Constellation Brands reported its second-quarter fiscal 2019 earnings today, which were highlighted by 10.1 percent growth in beer depletions (sales-to-retailers) and an 8.7 percent increase in shipments (sales-to-wholesalers) for the comparable three-month period ending August 31. Net sales of Constellation Brands’ beer portfolio increased 10.5 percent during the quarter, to more than $1.5 billion.
Citing a “challenging” craft beer market, California’s Lagunitas Brewing said Tuesday that it would slash 12 percent of its workforce in a move that will impact at least 100 employees. The announcement comes about 17 months after Heineken International completed its purchase of the Petaluma-headquartered craft brewery.
The craft brewing industry has reached its “most competitive moment,” but that’s not necessarily “a bad thing,” Dogfish Head co-founder Sam Calagione said during a “state of the industry” panel discussion at the final Brew Talks meetup of 2018. Calagione, along with Revolution Brewing chief commercial officer Donn Bichsel and Canarchy Brewery Collective president and COO Matt Fraser, explained to more than 150 beer industry professionals how they’re navigating through the so-called “noise” in the space.
“We budget to fail,” Monday Night Brewing co-founder Jeff Heck shared during Brewbound’s final Brew Talks meetup of 2018. Joining a panel discussion that examined innovation within the craft space, Heck along with The Bruery founder Patrick Rue and Calicraft Brewing founder Blaine Landberg, gave more than 150 beer industry professionals a peek into their individual innovation strategies, which includes both success and failures.
Want to stand out at the Great American Beer Festival? Open your checkbook. At the 2019 GABF, put on by industry trade group the Brewers Association, large activations from deep-pocketed corporations took center stage, drawing throngs of beer drinkers to sprawling setups that included TVs, bar games and live music while 800 breweries pouring 4,000 beers scrapped for attention inside the Denver Convention Center.
In an effort to curb beer’s dwindling share of the broader alcohol market, three major trade associations — the National Beer Wholesalers Association (NBWA), the Brewers Association (BA) and the Beer Institute (BI) — have formed a group tasked with improving the health of the beer segment. During the NBWA’s annual convention Monday, outgoing chairman Jim Matesich announced the the formal launch of the “Beer Growth Initiative.” The effort is being spearheaded by alcoholic beverage consultancy Tamarron, along with leaders from the NBWA, BA and BI who are serving on a steering committee.
The faster beer companies embrace segments that are connecting with consumers, the quicker the overall industry can return to growth, Mike’s Hard Lemonade president Phil Rosse told thousands of wholesalers during the National Beer Wholesalers Association’s (NBWA) annual convention in San Diego. “I think that’s what’s ultimately going to give the industry its best chance to get back to growth,” Rosse said during a panel that also featured D.G. Yuengling & Sons Inc. COO Dave Casinelli and Dogfish Head Craft Brewery co-founder Sam Calagione.
Under the specter of Constellation Brands potentially forcing additional sales of its distribution rights in California, leaders from the National Beer Wholesalers Association stressed the importance of protecting state franchise laws to thousands of wholesalers and industry professionals attending the trade association’s annual convention in San Diego. NBWA chairman Jim Matesich, without naming Constellation Brands, pointed to trade press headlines from June when the beverage alcohol company forced Markstein Beverage Co. to sell its distribution rights in northern San Diego County to Reyes Beverage Group. “Terminations without cause, particularly of distributors that took risks and helped build those brands create distrust in trading partners,” he said.
During Boston Beer Company’s annual Great American Beer Festival breakfast, founder Jim Koch unveiled a new series of Samuel Adams ads and announced a new grant program that will give $1 million to early stage food and beverage companies. Koch said the new series of folksy ads, which highlight hop selection in Germany for Samuel Adams’ flagship Boston Lager, focus on “craftsmanship” and “artisanal values.” The ads end with the tagline: “Brewed inefficiently since 1984.”
In this week’s Press Clips: Anheuser-Busch plans to feature NBA and MLB athletes in ad campaigns; Celis Brewery assumes sales responsibilities for Uncle Billy’s and Pedernales brands; the Beer Institute releases domestic tax paid estimate for August; and more news.
Massachusetts Beverage Alliance (MBA) today announced the official launch of Homegrown Distribution, a boutique wholesaler focused on overlooked craft brands not currently getting enough attention from a network of five pre-existing wholesale partners across the state. As an offshoot of MBA, Homegrown Distribution will assume statewide sales and delivery responsibilities for several brands.
Surging freight costs, a shortage of long-haul truck drivers and new laws restricting the number of hours that drivers can be on the road are cutting into profits of beer companies and other major corporations throughout the United States. Although increased transportation costs are affecting all consumer goods industries, Beer Institute chief economist Michael Uhrich told Brewbound that they’re disproportionately affecting the beer industry because the vast majority of beer sold domestically is shipped. Last year, beer companies shipped 2.9 billion cases of beer, according to the National Beer Wholesalers Association.
This week’s Middle Tier Headlines include: Ska Brewing exits Texas; Cigar City begins exporting to Scandinavia; Maine Beer Company adds Georgia distribution; the NBWA releases the latest Beer Purchaser’s Index; and more news.
Wine and spirits brands are cutting into the growth of the craft beer segment, according to Patrick Livingston, director of client insights for market research firm IRI. Livingston, who led yesterday’s Power Hour presentation hosted by the Brewers Association (BA), said craft beer dollar sales were up just 1.7 percent in IRI’s multi-outlet off-premise U.S. retail universe (excluding convenience stores) through July 8. Livingston added that craft has begun to plateau in off-premise channels, with volume sales leveling off since late March.