Naturdays Proves Budget Beer Is Not Dead

January 30, 2020

Naturdays Proves Budget Beer Is Not Dead

Dear Client:

The biggest surprise in beer last year had to be Natty Light’s Naturdays.

When we first caught wind of an upcoming Natty Light line extension, brewed with “strawberry lemonade flavor” and put into pink and yellow packaging bursting with Flamingos back in November of 2018, we weren’t sure what to think.

Definitely didn’t think it would be the top innovation in beer for the coming year, but that’s what happened. The seemingly-out-of-nowhere brand ranked as the top innovation in all of beer last year.

Naturdays amassed nearly $53 million in dollar sales during 2019, per IRI’s multi-outlet and convenience channel, placing it just a few hundred thousand dollars shy of Lime-A-Rita in sales for the year.

Indeed, the brand’s success may have even caught A-B off guard a little, as the company’s Group VP Marketing of Core & Value Brands, Ricardo Marques, noted at SAMCOM last week how Naturdays “surpassed our most optimistic expectations.”

A-B “TRIPLING INVESTMENT” BEHIND NATURDAYS. And now that they’ve seen what this brand can do, they’re “going all in” – and “tripling” their investment behind the brand this year, according to Ricardo.

Just judging by Naturday’s distribution, Ricardo believes “there’s still tons of opportunity with the brand,” – in one of A-B’s regions the brand is less than 10% distribution, and it’s only above 40% distribution in one single region. So there’s still plenty of runway it seems.

Regardless of the untapped potential, Naturdays proved that economy/budget beer can in fact expand beyond its three traditional buckets: light, regular, and Ice/high ABV.

After Naturdays’ hot start to 2019, we saw A-B roll out Natty Light Seltzer, another head scratching product upon its release last June. And though Natty Seltzer didn’t achieve the level of success that Naturdays achieved in 2019, the results were still pretty solid – with Catalina Lime Mixer and Aloha Beaches each raking in around $14 million in sales in 2019, per IRI MULC.

NEW NATTY SELTZER FLAVOR, HOUSE RULES, HITTING NEXT MONTH. In fact, the results were positive enough for A-B to introduce a third Natty Seltzer variant this year, “House Rules” – a kiwi strawberry flavor set to roll this February. Bringing “House Rules” into the mix is key too, because it enables Natty Seltzer to release a 12-count variety pack of all three of its flavors, which as you know is all the rage in seltzer.

NATTY DADDY LEMONADE, BUSCH LIGHT APPLE. And A-B isn’t done bringing flavor to its budget/economy brands either. They’re gearing up to release Natty Daddy Lemonade later this year, which will come in a 25-oz. can and pack an 8% ABV punch; and set to do a seasonal rollout of Busch Light Apple across two of its regions this year as well.

AND HERE COMES MOLSON COORS’ ANSWER, KEYLIGHTFUL

The success of Naturdays may have even inspired A-B’s competitor, Molson Coors Beverage Co., to try its hand at juicing up one of its lower end brands, Keystone Light, as it is set to launch Keystone Keylightful, a “fruit-forward raspberry lime light beer,” to 40 states on March 1, 2019, per Molson Coors’ blog.

Keylightful checks in at 4.1% ABV, carries 125 calories, and will come in in 12-packs and 30-racks initially. And like Naturdays, Keylightful will have its own crazy packaging, coming “in splashy pink-and-neon-green packs” that “feature the brand’s mascot,” a here-to-party French Bulldog donning a short-sleeved button down and shades, named Lil’ Breezy Keezy. The Frenchie “will be featured in all of the brand’s creative work, ranging from video spots and social media to retail point-of-sale advertising,” according to the blog.

You may recall the brand was teased at Molson Coors distributor meeting during NBWA last fall, and because the initial reception from retailers and wholesalers “has been pretty phenomenal,” the company decided “to push into more markets than originally planned and coordinated its launch with spring break season.”

Indeed, the seltzer standoff this spring and summer will grab a lot of eyeballs, but this budget battle between Naturdays and Keylightful will be fascinating to watch as well.

BRIZZY VS VIZZY: TINY COMPANY CHALLENGES MOLSON COORS BEVERAGE CO.’S USE OF SIMILAR SELTZER TRADEMARK

You may recall we recently reported on the Mark Cuban-funded Future Proof, co-founded by Aimy Steadman, Justin Fenchel, Brad Schultz (see BBD 01-27-2020). Their products include BeatBox, and the recently introduced Brizzy, a premium hard seltzer “for foodies,” as well as a slim can wine play, Corkless launching in Q1.

Brizzy, Future Proof’s first seltzer, which launched in October, ended the year with 4,000 case depletions. “HEB is selling very well, with increasing velocities,” said Justin.

But then came word of Vizzy, the hard seltzer soon coming from Molson Coors Beverage Co. Future Proof got worried, as they had already plunged a lot of money and time into creating Brizzy.

By now, the company shared with BBD, Future Proof has sent a formal cease and desist letter to Molson Coors Beverage Co.’s U.S. counsel. We’re told they intend to respond by February 7.

The likely next step? Litigation, say the BeatBox guys.

THE BACKGROUND. “We started this process really in August of 2018 and it took us a year to develop the seltzer and get the permits we need to do it,” says Justin to BBD. “And spending lots and lots of money and time and resources, which for a small company, it’s a lot of work to get a seltzer into the market. And we felt very excited. In fact, HEB tried the flavors and cut us into all their stores for their fall reset back in October of 2019. And we were really excited to get Brizzy seltzer out into the market.

THEN COMES MC. “Unfortunately, within two months of us launching this seltzer, we started to get wind from some of our MillerCoors wholesaler partners [now Molson Coors] and from stuff we were reading in the trade that MillerCoors was actually putting out their own hard seltzer in 2020 called Vizzy Hard Seltzer.

He continues: “In our view there’s so much opportunity for confusion. Starting with the name, it’s nearly identical: Vizzy and Brizzy. The product is similar. It’s a hard seltzer. We’re a hard seltzer. The packaging is pretty similar — they went more full color just like we did in our packaging. And the distribution channel, the path of market is nearly identical, as many of our wholesale partners are MillerCoors wholesalers partners. And so we, you know, have a right as a small business to defend what we feel is our [intellectual property].”

So: “We have formally notified [the former] MillerCoors that we oppose their plans to infringe on our trademark.”

The official letter from January 15 also says Future Proof believes then-MillerCoors might have had early access to Future Proof’s plans for entering the hard seltzer market, “including knowledge of its brand name, taste profiles, and packaging design” prior to Brizzy’s launch.

MCBC RESPONDS. “When we planned for Vizzy and filed the trademark application, Brizzy had a static web site that looked as though it was only in very limited distribution,” Molson Coors Beverage Co. shared with BBD. “The USPTO allowed the application for publication, plus Vizzy’s packaging is markedly different and has differentiated ingredients. We don’t believe consumers will be confused. Distributors and retailers are alike are thrilled about getting Vizzy on shelves this spring, as we all believe that the brand has strong potential to be a meaningful player in the hard seltzer segment.”

Stay tuned…..

USA TODAY SAYS PEOPLE ARE GOOGLING “CORONA BEER VIRUS”

We’d be shocked if BBD readers hadn’t heard of the Coronavirus respiratory illness that is emanating from Wuhan, China. The unfortunately- (for our industry) named illness is causing a spike in beer-related searches, according to USA Today.

In the past week, “corona beer virus” and “beer virus” have been trending as searches, said the outlet: “In the United States, Google Trends calculated that 57% of the people that searched one of those terms searched for ‘beer virus,’ and the remaining 43% searched for ‘corona beer virus,'” per story. We note this could be more of an issue outside the U.S., which is more of a problem for AB InBev.

There are interesting regional tones, too: “States like Hawaii, New Mexico and Kansas are searching ‘beer virus’ more, whereas states like South Carolina, Colorado and Arizona are searching ‘corona beer virus’ more.”

But Constellation Beer spokesperson Maggie Bowman told BBD that their business continues to do well, and they believe their consumers largely know the difference between the virus, and their beer and business.

BREWPIC: Behold, Brizzy and Vizzy.