Reyes Acquires Constellation Brands Portfolio From Ace Beverage
Reyes Beverage Group subsidiary Harbor Beverage has acquired the rights to distribute Constellation Brands’ beer offerings throughout Los Angeles from Ace Beverage, Constellation spokeswoman Jamie Stein told Brewbound.
Stein, who said Reyes would begin distribute the portfolio on December 1, called Harbor “the right partner to unify this market.”
“As the industry evolves and increases complexity, we believe the distributor tier will continue to consolidate — and that in selective markets scale and the resulting efficiency, will drive future growth and more opportunities to invest back into our brands,” she wrote in an email. “As we’ve shared, the changes we’ve made to unify our route to market in SoCal are about best positioning us for long-term health and success of our business and the industry.”
The move marks the fourth beer wholesaler change forced by Constellation in Southern California this year. In separate deals, Reyes acquired the rights to sell Constellation’s offerings — including popular imported Mexican beer labels Corona, Modelo and Pacifico as well as craft offerings from Ballast Point — from Triangle Beverage in Santa Fe Springs, Beauchamp Distributing Company in Compton and Markstein Beverage Co. in northern San Diego County.
A Reyes spokeswoman declined to comment. Ace Beverage owner John Anderson did not return requests for comment.
Brewery Count Tops 7,000
At the end of October, there were 1,100 more breweries operating in the U.S. than there were at this time in 2017, according to CraftBeer.com, a website owned and operated by industry trade group the Brewers Association. According to that report, there were 7,082 active brewery permits in the U.S. as of October 31. Additionally, BA chief economist Bart Watson told the outlet that about 2,000 breweries are in planning.
Utah Mandates Tests to Ensure 3.2 ABW
The Utah Department of Alcoholic Beverage Control is mandating laboratory testing of beers sold in grocery and convenience stores, as well as taprooms, to ensure they do no exceed 3.2 percent alcohol by weight (ABW), The Salt Lake Tribune reported.
Utah is the only state with such a requirement, Brewers Association director Paul Gatza told the outlet.
“This is something that would not fly in many states, as it puts an undue burden on the smallest breweries that have the least amount of sales,” he told the Tribune.
As of April 2019, Utah and Minnesota will be the last two states that bar sales of beer above 3.2 ABW in grocery stores.
Kirin Increases Focus on Health
Japan’s second-largest beer maker, Kirin Holdings Co., plans to shift some of its focus from beer to more functional offerings in the health-and-wellness space, according to Bloomberg.
The Tokyo-headquartered company is planning to launch several products using its proprietary lactic acid bacteria technology, which the company believes could triple the revenue of its health care division to about $880 million.
Kirin, which owns a 24.5 percent stake in the Brooklyn Brewery, is expected to unveil additional details in a business plan next year.
Beer Institute Releases October Domestic Tax Paid Estimate
U.S. breweries shipped about 13.6 million barrels of beer in October, down 2.9 percent compared to 2017 levels, according to the Beer Institute (BI), which cited unofficial estimates of domestic tax paid shipments from the Alcohol and Tobacco Tax and Trade Bureau (TTB).
BI chief economist Michael Uhrich explained that many wholesalers stocked “above average inventory levels” in anticipation of fall price increases as well as in an attempt to “avoid potential shortages from planned changes to supply chain systems.”
Through the first 10 months of 2018, U.S. beer companies have shipped more than 142 million barrels of beer, down 2.1 percent from the more than 145 million barrels shipped in 2017.
Beer Purchaser’s Index Contracts in October
Indeed, wholesalers purchased less beer in October, according to the National Beer Wholesalers Association (NBWA). The organization’s Beer Purchasers’ Index — which helps explain U.S. beer distributors’ monthly purchasing behavior — contracted in October with a reading of 48, down 2.5 points from 2017 levels. A reading greater than 50 indicates segment expansion, while a reading below 50 indicates contraction.
The craft segment showed significant year-over-year contraction with a reading of 48.3, down from last October’s 64.2 reading. However, wholesalers ordered more import beers last month, as the import reading of 72.4 was up nearly 10 points from the same time last year. Additionally, the FMB/PAB reading of 67 was well above last year’s index of 47.7. Cider also expanded with a 54.3 reading, up considerably from October 2017’s 32.9 reading.
Barley Prices on the Rise
The price of barley has increased after rain and snow damaged crops in Canada, Bloomberg reported. Additionally, global stockpiles of barley hit a 35-year low as drier conditions hurt production from Europe to Australia.
According to the report, the price of a metric ton of barley in Canada could top $207, up as much as 21 percent over 2017 prices.
“There’s no question that the situation has pushed prices up,” Peter Watts, managing director of the Canadian Malting Barley Technical Centre, told Bloomberg. “Certainly it is going to mean some higher costs for the brewing companies as a result.”
A-B Releases Limited Edition O’Doul’s Cans
The day before Thanksgiving is the second most popular local bar night in the U.S., with 57 percent of millennials planning to drink beer that evening, according to a proprietary survey created by ad agency 3PM. However, the survey found that only 35 percent of millennials have tried non-alcoholic beer.
To promote responsible consumption on the eve of Thanksgiving, Anheuser-Busch InBev is releasing limited-edition cans of its non-alcoholic O’Doul’s brand created by artist Mr. Kiji.
Earlier this week, Brewbound reported on major beer companies’ renewed focus on non-alcoholic offerings as well as a growing number of craft breweries tackling the style.
A-B Releases New Dilly Dilly Ad
Anheuser-Busch InBev will debut a new Bud Light “Dilly Dilly” ad during the Thanksgiving football games. The latest spot, “One Sip,” builds off previous ads, “Bud Lights for Everyone,” and “A Royal Affair.” The latest ad features a stuffy count and countess attempting to persuade the Bud Light-loving king to drink a mead.