Running Diary: Beer Marketers Insights Conference (5/16/24)
I attended the Beer Marketers Insights Conference on Thursday in downtown Chicago. These conferences are geared a lot more toward “the big guys”, but I find them still find them very helpful. The morning led off with a lot of the hard questions like “Is Beer Dying?” or “What’s Next for Beer?” Few claimed to have the answers, but the room had an energy to it that I wouldn’t call overly concerned. There was a feeling of acceptance that we are in an unusual transition as an industry that now requires being a “Total Beverage” outfit in order to bridge our way toward stability with newfound momentum. Here’s a running diary of takeaways and nuggets I wrote down, as well as two questions I had asked on stage.
Recycling Bud Light Fallout Comps
Industry data has entered an unusual timeframe where it’s easier for Bud Light to look good, because sales are now being compared to the boycott period. Miller & Coors are “recycling tough comps” as they say, trying to live up to a period last year where they received an unexpected boost from the fallout.
Flavortown
The word flavor was said no less than one thousand times throughout the day in connection to what today’s consumer wants and the continued success of Flavored Malt Beverages and Ready to Drink Wine/Liquor-based concoctions.
In a craft beer setting, an example I think of is how we used to name IPAs after the hops, where as now I think there’s greater success naming a various after the flavor. See New Beligum with “Juice Force”, “Juicy Haze”, and “Tropic Force”. I feel I was all over this one 7 years ago when we released Tropic-Hero, but the motivation then was as much due to usage of unnamed numbered hops and to avoid using a trademarked hop in the brand.
Stat: There are 5 MolsonCoors/Constellation beer distributors in the country that collectively make up 20% of US beer sales (I assume in CEs)
Mallika Monteiro, Constellation Brands’ Chief Growth & Digital Officer - One of my favorite talks of the day with some inspiring words about the consumer, building brands, and even being wrong. Per Mallika:
We need to be “Consumer Obsessed”
Corona’s Non-Alcoholic Sunbrew is their best testing liquid EVER in consumer trials:
Constellation is making moves toward efficiency with fewer, bigger platforms, with Modelo & Corona each being an example of a “platform”, because it makes the ad dollars work more efficiently. By making more extensions off Modelo for example, they can advertise Modelo and get brand recognition for its offshoots.
When Corona Hard Seltzer was launched, a goal was set of becoming the #3 brand in the category behind Truly and White Claw. Their failure to do so and the lack of momentum that Hard Seltzer has caused them to deprioritize the brand. My understanding is that they aren’t killing it, but they aren’t investing nearly as much behind it going forward. I appreciated the willingness to talk about a miss here, which she also did re: their craft beer acquisitions.
Pacifico is up 20% 😮
There’s a TikTok trend of adding flavors to Corona, like grenadine, so they’re test marketing Corona variations with these pre-mixed.
Random: I grabbed Coke and it had Deadpool on it and I started to wonder…
Jim Koch Answered My Question
Jim Koch talked about the success of their first NA called Just the Haze, which was up on the projector screen of Boston Beer’s largest priority brands, including Sam Adams Boston Lager & Oktoberfest, in addition to their volume drivers like Twisted Tea and Truly. It was mentioned that about 1/3 of the NA Beer market is “Craft” NA so I was curious about their decision to make an NA Hazy instead of say an NA Boston Lager. I submitted the following question to be asked on stage:
Beer Cruncher: “Was the decision to make Boston Beer’s first NA beer have a Hazy name and profile due to a strategic decision to go after that 1/3 Craft NA Market? Or did your R&D with different styles of NAs lead you to Hazy being the most authentic?
I didn’t know what he would say, but my best guess was some kind of hybrid leaning more toward a strategic decision, but I was very wrong.
Jim Koch: [without hesitation] “The latter.”
I don’t want to misquote the rest of his explanation, but he went on to say how much confidence “Just the Haze” gave them in comparison to other styles, and they were proven correct with it going on to win at GABF and World Beer Cup.
Nik Modi, Managing Director at RBC Capital Markets - This was a fun “kick in the ass”, “get with the program” kind of of talk. A few things I wrote down:
If consumer are walking away from beer, Nik asks that you explain Modelo, Pacifico, Michelob Ultra, Voodoo Ranger, Busch Light, and Coors Banquet to him, which are all performing great.
We’re not in the beverage business, we’re in the “mood management business” per Nik. He says we drink 8 beverages a day and that alcoholic ones are competing with non-alcoholic ones.
“There’s no such hing as lazy markets, only lazy marketers”
Prices have been going up lately. Are we doing enough to reinforce that value we provide to command the new, more premium price? (He implies no)
Brian Feiro, President of US Sales & Distributor Operations at MolsonCoors kept using the term “tab replacement” in his talk of all their NA brands, which I liked. He was referring to the high volume of NA choices that are made by drinkers of alcohol, not necessarily instead of alcohol altogether, but replacing certain situations like that final drink on a bar tab with something non-alcoholic.
Next Gen Distributor Panel - THC/D9 Question - This was a fascinating panel discussion with a great crew of 3, whose family has been in the beer distribution business for decades. Robbie Maletis especially struck a cord with me in part because Maletis Beverage is in Portland where Craft is 45%, so his words were especially relatable to me. In regards to THC/D9 beverages which all 3 were unwilling to touch in the absence of federal legislation, I submitted the following question to the panel:
Beer Cruncher: How would you react to a decent sized craft brand of yours building a THC/Delta-9 beverage brand and self-distributing it while you are unwilling/unable to participate? Are you happy to have them get started in the brand building efforts with the potential for you to bring in the brand later? Or are you more concerned that their focus will fall off their beer brands that you currently distribute?
Pretty much everyone unanimously was supportive of self-distributing one’s own THC brand, seeming to value the incubating and proof of concept over the potential fall-off in focus from their beer brands.
JB Shireman, Arlington Capital Advisors
Always an entertaining listen to hear from the leader in the M&A space responsible for so many of the big deals in the beer industry. A lot of the talk was around the recent acquisition of BuzzBallz by Sazerac, followed by last week’s “strategic investment” of Montucky Cold Snacks by Gallo. I knew of Gallo’s power in the wine business and success with High Noon, but what I didn’t know was that they are positioned also as the 3rd largest distributor of Spirits (Volume, not dollars).
I’m going to share more on my thoughts about Montucky later this week, but everyone is most curious about and expecting the impact this will have on distribution and additional aquisitions by Gallo in beer.
Attending these Conferences
It’s easy to have a skeptical view about the topics at these conferences and say “I’ve already heard that before” or “that’s not relevant to me”. Getting out of the brewery for a day or two though and surrounding yourself with smart, hungry people while having these topics pounded over the course of a day is a lot different than reading a quick newsletter. The drive and motivation compounds and can easily rationalize the cost by putting you in a clearer state.
I’ll leave you with this from JB, quoting a former CSO at Coors (name escapes me) about the flavor game…
“The problem with this flavor thing is that eventually you’re a kumquat” 😂