Dear Client: 

Man, it’s getting tough out there. Pabst’s long-time national account manager of the on-premise, Steve Zelinsky, sent notice to on-premise retailers Wednesday that mandated closures have forced Pabst to furlough its on trade team for two months. 

Yes, as normal on-premise operations across the country have largely been shut down, Pabst’s on-premise department has been furloughed until June 1, for about 60 days.

Steve reportedly shared with some retail partners that they’re holding on to hope that the affected department can be back at it as soon as safely possible. Stay tuned. 

CONSTELLATION THROWS IN THE TOWEL ON MEXICALI BREWERY

“Is there anything a man don’t stand to lose,

When the devil wants to take it all away?

Cherish well your thoughts, and keep a tight grip on your booze,

‘Cause thinkin’ and drinkin’ are all I have today.” 

-Mexicali Blues, Grateful Dead 

Well, the devil took away Constellation’s booze, in the form of a plebiscite vote, which might as well be.  While Constellation denied they had a problem, we first knew there was a problem going back six months. Last week, over 65% of Mexicali’s population rejected in a vote the building of their $1.4 billion dollar brewery due to concerns on water usage [see BBD 03-24-2020].  Constellation responded:   “We will continue working with local authorities, government officials and members of the community on next steps related to our brewery construction project in Mexicali and options elsewhere in Mexico.” 

It grew into a national issue, with the president of Mexico even publicly condemning Constellation.  

Then yesterday things came to a head.

Mexico’s president president Andres Manuel Lopez Obrador said Wednesday he had held “productive talks with executives from U.S. brewer Constellation Brands Inc and that they accepted the outcome of a vote in the northern city of Mexicali to cancel a billion-dollar brewery being built there.”

He said in his regular morning news conference that new sites for the company’s brewery are being considered and that Constellation had agreed to accept a “negotiated solution on how to proceed.”

What that means remains to be seen.  Stay tuned… 

CRAFTWORKS FIRES ALMOST ALL ITS EMPLOYEES

Restaurant operator CraftWorks, behind chains like Logan’s Roadhouse and Old Chicago, fired almost the entirety of its 18,000-person workforce and severed employee-benefit plans in an internal memo on Tuesday, per the Wall Street Journal, as CBD reported yesterday. Most employees had been furloughed at the time of notification.

The company still said it hoped to reopen and bring “many of [them] back” with new benefits, eventually. 

CraftWorks Holdings Inc. was in the midst of a bankruptcy sellout when the coronavirus pandemic and subsequent economic turmoil became widespread in the U.S. 

“When the company filed for chapter 11 protection, it planned to sell more than 260 of its best-performing locations [of 336 total locations] out of bankruptcy,” WSJ reported. “Senior creditor Fortress Investment Group LLC had offered $138 million for the assets and provided a $23 million loan to get CraftWorks through bankruptcy.”

As cashflow slowed during on-premise shutdowns, Fortress declared a default and retracted its financial backing. In the wake of this, “Craftworks is now planning to press pause on its bankruptcy case.” 

The company “acknowledged in a court hearing Monday that roughly half its restaurants may never reopen,” (!) but currently has plans for about 125 locations reopening “when the economy picks up steam.”

CONSTELLATION UNVEILS MORE PRONOUNCED “BEST BY” DATING, AND NUTRITIONAL LABELING 

Yesterday’s news on Constellation Beer’s shelf life extensions — draft going to 180 days and package to 270, which was already imminent — also included some other details, like some pronounced “best by” dating and nutritional labeling news. 

“As part of the Beer Institute’s Voluntary Disclosure Initiative to provide consumers with transparent information on the brands they enjoy, Constellation will be implementing  ‘best by’ dating and nutritional details on packaging in 2020,” the company shared with distributors. 

“In the coming months, best by dating will begin to rollout in market and appear on both primary (i.e. BB OCT 2020 indicating Best By October 2020) and secondary packaging (i.e. BB END OCT 2020 indicating Best By the end of October 2020) to give consumers increased visibility into the freshness of our products and create an easier indicator for your teams’ rotation of product.” 

As part of this move toward more product transparency, they will also begin rolling nutritional labeling later this year “to provide consumers with details on calories, carbohydrates, protein, fat, and ABV (or ABW as required by state law) consistent with TTB’s guidelines.” Ingredient information will also be available on brand websites.   

CORONA MORE THAN QUADRUPLED ITS SHARE OF MEXICAN BEER ON DRIZLY IN LAST FEW WEEKS (AND OTHER INSIGHTS)

Yesterday, we shared recent buoyant trends from e-commerce bev alc platform, Drizly. They’re up triple-digits over base (even over Super Bowl Sunday) in recent weeks, amid COVID’s shuttering of brick-and-mortar bar and restaurant occasions.

In part two of that interview, Drizly Head of Consumer Insights Liz Paquette shares some interesting regional trends, and consumer base demographics — which largely haven’t changed in the last few weeks, though they’re adding more users. 

But first, we missed one brand trend highlight in yesterday’s writeup. Indeed, it’s a headliner.

On Drizly, “Corona Beer has more than quadrupled its share of the Mexican beer category in the last few weeks,” the company shared with BBD. So apparently, the namesake “Coronavirus” isn’t hurting the giant Mexican import at all. (No such thing as bad press.) 

Beyond that: 

WHAT ABOUT REGIONAL BLIPS? We asked Liz if certain regions were surging over others on Drizly, or seeing marked trends in the last few weeks. Overall, it’s staying pretty consistent, though some areas do have their “flares” in shorter time snaps. 

“I think people are definitely reacting very much to what’s happening day-to-day,” said Liz. She offered Seattle, where COVID-19 took hold before much of the rest of the country, as an example. 

“Pretty close after the lockdown [there] was announced, we saw a big surge and then a little bit of a decline — still very, very high above what we would have expected to see at that point in time,” she noted. “But we’ve seen a resurgence again in this past week, and they’re one of the markets where we’ve seen the most growth. It’s kind of ebbing and flowing across the board.

“But from a category and brand perspective, we’re not seeing major regional variations.” There are some exceptions: For example, DC seems to “actually be buying less hard seltzer than other areas,” and  more beer.  

HAS THEIR BASE SHIFTED DURING COVID? Liz says their base of consumers has increased significantly in recent weeks as they seek booze without having to leave home.

“Typically, new buyers on Drizly account for about 15% of sales. This last week in particular on average, we were seeing that number up about 1000% and making up about, I think it was about 40% of total share of buyers,” she said.

“New buyers are actually driving a very large percentage” of Drizly business, “which means more people are discovering alcohol, e-commerce and delivery as an option.” 

Their consumer type, however, has largely stayed the same.  “There have been very slight shifts in age,” but typically their biggest audiences is “millennials in primarily urban areas,” though there are definitely some older folks on the platform. (Apparently a 100-year-old wrote them a nice letter recently.) 

She says it’s a similar story with retailers. “Even leads, from a partner perspective, are up something like 300% to 400%,.” Their retail partners are typically independent liquor stores but they do work with some chains. A lot of expressed their thanks to Drizly, who they say is helping keep them in business at the moment. 

Watch the entire interview on BeerNet TV here>>

A LOOK AT THE NEW TOP 50 CRAFT BREWERS

Yesterday, the Brewers Association released their annual tally of the Top 50 U.S. Craft Brewing Companies. 

But as we pointed out in CBD yesterday, the unveiling of the always-anticipated list just felt a little different this year, given all the current craziness. And the BA hinted as much in the release with chief economist Bart Watson saying: “Although 2020 will be a markedly different year than 2019 for the craft brewing market, these companies are well positioned to help the craft category weather the current market uncertainty and rebound with the flavor, variety, and innovation that beer lovers have come to expect from small brewers.” 

We couldn’t agree more, so without further ado let’s take a look at the latest lineup for the Top 50 Craft Brewers in 2019.

TOP TEN LARGELY UNCHANGED. The first nine spots on the new list belong to the same craft brewers as 2018. But we have a switch up at the ten spot, with Artisanal Brewing Ventures coming in to take the spot from Deschutes Brewing, who now sits at the #11.

There’s plenty of movement after that, but that movement is mostly owed to brewers moving up or down a couple spots over last year. So we pored over the list to pull out the handful of brewers that moved up or down 5 or more spots from last year. Here’s what we got:

THE MOVERS. Georgetown Brewing continues to climb up the list. The Seattle brewer, which made its debut on the Top 50 last year (the 2018 list) at #41, skipped ahead nearly ten spots in the latest list to #33. Indiana’s Three Floyds Brewing jumped eight spots in the latest list, moving from #39 to #31. Gordon Biersch Brewing Co. also made a nice leap, hopping from the 37 spot in 2018 to the 32 spot in 2019. California’s Lost Coast Brewery advanced a handful of spots too, jumping from #47 to #41 on the latest list.

AND DROPPERS. Shipyard Brewing tumbled over a dozen spots in the latest list to #42 on the latest list. Long Trail Brewing continues to slip further down the list – it dropped seven spots in the list prior to #31 – and fell six spots on the latest to #37. 

ONLY ONE NEW BREWER TO THE LIST. We only spotted one newcomer to the list this year, Two Roads Brewing out of Stratford, Connecticut, who sat at the 47 spot. With one new brewer to the list that means a single brewer fell out of the Top 50 — Utah’s Uinta Brewing, which held the 42nd spot in 2018.

BEER BRIEFS:

FLORIDA GOV ISSUES 30-DAY STAY-AT-HOME ORDER. Yesterday, Florida Governor Ron DeSantis issued a statewide stay-at-home order, as the local virus case load reached roughly 7,000. Per the New York Times, by now, “37 states have adopted statewide orders for people to stay at home, including most recently Georgia and Mississippi.” Texas is a notable holdout, though certain cities have had such orders.

————————————–

NEED SOMETHING TO WATCH WHILE EXERCISING?  Or on your daily walk with the dog? Check out our free COVID-19 focused YouTube channel, search for schuhma.   

Until tomorrow,

Harry, Jenn and Jordan

“The future ain’t what it used to be.”

– Yogi Berra

———- Sell Day Calendar ———-

Today’s Sell Day: 2

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