Searching for Signs of #CornGate in Latest Scans

Dear Client:

For all the hoopla the Super Bowl corntroversy stirred up, there ain’t a whole lot of change in the premium light segment.

In the latest set of Nielsen data, which spans the four weeks to February 16, Bud Light is still experiencing the largest volume decline, down 7.7% for the four weeks.

Coors Light isn’t too far behind, down 5.8%.

And MillerCoors is down 1.2%, but still in positive territory YTD, up 0.7%.

What about premium light share? Wasn’t that the whole intention of the spot – for Bud Light to up its share in the segment? If so, that’s not playing out just yet. Not at all.

Bud Light was the only premium light brand to lose share in the segment for the four weeks, down 1.0pts.

Meanwhile, Coors Light’s share of premium light was flat, and Miller Lite increased its share of the segment by a point.

Kind of makes you wonder whether there’s any bit of marketing that can flip these brands’ trends – for better or worse.

With that out of the way, let’s dig in a little more to this latest set of Nielsen.


Overall, the Nielsen results for the four weeks were pretty poor with category volume down 1.6%. It would’ve been even worse had it not been for the two bright spots in beer, currently: super premiums, up 13.5%; and FMBs, up 17.8%.

Outside of that it’s pretty bleak.

Craft is down 1.6% for the four weeks, and now down 0.3% YTD.

Premium regular and premium light continue to be cemented in the red, down 7% and 6%, respectively.

Then imports are only up 1.5% for the four weeks.

Speaking of imports…

This is a four-week frame Constellation would probably like to forget. The company was only up 6%, which is about half of their YTD gain, up 11.4%.

Weighing the company down was Corona Extra and Corona Light.
Corona Extra was down 5% over the four weeks, and is now flat YTD.

Meanwhile, Corona Light is down a staggering 17.9% in the set, and now down 14.4% YTD.

Then Corona Familiar is still putting up solid numbers, up 35.4% in the four weeks, but well behind its YTD trend, up 77.8%.

Despite Corona Extra down, Corona Light sinking, and Corona Familiar winded; Corona Premier, up over 200% in the four weeks, appears to have plenty of rocket fuel left in the tank.

Still, the Corona Franchise was up 4.1% for the four weeks, also shy of its YTD trend, up 11%.


We reported Friday, after Constellation’s presentation at flagship investor conference, CAGNY, that the company is “supremely confident in its fourth leg.” That leg is of course cannabis, besides beer, wine and spirits, via its $4 billion investment in Canadian grower, Canopy Growth.

Constellation chief Bill Newlands and CFO David Klein praised their prospects with their Canadian partner to be a leader in what they project could be a $200 billion industry in the next 10 years. They project Canopy will be accretive to their earnings in fiscal 2021, and that Canopy is on “track to deliver a run rate of $1 billion by 2020 at the top line.”

But a note from Cowen Insights on Tuesday suggested that a subsequent breakout session between Constellation and Canopy left some a little less confident.

Cowen found “the tone and strategic spirit of responses” during the joint Q&A “to be less cohesive than certainly we would have liked.”
How’s that? Well, where Bill and David had offered some specific timelines to hit certain numbers with Canopy, “WEED’s CEO Bruce Linton publicly announced that offering guidance was not his preference. That’s certainly not what we would have expected in response to a presentation from the company’s largest shareholder. At a minimum, there is a diplomatic middle-ground that would have been expected, certainly at CAGNY which features almost exclusively seasoned CPG CEOs.”

Well, perhaps that’s just Bruce Linton’s bedside manner. But then Cowen went on to criticise his subsequent webcast presentation for WEED as lacking substance, “in particular around company fundamentals,” which is typically “expected” at CAGNY.

“While cannabis is new, this didn’t give the audience credit for having even a baseline understanding of the global cannabis opportunity, which we view as legacy thinking.” Then, too, Bruce’s $500 billion size of the global revenue opportunity contradicted his partner’s $200 billion outlook from the presentation prior (though both have previously offered those projections).

Despite all that, however — and admitting that they “heard skepticism from investors” given aggressive time horizons and significant improvements needed to meet goals in wake of WEED’s recent earnings report — Cowen still has STZ as a top pick, and WEED with a rating of Outperform.


The Supreme Court said Monday it won’t hear a consumer challenge against Anheuser-Busch InBev’s $107 union with SABMiller. The group had argued the acquisition was anticompetitive, despite SAB’s divestiture of MillerCoors.

“The justices’ decision came without any reasoning and cemented a Ninth Circuit ruling in August canning U.S. beer buyers’ bid to block the megadeal. The consumers had argued in their high court petition that AB InBev’s pickup of rival SAB would further constrict the country’s already concentrated beer market,” per Law360.

The outlet described the Court’s communication as a “brief order.”

The group’s counsel, Joseph M. Alioto of Alioto Law Firm, “said the justices’ decision to pass on the case” ignores its own body of case law “and clears the way for other companies to take advantage of the system.”

The lawyer even pointed to the stalled Beer Growth Initiative (which is just the sort of alliance it sounds like among the trade groups and brewers, focused on elevating beer’s “image, sales and policy” [see BBD 09-24-2018]) as evidence of anti competitive behaviors, citing this WSJ article as a means to show that “AB InBev, Molson, Heineken and Constellation Brands had been considering teaming up for a national ad campaign, and Alioto said he plans to point this out to the DOJ in a letter.”

Mused Alioto to the outlet: “Now, in the morning paper, all of these guys are getting together to coordinate their advertising … Do you think that they’re hanging around there and not talking about the price structure?”

Until tomorrow,

Harry, Jenn, and Jordan

“The average, healthy, well-adjusted adult gets up at seven-thirty in the morning feeling just plain terrible.” – Jean Kerr

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