Dear Client:
This is yet another example of industry folks looking to beer distribution as their preferred route-to-market. Sazerac, makers of Fireball and SoCo, is moving from big wine and spirits distributor Republic National (RNDC) to a mixed bag of red and blue beer houses in over 20 states. Recall last summer Sazerac moved to Eagle Rock in Colorado and Columbia in Washington.
The new distributor breakdown is as follows:
Breakthru Beverage:
Florida, Arizona, South Carolina, Maryland and Washington DC
Johnson Brothers:
Indiana, North Dakota, South Dakota, Nebraska, control state brokerage in Alabama, Mississippi and West Virginia
Reyes Beverage Group:
California, Hawaii and certain counties in Texas (around Austin)
Kentucky Eagle:
Kentucky
Southern Glazers Wine & Spirits:
Alaska
Martignetti Companies
Maine, Vermont, New Hampshire
Crescent Crown, Choice Brands / Venture Marketing, Eagle Beverage
Louisiana
LDF, Capital Distributing, Fisher 59:
Oklahoma
Andrews Distributing, Reyes, Houston Distributing Company, Faust Distributing, Favorite Brands, Keg 1, L&F Distributors, Reed Beverage, GG Distributing, Giglio Distributing, Fisher 59:
Texas
Sazerac will also set up its own brokerage operations in the following control states: North Carolina, Virginia, Oregon, Idaho, Montana, Utah, Wyoming and Montgomery County, MD
Note that Sazerac is going with Crescent Crown in New Orleans but not Phoenix (Sazerac owner Bill Goldring is a partner with Bubba Moffett in those beer distributors). Also, Sazerac chose wine and spirits distributors in some markets: Southern Glazer’s gets the nod in Alaska, Martignetti in the northeast, and big wine & spirits regional player Johnson Brothers gets the brands in a variety of markets.
The moves are expected to completed by February 1. One of the reasons Sazerac gave for the moves is to increase call ratios, which has been a pain point for slower-moving spirits distributors to execute, particularly for c-stores. Note that Sazerac is also fronting malt-based versions of their popular spirits brands, most notably Fireball which has popped up in displays in c-stores and grocery where legal.
TOP 25 VENDOR IN IRI BEER MULC SCANS. In fact, Fireball has positioned the company as a top 25 beer vendor in IRI’s MULC, having sold nearly $75 million YTD in the channel. In fact, Sazerac’s malt-based sales now make it the 22nd largest beer vendor YTD in MULC, just behind CANarchy’s total sales of $81.6 million.
TOP 15 IN CONVENIENCE. In convenience, Sazerac’s surge is even more striking. There, the company’s malt-based biz ranks as the 15th largest beer vendor by dollar sales at nearly $69 million.
It has added a staggering $43.3 million in sales this year in convenience, and 0.21 points of beer dollar share in the channel. For some perspective, that’s a little more than New Belgium’s parent company Kirin-Lion has gained in the channel this year (up 0.19 points and +$40.6 million).
The only two companies that have gained more share of convenience than Sazerac this year are Boston Beer, up 0.26 points; and Constellation, up 2.44 points.
Developing…….
DECEMBER BPI HITS LOWEST LEVEL EVER
While we were gone over the break, bad news hit in the Beer Purchasers Index department. The measure (which records segment expansion or contraction via self-reported wholesaler ordering levels) reached an all-time low of 30 for December. That’s vs. a robust reading of 71 for December of 2021.
“Not only did the entire country set a new low-temperature record in December, but the Beer Purchasers’ Index also recorded its lowest index reading,” per NBWA’s announcement detailing the results. It signals storm clouds: “The December BPI shows a reading of 30, and the ‘at-risk’ inventory index of 51 marks a very pessimistic outlook for January 2023.”
IMPORTS STILL EXPANDING, BUT… In fact, imports was the only segment in expansion territory for the month, at 54. But even that was down 19 points from its prior-year reading. It’s a trend: imports tended to rank lower and lower as the months of 2022 went on, particularly in the back half.
BELOW PREMIUM SEES SECOND BEST SHOWING. After imports, below premiums fared the second best, with an index of 42, four points higher than the prior-year 38 score. This was the only segment to record a higher reading vs. the year prior.
PREMIUM LIGHTS SNAGGED THE THIRD BEST SHOWING in this set, logging a 31 — less than half its December 2021 reading of 65.
EVERYTHING ELSE WAS IN THE 20s. Some notables: Craft hit 24, “well below” its December ’21 reading of 60, but still not its all-time low (October hit 23). And FMB/seltzer fell to 26 this December vs. 36 last December — but at least it has pulled out of its recent months’ teens-level readings.
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WINTER HAS ARRIVED. I hope everybody stays safe, warm, and generally prosperous holiday season. All three of our publications will be taking our usual holiday hiatus to give our editors a much-deserved rest. Barring any breaking issue, next issue Jan. 3, 2023.
Happy Holidays and here’s to beer in a glorious new year.
In the meantime, feel free to catch up on recent episodes of our weekly podcast, Beernet Radio.
And ICYMI, Beer Summit is sold out, but there are still a few seats available for Wine & Spirits Daily Summit at the Breakers. Hope to see you in early January in warm and sunny Florida.
Until tomorrow,
Harry, Jenn, Jordan & Bianca
“What love we’ve given, we’ll have forever. What love we fail to give, will be lost for all eternity.” -Leo Buscaglia
———- Sell Day Calendar ———-
Today’s Sell Day: 22
Sell days this month: 22
Sell days this month last year: 23
This month ends on a: Fri.
This month last year ended on a: Fri.
YTD sell days Over/Under: -1
