Houston: Total Devastation


Dear Client:

Corpus Christi, Rockport, and Port Aransas, Texas all got the brunt of the landfall of Hurricane Harvey, a category 4 hurricane that has proved to be a slow moving bitch that won't go away, as it continues to suck warm water from the Gulf and dump it into Southeast Texas.

But while those coastal towns got the brunt of the brute force of the hurricane, it was Houston that got the aftermath of flooding, the likes of which haven't been seen in 100 years. Almost the entire city.

On Sunday afternoon I spoke with Bo Huggins of Houston Distributing Company, Don Faust, Jr. of Faust Distributing in Houston, Barry Andrews of Andrews Distributing Co. in Corpus Christi (and Dallas), and Larry Del Papa of Del Papa Distributing Co. in Galveston and surrounding counties along the coast. We hear Silver Eagle and Republic also are grounded in Houston.

Despite the devastation, all of these distributorships' facilities are intact, mostly, despite minor damage to the facades. The real problem: Getting drivers, merchandisers, and salespeople back -- many of whom have experienced destruction in their own personal property. And of course, which accounts are even open, and how to get there? All distributors we spoke with said they are not likely to roll delivery tomorrow, except for Del Papa in certain counties and only full pallets. (And all distributors said they were gratified to hear from so many of their suppliers and friends).

But what struck me the most was the drive to deliver. You don't see this in the bread, Frito, or other DSD delivery companies. People need their beer. And each of these companies is taking extraordinary lengths to find out what and when and where they can deliver. Is Tuesday okay? Wednesday? In Houston certainly tomorrow is out. The key is finding out:

Which roads are navigatable?
Which employees are able to get to work, given their circumstances?
Which accounts are in a condition to even accept beer?
What distributorships/brewers can do to help the community at large?

But let me tell you something: I lived in Houston for many years, and there are a few things I can tell you about Houston:

It is flat, right at sea level,
It has many bayous, and drains for shit.
And this storm is hovering over it and doesn't seem to want to leave.

The thing about Houston, and I talked about this with Don Faust and he agrees, is that it has a resilience foreign to other big American cities. Because Houston doesn't screw around. Zoning laws? Whatever. Building permits? Pay the man. It's a can-do city and will rebuild twice as fast and at half the cost as any other major city because there's very little red tape in that cowboy oil town. You build and ask questions later. (Hell, one local brewer, 8th Wonder, used their high truck to help rescue people stranded on rooftops this weekend.)

Meanwhile, A-B is stopping the line at their Cartersville brewery in Georgia and canning water for victims (something they've been doing for years now when disasters strike). "We have already shipped a truckload to the area," Gemma Hart, A-B's VP Communications, told BBD. As you may know, A-B has a major partnership with the Red Cross, and they also have company resources and disaster relief funding for hurricane-affected colleagues. "Our Texas teams have been amazing this weekend," she said.

As for their area facilities, A-B has a big Houston brewery, plus Karbach and the Longhorn facility. Gemma understands that so far, they have all weathered the storm, and employees are safe. Their Houston brewery general manager says he is beginning the planning process of bringing the operation back up to full speed.

We'll have updates as they come in. More on the state of local craft breweries in CBD. But even the National Weather Service, which is not prone to hyperbole, call this the worst flooding of a major American city, ever. Including Katrina. "Unprecedented" flooding "beyond anything experienced", they said.


Lime-A-Rita announced today that it will be an Official Sponsor of the NFL for the first time.

"Lime-A-Rita has brought the fun to stadiums for the past five years, and this season, the brand is looking to take it to the next level," per announcement.

The activation will involve larger team integrations, and feature a variety of ready-to-drink margaritas. "Whether fans are experiencing the game from the stands or their couch, Lime-A-Rita will be there to bring flavor to every play."

A-B estimates the NFL fan base is 45%. "There is a large cross-over between NFL fans and Lime-A-Rita drinkers, especially in the female demographic," said Renie Anderson, SVP, Sponsorship & Partnerships Management for the NFL.

In other Rita news, the brand launched its limited fall/winter seasonal flavor, Pome-Granate-Rita.

The NFL announcement coincides with a creative agency transition for the brand: Lime-A-Rita has hired Fallon as the brand's Creative Agency of Record, effective immediately.


Beer just isn't having a good summer in the scandata.

Latest IRI, to August 13, beer is down both in dollars and volume in the latest periods, despite being up 0.5% in dollars YTD, in multi-outlet and convenience.

It's bleeding from the top: Domestic premiums, down 3.4% in dollars YTD -- more than 1.5 dollar share and more than 4% in volume -- have dropped to dollar sales down 4.7% for the 4-week period, and closer to 2 share point losses of dollar share. It's slightly worse for the 12-week period, where domestic premiums are down more than 5% in dollars.

Sub premiums are having a tough time, too. Down 2% in dollars YTD, they're down slightly more than that for the 12-week period, though they'd only been down 1.5% for the recent 4 weeks.

What's gaining? Craft and imports, whose growth trends have waned with the year's progression, are still up mid-single digits (in dollars) as of the latest 12 weeks. Imports have gained 1.17 dollar share of beer, while craft is up 0.63. (If you weren't aware, import are actually larger in absolute dollar sales than domestic sub premiums as of the latest periods -- by a decent amount. It's actually been that way for a while.)

And of course, domestic super premiums have continued their steady gains. YTD they're up 9.8% in dollars, .62 share of beer dollars; it's at 10.3% and 0.73 for the latest 4-week period (though 12 weeks is actually +9.6% and at 0.71 dollar share gains).

Until tomorrow,

Harry, Jenn, and Jordan

"Nobody realizes that some people expend tremendous energy merely to be normal." - Albert Camus

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