Dear Client: 

Bang Energy parent VPX — after being virtually silent with distributors according to sources — is now very vocal, sending form letters to certain distributors giving what many believe are vague threats of for-cause termination.    

One distributor, who reflects the thoughts of many others we have spoken to, said, “My view of the  simultaneous mailing of a form letter to a large number of distributors demonstrates ‘bad faith’ and would cast a negative evidence shadow over any future attempts of termination for cause. It appears more like a temper tantrum than a well thought out legal process to change distribution channels.”  Others agree. Are so many distributors simultaneously suddenly losing focus in the “fourth quarter” of 2019? It must be a tremendous coincidence. 

On Friday, Bang sent yet another email to certain distributors about new sales programs.  

As one distributor notes:  “Now they send this email around ….We have never received ONE program from them EVER .. .and the only thing that has happened over the past few days is hearing crickets as we try to contact them.”

What notification is that?  

“Team – over the last few days you and your teams have received a lot of communication regarding programs, key account authorizations and new deals to take advantage of. With all of these now opportunities at hand  [Ed. Note: Huh?] – I would like to address the opportunities to grow our businesses utilizing the cohesiveness of these deals, programs and authorizations together – directly & uninterrupted.

“I apologize in advance for the mass email, however having 58 distributor partners at this time this is the only efficient way for me to manage my time and respect all of your inquiries while providing the best quality partnership this brand and your businesses deserve.  

“Please respond on this thread, with a Date and Time next week to go through these programs and I will work with you and/or your teams to confirm a WebEx appointment to discuss all of the TREMENDOUS programs we have in place and how we can best optimize these deals to execute within your individual markets.”

And yet several distributors we spoke with had not received any sales programs, and in fact cannot get in touch with anybody at Bang. 

NA ….. It’s another world. This is why we have franchise protections in beer, folks. 

A-B FRONTING RITA’S ICICLES

If it weren’t for the current crisis of the coronavirus, I suspect this would surely get some sort of purtitan outrage. Turns out, nobody gives AF these days. 

A-B is rolling out a new Ritas’ line extension:  a new Freeze-A-Rita Frozen Margarita Icicles which “combine the refreshing aspect of ice pops with the tipsy goodness of a boozy drink. Talk about a frozen cocktail, right?”, says website Delish.  

There are two flavors: Classic margarita and strawberry. Each icicle has 55 calories and 8% ABV.

TAFFER SEES LONG ROAD TO ON-PREMISE COME-BACK; GIVES TIPS

Jon Taffer, a longtime on-premise writer and the host of Bar Rescue, told Bar Business Magazine that “I think we need to be thinking about our businesses, how we move forward, and putting together a plan.”

What is that plan?  Even after new sterilization protocols, we can’t expect it to go back to normal immediately.  “The whole premise of flu season will be perceived differently by society now. And every fall, we’re going to get a reminder of this whole spacing element,” says Jon. “I don’t think 400 people are going to pack into a 2000-square-foot space for quite a while. And so when we take a look at the sociological premise, it affects everything. It affects fast food restaurants—people are not going to line up like they used to. If we take a look at bars, people are not going to sit shoulder to shoulder with strangers so quickly. We’re going to have to spread bar stools a little bit. We’re going to have to spread seating in restaurants and casual dining facilities significantly.”

He continues:  “I’ve been looking at floor plans and layouts, and no matter how I slice it, as an industry we lose between 40-60% of our interior capacity,” says Jon. “At the end of the day, our business is most rated and success is most determined by revenue per square foot. That’s how we live and survive. Our revenue per square foot is going to be reduced significantly going forward and that horrifies me.”

“It seems like the greatest impact with regard to capacity is going to hit in the casual sector and the bar sector because that’s where the densest seating and the densest customer mixes tend to be,” says Jon.

“I think we lose 30-40% of our operations that don’t reopen. I think this is going to affect change,” says Jon. “And the brands that step out and prove that they’re safe, that the consumer can have confidence in them, that they’re reactive to this situation around us, are the ones that are going to survive.”

That is a scary scenario where 30 to 40% of on-premise doesn’t survive.  My number has been — gut instinct only and in speaking with others in the know — 20%.  

Either way, it’s going to be bad for that channel.  

Until tomorrow,

Harry, Jenn and Jordan

“We are what we pretend to be, so we must be careful what we pretend to be.” – Kurt Vonnegut

———- Sell Day Calendar ———-

Today’s Sell Day: 9

Sell days this month: 22

Sell days this month last year: 22

This month ends on a: Thurs.

This month last year ended on a: Tues.

YTD sell days Over/Under:  +1