Canteen Spirits Scores Distribution Deal, Investment from A-B and ZX Ventures
Anheuser-Busch InBev has forged a master distributor agreement with Canteen Spirits, while its growth and innovation arm ZX Ventures has made an investment in the 2-year-old ready-to-drink canned cocktail brand.
In a message to wholesalers today, beyond beer president Fabricio Zonzini and VP of business and wholesaler development Bob Tallett cited the world’s largest beer manufacturer’s commitment to beyond beer offerings as “one of the pillars of our long-term commercial strategy.” They said the deal with Canteen, which produces a line of vodka sodas and a line of tequila sodas, fits with their portfolio expansion strategy in the space.
“Ready-to-drink, canned cocktails is a fast-growing category in the U.S., and the investment through ZX Ventures will provide additional scale in the segment and a strong complement to our existing RTD beverage portfolio, including Babe Wine and Cutwater Spirits,” Tallet and Zonzini wrote. “As we continue to finalize this partnership, there will be opportunities for you to work with us on transitioning the brand into our network.”
Founded in 2019 by Brandon Cason, Daniel Barnes and Marc Donati, Canteen is sold nationally in retailers such as Kroger, Total Wine, Walmart and Whole Foods. In a press release, the company said its Canteen Vodka Soda line is sold in 50,000 accounts across the U.S., while its Cantina Tequila Soda offshoot is available in 10,000 accounts in 42 states.
Last week, Canteen announced a $31 million debt and equity funding round led by ATX Global Coinvest, a subsidiary of ATX Venture Partners. The company said the funding round would be used to speed up its national expansion and build brand recognition for its 5% ABV, 99-calorie, zero-sugar offerings.
Canteen is in the process of opening a 50,000 sq. ft production facility in southwest Austin.
Stone Brewing in Dispute with Napa Landlord
Stone Brewing Company is engaged in a rent dispute with the landlord of its Napa outpost, the Napa Valley Register reported.
According to the report, Stone claims its landlord, West Pueblo Partners, refused to work with it on rent deferral during the pandemic.
However, West Pueblo Partners is arguing that Stone hasn’t paid around $40,000 in monthly rent since November 2020 and is attempting to evict Stone, which it claims now owes $211,273 in back rent.
For its part, Stone has filed a breach of contract lawsuit in Napa Superior Court, arguing that its 20-year lease protects the business from eviction during events out of its control.
The landlord has objected to that assertion and claims Stone stopped paying rent without any notice.
In a statement shared with Brewbound, Stone Brewing CEO Maria Stipp said:
“We worked hard to avoid litigation with the multi-party investment group that owns our Napa property. As so many businesses have done, we proposed multiple solutions that both recognized the realities of the impact of COVID-19 and also were designed to equitably share the burden of the global pandemic. Cooperation between bars/restaurants and their landlords has been commonplace worldwide throughout this pandemic.
“Unfortunately, our repeated attempts to find a reasonable solution in Napa were rejected. We are fully committed to continuing operations at our Napa Bistro. We love the community, the team and the gorgeous historic 1877 building that we so lovingly restored. We’re hopeful that we can work this out swiftly, just as many of our industry peers are doing, so we can all get back to the beer.”
Stone opened the Napa location in May 2018.
Constellation Brands Takes Impairment Charge on Four Corners
Constellation Brands has once again taken an impairment charge on one of its acquired craft breweries.
In a Form 10-K Annual Report filed with the U.S. Securities and Exchange Commission this week, the New York-headquartered beer, wine and spirits company noted a $6 million impairment charge in Q4 2021 to the trademark of the Texas craft brewery, which was previously valued at $10 million before the write down. Impairment charges are essentially an admission that the company overpaid for a property.
“Certain negative trends within our Four Corners craft beer portfolio, including slower growth rates and increased competition, resulted in updated long-term financial forecasts indicating lower revenue and cash flow generation for the related portfolio,” the company said in the filing. “This change in financial forecasts indicated it was more likely than not the fair value of our indefinite-lived intangible asset associated with the Four Corners craft beer trademark might be below its carrying value.”
The impairment charge to the value of Four Corners — which Constellation acquired in July 2018 — follows similar write downs to the value of the Ballast Point Brewing Company trademarks taken under Constellation Brands’ ownership of the San Diego craft brewery.
In FY2019, Constellation wrote down the value of the Ballast Point trademark from $136 million to $28 million. Constellation again wrote down the value of the Ballast Point trademark by $11 million in FY2020, dropping the value to $17 million.
“During the second quarter of fiscal 2020, certain continuing negative trends within our Beer segment’s Ballast Point craft beer portfolio, including increased rate of revenue decline and increased competition, indicated that it was more likely than not the fair value of our indefinite-lived intangible asset associated with the Ballast Point craft beer trademarks might be below its carrying value,” the company said in the filing.
In March 2020, Constellation Brands completed the sale of Ballast Point and its various properties to upstart Chicago craft brewery Kings & Convicts for $41.1 million.
US Brewers Shipped 14.2 Million Barrels in March 2021
U.S. brewery shipments declined 2.3%, to 14.2 million barrels, in March 2021 (or 333,000 fewer barrels than March 2020), according to domestic tax paid estimates from the Alcohol and Tobacco Tax and Trade Bureau (TTB) shared by the Beer Institute (BI).
March 2021’s declines broke nine consecutive months of shipment growth. In 2021, shipments increased in both January (+2.4%) and February (+2.6%). Through the first three months of 2021, brewers have shipped 38.55 million barrels of product, a 0.7% increase compared to the same three-month period in 2020.
The BI also noted that the TTB has revised its December 2020 estimate to a 4% increase (14,474,000 million barrels), after a previous estimate of -0.2% (13.8 million barrels). That takes calendar year 2020 shipments up to a +0.6% increase, to 168,376,000 barrels (an increase of more than 1 million barrels).
The BI also shared state shipment data for March 2021 that showed a 2.8% decline, to 15,775,464 barrels, compared to March 2020. Year-to-date state, state shipments are up 0.4%, to more than 45.3 million barrels.
Aluminum Pricing Examination Act Reintroduced in Congress
A bill aimed at increasing transparency in aluminum pricing is back in Congress.
The Aluminum Pricing Examination (APEX) Act (H.R. 2698) — a bill aimed at heightening transparency within the aluminum pricing market — was reintroduced in the House of Representatives earlier this week by Reps. Al Lawson (D-FL) and Ken Buck (R-CO).
The legislation would provide the Commodity Futures Trading Commission (CFTC) and Department of Justice (DOJ) with oversight powers over “aluminum price setting, benchmarking, and reporting entities,” according to the Beer Institute (BI).
“We applaud Representatives Lawson and Buck for continuing their bipartisan work to level the playing field and ensure unfair market practices do not disproportionately harm the American beer industry or the 2.1 million jobs it supports,” BI president and CEO Jim McGreevy said in a release. “The APEX Act will bring much-needed transparency to aluminum benchmark pricing, which helps all those in the beer industry and the multitude of American job creators that rely on aluminum.”
The 2021 version of the APEX Act follows similar efforts in 2018 and 2019 that didn’t gain traction.
According to the BI, more than 74% of all beer produced and sold in the U.S. is packaged in aluminum cans and bottles. The group added that aluminum for cans is “the single most substantial cost in American beverage and beer manufacturing.” The BI cited a report by Harbor Aluminum spanning March 2018 through December 2020 found that the Section 232 tariffs cost the U.S. beverage industries an additional $848.6 million.
“The tariffs have created significant costs on aluminum end-users, and these costs are only magnified by the problem inherent in the current aluminum pricing structure,” the release said. “When the tariffs are coupled with the effects of the pandemic, American businesses are faced with enormous costs and American jobs and future investment are imperiled.”
Roadhouse Brewing Co-Founder Fills Open BA Board Seat
Colby Cox, the co-founder of Jackson, Wyoming-based packaging brewery Roadhouse Brewing Co., will fill the at-large board position vacated by Denizens Brewing co-founder Julie Verratti, the Brewers Association (BA) announced this week.
Verratti’s 22-month term opened up once she became an associate administrator with the U.S. Small Business Administration earlier this year.
Cox’s board term will expire in February 2023. He previously served on the BA’s public relations and marketing committee.
Heineken Q1 2021 Earnings Notes
Heineken N.V. said its flagship Heineken brand recorded overall volume growth of 12.1%, while non-alcoholic Heineken 0.0 posted double-digit growth, the company reported during its Q1 2021 earnings report this week.
In the U.S., the company’s portfolio-wide beer volume increased low-single digits in Q1. The Heineken brand grew “mid-single” digits, driven by the flagship Heineken brand and Heineken 0.0.
Lagunitas declined “a mid-single digit,” which the company attributed to “on-trade closures at the start of the year.”
In other Heineken news, its U.S. business has secured a sponsorship deal as “the exclusive beer and hard seltzer partner” of UBS Arena, the future home venue of the New York Islanders hockey franchise. UBS Arena is currently under construction and expected to open for the 2021-22 NHL season.
The partnership will provide Heineken with four branded bars throughout the arena.
Wachusett Brewing Shutters Cambridge Location
Wachusett Brewing has closed its Wachusett Brew Yard brewpub in the Harvard Square neighborhood of Cambridge, Massachusetts, according to Boston Restaurant Talk.
Westminster, Massachusetts-based craft brewery moved into the location in November 2019 and installed a 15-barrel brewhouse and 16 draft lines, according to a report in Cambridge Day.
The Harvard Square brewpub had been the original location of Massachusetts-based brewpub chain John Harvard’s Brewery & Ale House, which opened in 1992 and once operated several locations throughout New England. Only two John Harvard’s locations remain, both on-site at ski resorts in Hancock, Massachusetts, and Ellicottville, New York.
Hard Seltzer Roundup: New Releases from Prost Brewing, Victory, Rainier; Fountain Expands Distribution
More breweries are entering the $4.1 billion hard seltzer market just in time for the summer selling season.
Denver-based Prost Brewing announced its AlpenBlume Hard Seltzer, a line of German-inspired 5% ABV hard seltzers fermented with German wine years.
“Over the past year of development, I was continuously asked why a German-focused brewery was launching a seltzer product,” Prost president David Deline said in a press release. “My answer was simple. We listened to our customers’ wishes and knew we had to act. Germany is one of the leaders in seltzer water consumption per capita.”
AlpenBlume (5% ABV, 100 calories) will be available in variety 12-packs with four flavors: Cucumber Lime, Ginger Peach, Strawberry Rose, and Lemon Elderberry. AlpenBlume will be distributed within Colorado.
In the Pacific Northwest, Pabst-owned Rainier Beer has released Rainier Seltzer in three flavors: Huckleberry, Apple and Lemon. The hard seltzers are available in variety 12-packs. Each checks in at 4.6% ABV and contains 90 calories, no sugar and 1 gram of carbohydrates.
Rainier Seltzer is available in Washington and Oregon, and is contract brewed in Verona, Wisconsin, according to the brand’s website.
In Pennsylvania, Artisanal Brewing Ventures’ Victory Brewing Company announced this week the release of Victory Waves Craft Hard Seltzer, which checks in at 5% ABV and contains 100 calories and 1 gram of sugar per 12 oz. can. Victory Waves, which is sweetened with monkfruit, will be sold in variety 12-packs featuring Mixed Berry, Mango, Lime, and Orange
Victory Waves will be available in Pennsylvania, New Jersey, Maryland, Delaware, Virginia, Connecticut, and Washington, D.C., later this month.
Another ABV brand, New York’s Sixpoint Brewery is launching its own hard seltzer brand, Party Poppers, in May.
Party Poppers (5% ABV, 100 calories and less than 1g of sugar) will launch in variety 12-packs of four flavors: Tiki Lemon Bar, Cucumber Lime Daybreak, Triple Berry Disco, and Passionfruit Orange Guava Punch. The brand will be sold in New York, New Jersey, Connecticut and throughout New England.
Texas’ Real Ale Brewing Co. has launched a line of hard seltzers in four flavor combinations: Cucumber Melon, Tangerine Yuzu, Peach Pomegranate and Grapefruit Black Raspberry. Real Premium Hard Seltzer (5% ABV, 1g sugar, 2g carbs and 99 calories) is available in variety 12-packs at grocery and beverage retailers in Texas, including HEB, Whole Foods, Spec’s and Total Wine.
Massachusetts-based Willie’s Superbrew is mixing trends and debuting Seltzer Unleashed: Juicy-Hazy-Hopped Seltzer, a limited release containing 23% mango, pineapple and guava juice. The 6% ABV seltzer is dry-hopped on Citra and Mosaic hops, “providing aroma and depth far outside the realm of a normal seltzer,” according to a release. Each 16 oz. can contains 210 calories, 10 grams of sugar, 13 grams of carbohydrates.
New York City-based Fountain Beverage Company plans to expand to 11 markets.
Fountain is available in two variety 12-packs, Tropical (Pineapple, Passionfruit, Mango) and Original (Tart Cherry, Blueberry, Lime). Each 12 oz. can checks in at 5% ABV and contains 100 calories.
New markets include:
- Arizona (Scout Distribution),
- California (Scout Distribution),
- Connecticut (Hartford Distribution, Dichello Distributors)
- Florida (Southern Eagle),
- Maine (Craft Collective),
- Massachusetts (Craft Collective),
- North Carolina (Pretty Ugly Distribution),
- Rhode Island (Craft Collective),
- South Carolina (Aleph Wines),
- Vermont (Calmont Beverage),
- Virginia (Pretty Ugly Distribution).
Fountain, which was founded by Bruce Wilpon and Tomas Larsson and launched during Summer 2020, is distributed in New York City, Long Island and Westchester County by SKI.
Pendleton, Oregon-base Suzie’s Brewery is rolling out a “loaded,” cocktail-inspired line extension of its organic hard seltzers, the company announced this week. New flavors include Mojito, Pina Colada and Moscow Mule. Each checks in at 9.5% ABV with no sugars or carbohydrates. All flavors are available in 4-packs of 16 oz. cans.
Heineken USA Launches New Dos Equis Ad Campaign
Heineken USA has launched a new advertising campaign, “A Dos of XX” with the tagline “Get a Dos,” for its Dos Equis Mexican import brand. The first TV spot taps into the struggles many of us will have getting used to going out again.
The ads, created by agency Sid Lee, began hitting television this week and will run across social, digital, retail and out-of-home beginning April 29.