries and shuttered its taprooms, while continuing to produce three of its IPAs for distribution
The same month, A-B laid off an unknown number of staff members at several of its craft breweries, including Karbach Brewing, Blue Point Brewing, Devils Backbone, Wicked Weed and Goose Island
Last year, AMB’s volume hovered between 11,000–12,000 barrels. The brewery’s 2023 output is expected to decline slightly as AMB looks for a contract brewing partner
🥃 InvestBev Establish Algoma Capital Lending Platform to Provide Financing to the Craft Spirits Industry [BevNET]
The firm will now have over $100M invested into raw distillate, and owns over 100,000 barrels of aging bourbon, whiskey and Irish whiskey across around the world
Its new sister company, Algoma Capital, provides credit to premium distillers, brand owners and suppliers seeking to finance barrel inventory on an asset-basis
The platform is a joint venture with Monroe Capital, a $16B credit shop in Chicago. Algoma sources, underwrites and vets the opportunity, and Monroe services the loan
🥃 Funky Buddha Brewery reacquires business from Constellation Brands. [Brewbound]
“As the industry evolves, trends throughout the craft beer segment have changed significantly and we have therefore made the strategic decision to bring our dedicated Craft & Specialty efforts to a close and transition our remaining brands so that we may focus on driving accelerated growth for our core portfolio, while fueling innovation in key spaces to develop a pipeline of strong brands for the long term,” a Constellation Brands spokesperson told Brewbound.
The brand was acquired by Constellation Brands in 2017 and has had a successful partnership that expanded the brand's distribution.
🥃 Alcohol Pickup & Delivery: Consumer Trends for 2023 [DoorDash]
According to Beverage Daily, alcohol ecommerce is poised to grow 66% by 2025. With that significant growth projection, restaurants and other retailers have an opportunity to capture a slice of the lucrative alcohol delivery market.
One in ten consumers in the U.S. has ordered alcohol delivery in the past six months
67% reporting that they order alcohol online as a treat
57% of orders are same-day delivery
Top types of alcohol ordered:
Flavored malt beverages (like White Claw) and hard cider
Whiskey, bourbon, scotch
RTD cocktails
Tequila
Vodka
Wine and champagne
Valued at $782 million in 2021, the RTD cocktails market is expected to grow at a compound annual growth rate of 13.4% from 2022 to 2030
Another category expanding its footprint is low-ABV and non-alcoholic beverages. According to Forbes Magazine, the booze-free drinks market surpassed $11 billion in 2022, driven by consumers who are sober-curious or looking for a healthier lifestyle
🥃 “Diddy Direct” Platform To Locate Combs Spirits [Vibe]
The platform helps retailers and consumers conveniently find, inquire, and purchase any of the bestselling spirits under his Combs Spirits portfolio (CÎROC Vodkas, CÎROC Spritz, CÎROC VS, DeLeón Tequila, and all variants). The new platform also connects customers with bars, nightclubs, and restaurants serving Combs Spirits.
Combs Global spans across the music, entertainment, media, fashion, and spirits industries with brands including Combs Spirits—Cîroc Vodka and DeLeón Tequil— Bad Boy Entertainment, Love Records, REVOLT MEDIA, Sean John, AQUAHydrate, Capital Preparatory Charter Schools, and The Sean Combs Foundation
🥃 Moth is UK’s fastest-growing RTD brand [The Spirits Business]
Canned cocktail brand Moth is the UK’s fastest-growing, premium ready-to-drink (RTD) brand in the UK, according to new data by Nielsen. Since launching in Waitrose stores in February 2021, the pre-mixed cocktail brand has increased its off-trade distribution by 161%, and can now be found in 2,775 supermarkets across the UK, including Sainsbury’s, Tesco, WH Smith and Morissons. The brand’s portfolio now includes eight cocktails made with award-winning spirit partners in fully recyclable cans.
🥃 Scotch Whisky Association (SWA) said spirits revenue from excise duty grew to £4.1B (US$5.1B) in 2022/23, up 40% since 2013/14 when its revenue was reported as £3.1bn (US$3.8B). [Scotch WHisky Association]
In the same 10-year period, from 2013/14 to 2022/23, beer saw revenue grow by 7% compared with spirits’ 40%, while cider revenue fell by 28%.
Spirits now account for 33% of all alcohol revenue, up from 29% in 2013/14
🥃 45% of Regional Craft Breweries Beyond Top 50 Increased Volume in 2022 [BrewBound]
Just under 45% of regional craft brewers beyond the top 50 increased production last year, significantly below the nearly 80% that increased production in 2021, as the craft segment continues to battle distribution volume declines.
Three regional breweries would have made the BA’s top 50 list if contract production was included: #13 Octopi Brewing and its offshoot Untitled Art (+38%, to a combined 220,000 barrels); # 28 Two Roads Brewing (-1%, to 104,025 barrels); and #39 Brew Hub (-3%, to 73,000 barrels)
Similarly, #46 Montucky Cold Snacks (+21%, to 63,250 barrels) was not included in the top 50 list as it produces its beer at Ninkasi Brewing and City Brewing
🥃 Blake Lively’s Betty Buzz Named Official Training Kit Sponsor of Rob McElhenney and Ryan Reynolds’ Wrexham AFC [Press Release]
Betty Buzz will also be taking over the naming rights of the hospitality suite used by the co-chairmen at the Racecourse Ground, set to be redesigned this June.
Additionally, Betty Buzz will be a traveling sponsor of the Wrexham AFC American tour – the first time in the club’s history that the first team squad will travel to the United States – offering sample opportunities in and around all stadium locations
The timing of this announcement marks the beginning of Betty Buzz’s international expansion. All 5 flavors of Betty Buzz are now available in all Whole Foods Market stores within the UK
🥃 The Plot to Steal the Other Secret Inside a Can of Coca-Cola [Bloomberg / @drakepbennett]
Shannon You had access to some of the most closely held information at the company: a set of detailed chemical recipes for the 2-micron-thick plastic liners inside the beverage cans Coke filled and sold. Developed at great expense, they were likely even more important than the theatrically guarded recipe for Coke’s namesake soft drink—that sugary, acidic brew would, without a liner, devour the metal of its can. The liner formulas didn’t actually belong to Coke but to the multinational paint and coatings companies that were its partners. You was responsible for evaluating the formulas; she was one of only two people at Coke with access to many of the specifics.
Most of the objects we touch, and many we don’t, have a coating
All of these are developed and sold by paint and coatings companies such as Akzo Nobel, Dow Chemical, PPG Industries and Sherwin-Williams.
🥃 AB InBev stock drops as Analysts look for 'stabilization' in Bud Light sales declines [Yahoo / Brooke DiPalma]
Shares of Bud Light parent company Anheuser-Busch InBev (BUD) are down 7.6% since the company reported earnings May 4 as the Dylan Mulvaney controversy continues to weigh on the beer giant's sales.
Bud Light sales during the week of May 6 declined 23.6% compared to the same time period last year
That's a slightly larger decline than the prior week ending April 29, which saw Bud Light sales down 23.4% year-over-year
Following the initial boycott, sales were down 6.9% for the week ending April 8
🥃 Four Tequila Brands Drive Half of the Category’s On-Premise Sales [Union]
According to recent OnPrem Insights data, Tequila commanded nearly one-third of all spirit sales at Union venues, racing ahead of Whiskey sales.
The four best-selling Tequila brands — Casamigos, Espolòn, Don Julio, and Patrón — appeared to be securely locked in, representing more than half of all Tequila sales at Union venues over the past year
Though Tequila is often ordered by brand name, House/Well Tequila drinks (the countless unspecified brands that are not listed by name on a menu) are still the most popular order amongst Union guests
When it comes to category affinity, Tequila’s dollar sales rival Vodka and Whiskey, but its adoption funnel rates by units still fall slightly below in comparison
🥃 Molson Coors Slaps Anti-‘Woke’ Critics—Like Joe Rogan And Ben Shapiro—And Defends Miller Lite Women’s History Ad [Forbes]
Miller Lite maker Molson Coors defended a months-old commercial featuring actress Ilana Glazer criticizing the sexist history of beer advertising after it came under fire from conservative commentators and social media users
Miller Coors has been enjoying a sales bump in the wake of Bud Light’s backlash over their campaign with Dylan Mulvaney
According to Beer Business Daily, sales volumes of Bud Light for the week ending May 13 fell by (28.4%)
🥃 Non-Alcoholic Space Was $11B Business in 2022 [Food Navigator]
According to Nielsen, the category is up 100% year-over-year
Brands like Ritual, which makes non-alcoholic whiskey, rum, tequila, and gin, were up 177% Y/Y. It’s currently being tested at 300 CVS locations.
🥃 Texas Beer Distributors Create 14,813 Jobs and $5 Billion in Economic Impact [NBWA]
The National Beer Wholesalers Association (NBWA) and the Beer Institute study found that the U.S. beer industry supports ~2.4 million local jobs and contributes more than $409 billion to the economy (1.6% of GDP). The beer industry also pays more than $132 billion in wages and $63.8 billion in taxes.
🥃 Spirit, Diageo World Class documentary airs [The Spirits Business]
A new feature documentary about Diageo’s World Class competition has aired on Amazon Prime, promising to ‘change the way we think about cocktails forever’.
The documentary offers insight from some of the industry’s leading trailblazers, including Lyaness owner Ryan Chetiyawardana; director of mixology at The Connaught Bar in London, Agostino Perrone; and World Class Global Bartender of the Year 2017, Kaitlyn Stewart
🥃 White Claw® Introduces New White Claw™ Premium Vodka, the World's First Triple Wave Filtered™ Vodka [Press Release]
White Claw Premium Vodka takes advantage of a change in regulations that for years made vodka tasteless by law in America. The Alcohol and Tobacco Tax and Trade Board (TTB) required the spirit to be "without distinctive character, aroma, taste, or color," so American vodka was engineered to be the same, neutral at best. In 2020, regulators changed the rules to allow for distinction.
Mark Anthony Brands launched the vodka for a few reasons—to take advantage and ownership of the seltzer being served with added vodka along with going head-to-head with older brands like Tito’s, Smirnoff and Absolut that dominate the category. In terms of stealing market share for its vodka range, Mark Anthony Brands has said that it has its eyes on Tito’s and admitted that was largely to do with making its premium vodkas “accessible” for next generation consumers.
White Claw has teamed up with the B&S Group (Dutch company B&S Group with a portfolio of duty free airport shops, trading under the names B&S Shop Fly, Capi and Crew Shop and B&S Shop Fly stores) for global travel retail (GTR).
🥃 Truly Reintroduces Vodka Soda [Press Release]
Boston Beer Company's Truly Hard Seltzer reintroduces its first spirits-based seltzer as Truly Vodka SodaTruly Vodka Soda combines six-times-distilled vodka, real fruit juice, and premium flavors.
Truly Vodka Soda is renamed from Truly Vodka Seltzer to reflect the classic bar call and stand out on shelves with bright packaging and an expanded range of can't-miss flavors
All Truly Vodka Soda flavors are 5% ABV with just 110 calories, two grams of sugar, and are naturally gluten-free
🥃 High Noon Tequila Seltzer Launches [Press Release]
High Noon Tequila Seltzer is made with real fruit juice, real blanco tequila, is 100 calories, gluten-free with no added sugar.
The High Noon Tequila Seltzer 8-Pack will contain eight 355ml cans for an MSRP of $21.99
"Tequila continues to gain momentum and is one of the fastest growing spirits in the market. We saw an opportunity to expand our offering and bring tequila fans a hard seltzer we know they'll love." — Britt West, SVP & General Manager, Spirit of Gallo
Sweetwater Brewing Launches RTD Mixed Cocktails [PR]
Vodka Soda Citrus and Vodka Soda Punch are available in 12-ounce cans at 105 calories each, featuring premium vodka and real citrus fruit juices.
Owl's Brew Launches New Flavors and Packs [BevNET]
Owl’s Brew’s line of Boozy Tea Cocktails will also include three flavors of Real Tea and Vodka (5% Alc/Vol). The Skinny Hibiscus Margarita was created in collaboration with Jeannie Mai Jenkins and Tequila Tromba. It brings hibiscus, black tea, lime, and strawberry juice.
Since its conception in 2020, Owl’s Brew has won over 17 tasting awards for their flavors, and expanded to 18 states
Classic Mineral Water invests £3.4M in third bottling line [PR]
Classic Mineral Water is the oldest water bottling company on the island of Ireland and is an approved supplier of ALDI, Lidl, Dunnes Stores, Musgraves, Bestways and Tesco. It recently announced that it has signed a new £3.8M deal with ALDI Ireland.
Liam Duffy, CEO and owner of Classic Mineral Water, said: “Through investment in innovative technology and skills we have transformed Classic Mineral Water into a high-speed, state-of-the-art, soft drink processing facility and have achieved a six-fold increase in sales to £12million in just a few years.”
The company expects to surpass £20M in sales by 2024
BrainPOP, a functional, botanical-enhanced energy drink is building out a better-for-you soda with nootropic ingredients [BevNET]
BrainPOP is now selling in an under-utilized niche in medical clinics, surgery centers and hospital cafes in the metro New York/New Jersey area.
While the brand might be aimed at medical professionals, a major obstacle to this channel strategy has been that many hospital vending machines and foodservice options are contracted to “juggernaut” large distributors that BrainPOP has not been able to break into yet
For now, the brand has puffed out its distribution with over 500 locations in convenience stores like 7-Eleven as well as small specialty/natural grocery stores in New York and New Jersey
Josh Landan Shares Why the Ninkasi and Wings & Arrow Merger was the ‘Perfect Fit’ [BrewBound]
Landan, who founded the now defunct Saint Archer Brewery in 2013 and sold it within two years to MillerCoors, is now the CEO of Great Frontier Holdings (GFH), the newly formed parent company of Ninkasi Brewing in Eugene, Oregon, and Wings & Arrow beyond beer offerings Ashland Hard Seltzer, Mucho Aloha Hard Lemonade, Villager Spirits, Voyager Hard Tea and Wings & Arrow Beer Co.
Between the owned brands, GFH will do about 120,000 barrels, covering about six western states. The co-pack business will add another 40,000 to 50,000 barrels this year (Mother Road and Montucky are lion’s share)
250,000 capacity barrels out of facility
Ashland hit 40,000 barrels in 2022 and did about 36,000 barrels in 2021
E. & J. Gallo Winery (Gallo) acquired Bev and its portfolio of premium canned wines and spritzers. [PR]
The acquisition comes two years after Gallo obtained exclusive U.S. distribution rights for Bev and began to bring the popular brand to more consumers across the country.
The first ever TTB-approved "zero sugar" canned wine on the market, Bev wines are three carbs, 100 calories per serving, 11.9% ABV, and are all gluten free
Gallo's Bev portfolio includes Bev Rosé, Bev Blanc, Bev Gris, Bev Noir, Bev Glitz, Bev Glam, Bev Glow, Bev PRIDE, and the newly released Bev Brite. All varietals are from California and are available in 4-packs of 250ml cans and retail between $15.99–$17.99
Datasembly Closes $16 Million Series B Funding led by Noro-Moseley Partners with participation from Grotech Ventures, Topmark Partners and Staley Capital.
“Datasembly provides the best-in-class solution, collecting and normalizing billions of data points weekly. As its customers continue to fight inflation and weather supply chain issues, Datasembly is instrumental in empowering effective pricing, promotion and assortment decisions.”
Datasembly provides critical software and tools to some of the largest and most competitive CPGs and retailers in the world. The new funding will allow Datasembly to scale in a capital-efficient manner, bringing new tools to the market quickly. While legacy market research platforms continue to rely on manual data collection, Datasembly provides competitive intelligence tools that CPGs and retailers need to stay ahead in an instant. [link]