Judge Sends Beer Definition Lawsuit to Trial
A judge has denied Anheuser-Busch InBev subsidiary Grupo Modelo’s bid for partial summary judgment in its trademark infringement lawsuit against Constellation Brands for the company’s use of the Corona trademark for hard seltzer.
U.S. District Court for the Southern District of New York district judge Lewis A. Kaplan wrote that Modelo’s arguments as to why Constellation is infringing on the companies’ sublicense agreement “do not carry the day.”
At issue in the lawsuit, which was filed in February 2021, is whether Constellation has the right to use the trademarks it licenses from Modelo for products other than beer. Constellation produces and imports Corona, Modelo and Pacifico to sell in the U.S. and Guam under a 2013 licensing agreement that followed A-B’s 2012 acquisition of Grupo Modelo. In the agreement, beer is defined as “beer, ale, porter, stout, malt beverages, and any other versions or combinations of the foregoing, including non-alcoholic versions of any of the foregoing.”
However, products offered within the beer category have since evolved to include hard seltzers, which are categorized as a beer by both federal and most state governments. Modelo has argued that hard seltzers do not fall under the definition included in the sublicense. The ongoing lawsuit has included arguments from both sides about the definition of beer itself.
“[The court] recognizes that Modelo has more dictionaries on its side of this debate over the meaning of ‘beer’ than does [Constellation],” Kaplan wrote. “But the fact remains that the dictionaries, however important, do not resolve this case.”
Last month, Kaplan denied Constellation’s motion for impartial summary judgment. With both motions denied, the case will move to a jury trial, barring a settlement before then.
“While Modelo perhaps has the better of the argument, the court is not now in a position to conclude that no reasonable jury could find for CBI [Constellation],” Kaplan wrote.
Carlsberg to Acquire Ontario-based Waterloo Brewing
Danish beer manufacturer Carlsberg has agreed to acquire “Ontario’s largest Canadian-owned brewery” Waterloo Brewing, the companies announced this week.
The all cash deal is valued at C$144 million (more than $105 million USD), with a C$4 per share agreement. The acquisition is expected to close in Q1 2023, with a shareholder meeting planned for February.
The two companies have made a “right-to-match” agreement allowing Carlsberg the ability to match “any superior proposal,” with a deal termination fee of C$6 million (nearly $4.38 million USD) that Waterloo must pay Carlsberg should the arrangement be terminated.
Founded in 1984, Waterloo was the “first craft brewery to start up in Ontario,” according to a press release. The company owns the Canadian rights to Seagram Coolers (purchased in 2011) LandShark and Margaritaville (both purchased in 2015). Waterloo also has extensive “brewing, blending and packaging capabilities” for an “array of contract manufacturing services in beer, coolers and ciders,” according to the release.
“We’ve enjoyed a close relationship with Carlsberg and are excited about becoming part of one of the largest brewing companies in the world,” Waterloo president and CEO George Croft said in the release. “Waterloo Brewing will be a great fit with Carlsberg’s strong, purpose-driven culture, and our board of directors is confident that joining Carlsberg is the best long-term solution for our employees, partners, customers, consumers and community.”
The acquisition is part of Carlsberg’s 2027 goal to grow business “in attractive markets” where it is “small today,” such as Canada, Carlsberg Group CEO Cees ‘t Hart said in the release.
“This exciting opportunity will scale our business in Canada,” Anders Rud Jørgensen, managing director, Carlsberg Canada, said in the release. “The brand portfolios are complementary. Local sourcing will secure long-term robustness of supply, increase commercial flexibility and speed to market for innovations, step-changing the way we operate. Waterloo Brewing’s excellent portfolio of long-standing co-packing relationships will benefit from these combined operations.”
Carlsberg is no stranger to North American craft. The company has been a long-time collaborator with Brooklyn Brewery and acquired its international brand rights in Europe and parts of Asia for around $130 million in 2020.
In other Canadian beer news, SymBev Inc., a Toronto-based beverage manufacturer, has acquired three Ontario-based breweries – Railway City Brewing Company (St. Thomas), Crank Lite Lager (Oakville) and Locker Room Lager (Toronto) – in its first move to build a “new national adult beverage company.”
The three companies will be combined to create SymBev’s “first regional brewing hub,” supported by a Series A funding round, according to a press release. A Series B round will open in January to fund “future acquisitions and invest in new-to-market brands,” extending beyond “just beer.”
Owners of the acquired companies will become shareholders of SymBev. Financial details were not disclosed. The full press release is available here.
Molson Coors Discontinues Sharp’s NA and Coors Pure Brands
Molson Coors will cease production of its Sharp’s non-alcoholic and Coors Pure brands, according to a memo sent to distributors earlier this week.
“Molson Coors continually evaluates sales and profit performance for each package within our portfolio to ensure we focus on products that make the most impact on our mutual businesses,” the company wrote.
Coors Pure, the company’s first organic beer, launched in April 2021. The light beer contained 92 calories, 0 grams of sugar and was certified organic by the U.S. Department of Agriculture.
Year-to-date through November 27, dollar sales of Coors Pure light beer have declined -61.3%, to $2.7 million, at multi-outlet food and convenience stores, according to market research firm IRI.
Coors Pure’s discontinuation in only its second year in market isn’t the first time Molson Coors has been quick to kill an underperforming brand. In July 2021, the company discontinued Coors Seltzer after less than a year in market.
Sharp’s NA was introduced in 1989, and it has failed to gain traction with consumers even while the non-alcoholic beer segment booms. Year-to-date through November 27, dollar sales of Sharp’s NA have declined -0.8%, to $948,406, according to IRI.
Nationwide, non-alcoholic beer sales have reached nearly $250 million at off-premise retailers tracked by IRI.
Heineken USA Report: Bev-Alc Employees from Underrepresented Groups Feel Pressure to Fit In
The results of Heineken USA’s second annual Behind the Label report reveal that 86% of employees in the beverage-alcohol industry have experienced personal bias during their industry tenure.
A majority (82%) of employees from historically underrepresented groups “feel they must mirror their colleagues to ‘fit into’ the industry,” Heineken USA wrote in a press release.
To conduct the survey, Heineken USA tapped Wakefield Research to interview more than 500 bev-alc employees, including 200 women, 100 Latino/a respondents and 100 Black respondents.
Nearly half of respondents (43%) said organizational mentorship and other advancement opportunities have encouraged them to remain in the industry, followed by 40% of respondents saying that belonging to company-sponsored employee resource groups had the same effect.
A majority of respondents (58%) don’t think pay is equal across the industry, a concern that over-indexed among senior executives, who were “more likely to share concerns about a lack of pay equality than those at the mid-level or lower.”
“Our industry is built on bringing people together – celebrating what makes each of us unique while enjoying the similarities that make us feel connected,” Heineken USA CEO Maggie Timoney said in the release. “This was part of the inspiration behind the second chapter of Behind the Label. We wanted to understand what people in the industry needed in order to feel like they belong and how we can best address those needs.
“We want to foster an environment that encourages people to be their authentic selves, both in and out of the workplace, without fearing that they won’t be accepted,” she continued.”
Shmaltz Brand Acquired
About a year after the brand was discontinued, the Shmaltz Brewing brand is making a comeback under new ownership. Jesse Epstein, a 26-year-old rabbinical student, acquired the nation’s first and only Jewish craft beer brand from Jeremy Cowan, according to the Jewish Telegraphic Agency.
Epstein’s plan for Shmaltz is to “use beer as a vehicle for rethinking the idea of a synagogue, and of Jewish communal gathering spaces,” according to the report.
Cowan, who started Shmaltz in San Francisco in 1996, is remaining with Shmaltz as a minority owner and consultant.
Jack & Coke RTD ‘Core Focus’ for 2023
Financial services firm Jefferies shared a recap of meeting with Brown-Forman’s leadership team earlier this week. Notable in that recap is that the spirits giant views its Jack & Coke read-to-drink canned cocktail (RTD) launch as a “core focus” for 2023, with global expansion coming in the second half of the year. Jack & Coke, via Brown-Forman’s licensing deal with Coca-Cola, will launch in the U.S. in spring 2023.
The company also sees international expansion for RTDs as an untapped opportunity. Jefferies views Coca-Cola’s global footprint, Jack Daniel’s and Coke’s high brand awareness and the drink’s status as the “No. 1 bar call in the world” as “key positives.”