Dear Client:

With Memorial Day on Monday, BBD performed a spot-check of supermarket ads across the country, not knowing what to expect given these unchartered waters when it comes to a major beer holiday. 

While some of the big chains like WalMart or HEB didn’t tout any sales on beer in their weekly ads, we’re here to tell you that there’s still some interesting deals going on out there.

As always, Binny’s in Chicago is still the go-to on low, low prices.

They’re doing 30-racks of Miller High Life for $10.99 (about 36 cents a beer).

They’ve got craft brands on the cheap too, with 15-packs of Goose Island 312 going for $9.99.

They even have one of Molson Coors’ big new bets, Saint Archer Gold, selling on the low – at $9.99 a 12-pack.

And they’ve got a sweet deal on one of the hottest brands out there, Michelob Ultra, with 24-packs running for $16.99. But that wasn’t the lowest price we saw on Mich Ultra…

Nope, that came at a Fry’s in Phoenix, which was slinging 24-pack of Mich Ultra for $15.77 (or you could get 30-racks of Bud Light, Miller Lite, Coors Light for the same price).

Natty Light and Naturdays were selling on the low here too. With a 15-pack of Natty Light going for $8.99 and a 12-pack of Naturdays selling for the same price.

And like the Binny’s in Chicago, this Phoenix Fry’s had Saint Archer Gold selling for under a buck a can at $10.99 a 12-pack. 

At this same store, you could get Bud Light’s new “Peels Pack” – a 12 count variety pack that consists of Bud Light Lime, Bud Light Orange and the new Bud Light Lemonade – for $10.99 a 12-pack as well, which was a bit surprising for a brand spanking new pack.

The Peels Pack wasn’t the only new brand on the block in the circular either. The ad also touted prices for Molson Coors’ new seltzer Vizzy at $14.99 a 12-pack, and A-B’s new seltzer Social Club, at $16.99 a 12-pack.

A Smith’s in Las Vegas had the cheapest deal we saw for Bud Light Seltzer with 12-packs running for $9.99 if you brought in a “manufacturer’s digital coupon.” That was the easily the lowest price on a hard seltzer we found – most stores had seltzers priced at $13.99 or more for a 12-pack.

This same Smith’s actually had the lowest price we saw for a 12-pack of White Claw too at $12.99, but there was a hook… you had to buy at least two packs of White Claw to grab that price.

The store also had one of the best craft deals we saw with New Belgium’s Voodoo Ranger, a hot brand right now, going for $9.99 a 12-pack with a “manufacturer’s digital coupon.”

The Smith’s also had the most interesting deal we found, touting a free bag of tortilla chips for consumers who buy a 12-pack of Modelo, Pacifico or Corona for $13.99.

ANALYST MKM SUGGESTS “STZ COULD PRE-ANNOUNCE NET SALES DECLINES OF NEARLY 30%” DUE TO SLOWED PRODUCTION 

MKM now predicts a pickle for the Constellation’s summer stock, after analyst Bill Kirk (disclosure: relation to our Jenn Kirk) came across Corona products in his Texas market that seemed too recently “born” for inventory levels to be what management has previously suggested.

“In Texas, STZ production codes dated April 15, 2020 are at retail. Given the methodical FIFO inventory management (distributors/retailers), the production dates observed at retail suggest that STZ did not have 70 days of inventory for this product/package,” Bill writes. 

Now, granted, Texas is just one market – albeit an important one for Mexican imports. So Bill “encourages investors to check date codes in their local markets to see if a similar situation is developing in their area, as Texas may not be representative.”

But the big idea is that “reduced-production-period beer in market so soon suggests there were not 70 days of inventory for this product,” as chief Bill Newlands said on the last earnings call, when analysts worried about shuttered Mexico facilities. 

Bill predicts STZ summer out of stocks could happen like this: the 4/15 production code he found on his beer that was purchased on May 20 “would imply that this product (in this market) only had 35 days of inventory (as of April 15),” as one measure of days of inventory is how long it takes you to sell through it. 

“Using a clock of 35 days and assuming 50% rate of production at Nava, this product in Texas only has 17 days of inventory remaining (today) and just 11 days on June 1.” (Equation: ~Starting Days of Inventory – Days Passed (1-%Capacity) = ~Current Days of Inventory.)

Bill surmises that “even if full production returns June 1 and can reach 120%, the problem gets worse, inventory is gone on June 23, and is largely out-of-stock until July 10.” 

That’s a pretty giant bet.  

But, if it comes true, it could mean that Constellation shipments to wholesalers could be greatly reduced, and “STZ could pre-announce net sales declines of nearly 30% in 1Q.”

ON-PREMISE SALES VELOCITY IMPROVES TO -54% VS. PRE-COVID “NORM”  

Last week, Nielsen CGA offered a snapshot of consumer sentiments across a handful of states that had started to reopen the on-premise for business, including Texas, Florida, Georgia and Tennessee.

That data set found that “at least 1 in 5 consumers have already returned to the on premise despite uncertainty and limited outlets reopening.” But many still have their apprehensions: nearly a third (31%) said they’ll only return to the on-premise “when the number of COVID-19 cases hasn’t started to increase again.”

This week, the data firm is sharing on-premise velocity gains seen across their total U.S. read nationally, as states reopen slowly.

“Total sales velocity (average dollar sales per the average outlet in our measurement) in Nielsen CGA U.S. measured on-premise outlets increased by +25% from May 9 to May 16,” they said. 

“Overall velocity now stands at -54% vs pre-COVID norm; that number is up from -80% when the COVID-forced lockdown began (and is now +204% vs. March 28).” 

SOME “VAST IMPROVEMENTS” IN VELOCITY TRENDS, BY STATE. States that have started to open the on premise seem to be seeing better velocity trends. 

In Texas, velocity is now only -32% below the pre-COVID norm, as restaurants were technically allowed to reopen May 1. 

That’s a lot better than Georgia’s -46% trend vs. pre-COVID velocity, which started to reopen restaurants at the end of April. but even that state is seeing  at least “week-over-week growth of +22% and +28% over the last two weeks.”

Even in areas where “regular” on-premise activities have not resumed, and takeaway is still the norm, sales velocity is improving week to week, as consumers and retailers “continue to adapt to the new trading style”:

• New York: sales velocity is +13% from May 9 to May 16
• California: sales velocity is +13% from May 9 to May 16
• Illinois: sales velocity is +24% from May 9 to May 16

For a list of what’s open by state, check out this updated NY Times guide. 

SOME RULES FOR REOPENING COULD IMPEDE PROFITABILITY. We should note that even as the on premise starts to come back online, the many prohibitions that will accompany that move could continue to impede profitability. So recovery will likely be slow.

For example, in Texas, bars are set to reopen today. But besides the mandate to operate only at 25% capacity, patrons are also barred from sitting at the actual bar. “Seated parties should have no more than 6 people per table, and tables should be socially distanced, which could be managed by placing unoccupied tables between parties,” writes the Texas Tribune. 

This is supposed to be enforceable by the TABC. 

On the other hand, Arizona took a decidedly more laid-back approach to reopening the on-premise, back in early May.

“It helped that [our] governor did not put down strict mandates, but rather tasked the restaurant association for creating guidelines that worked,” one Truth Squadder wrote in to BBD. “This resulted in accounts being able to be more creative in how they structured their social distancing, allowing some accounts to open up at 75% – 85% capacity without sacrificing customer or staff safety.”

Admitting that the scene really depends on the part of the state, this source says bars and restaurants in his little enclave are looking quite well. 

“The restaurants and bars are, for the most part, packed to their current limits and people are genuinely excited to see other people and engage socially.” 

MSJ ON PIVOTING MOLSON COORS’ BIG BRAND MARKETING

You know you’ve reached a certain stature when you are referred to by your initials.  So it is with Molson Coors’ US chief marketer Michelle St. Jacques, who is known around beer circles simply as MSJ.  

We got MSJ on the horn to talk about how such a large CPG company as Molson Coors markets their big brands during the C-19 period without sliding into the vast swamp of maudlin or saccharine cliche like so many other big firms.  

ED. NOTE:  You’ve all seen these ads on your screens:  It starts with melodic piano music, black and white stills of unattractive people staring sadly at the camera, shots of empty stadiums and dirty streets, and the inevitable “In these trying times… (such and such conglomerate) has alway been there for you.” Ad Age created a brilliant compilation here>>.

MSJ and her team attempted to take a slightly different take, to stand out from the crowd.  Instead of saying “in these trying times”, their ad says “in these sucky times” and takes a totally contrarian and humorous view to the “we’re-all-in-this-together” trope and admits that beer can’t solve all your problems, but hey, it helps you get through them. 

“Where we’re spending, how we’re spending and the messages we’re landing, there’s been quite a bit of shifting over the past 11 weeks,” says MSJ. 

“Everything starts with the consumer, what’s happening in their world and what’s kind of happening around them. And then you kind of layer on top of that what your brand stands for. And somewhere in that intersection, you figure out what’s the right brand role you should be having in this kind of moment. And honestly, what’s the kind of value you can provide to consumers. 

ON COORS LIGHT ‘MADE TO CHILL’ EVOLUTION.  “Certainly in the case of Coors Light, as you guys well know, it was a little more straightforward, because the brand direction that we launched almost a year ago around Made to Chill, with all of us kind of needing this moment of refreshment in this kind of crazy, always on world.

“And so if you think about right now, the stress is not lower, right? It’s even higher, it’s more heightened. And so we actually have a great opportunity to be consistent with what our brand stands for, but just put it into the context of what people are experiencing right now. So the Made to Chill campaign never stopped. It’s still going as we speak and it will still continue after this, because honestly we’re really committed to that space. I mean, Harry, in January you talked about cocooning and how younger people’s behaviors are changing. And this space that we identified as Made to Chill leans into that behavior, which is only continuing. And we’re seeing it pay dividends, right? Our share is in a better place than where it’s been from a brand perspective. We’ve been getting better business results from the brand…

“And so we still believe deeply in Made to Chill and most of what we’ve done in this moment has just been about adapting Made to Chill to make sense about what was happening in people’s lives. So in social, we played on this idea of take time to chill, encouraging people to take a moment of pause in this craziness. Doing things like giving beer bread recipes, launching a line of soft clothes. We even launched a clone last week to give people a moment of a break during the craziness of the Zoom calls. So trying to find ways that our brand message still make sense in the context of what people have been doing.

“But then our bigger move from a Coors perspective was obviously around ‘America could use a beer.’ And that was built off the same insight as Made to Chill. I think what we saw was with Olive, our 93 year old Coors Light fan of the year, we saw that how people reacted to that story showed that everyone just freaking needs a beer right now. They needed a moment of pause in this crazy. And so we said, how do we kind of understand what our role is at this moment, which is maybe not to kind of fix everything, but to give people a six pack and help them kind of get through this period. And again, the reception to that campaign has been fantastic because I think people just appreciated kind of the honesty of just saying, ‘Hey, we’re a beer brand, that’s what we do. And we’d love to help you out in this moment.’

“Our Made to Chill is live and strong right now. We just launched our summer packaging and we’re going to continue to lean into Made to Chill this summer. So it’s not going anywhere right now.”

WHAT ABOUT ‘MILLER TIME’ CAMPAIGN?  Says MSJ: “Yeah, you’re totally right, Jordan [about it being skewed on-premise]. We obviously did a bit of a bigger pivot than Coors Light. Coors Light was more about kind of leaning into this space we’d already carved out. In the case of Miller Lite, when we launched back in November the Miller Time campaign, we were really pushing off against what was stopping people from getting into the on-premise and having a beer with their friends? And the idea that that type of moment is really kind of the original social media and how do we actually challenge people to put down their phones, not forever, but for a minute and grab a beer with some friends? And to your point, that message made a lot of sense in November. Given the reality of what people are faced with right now, it doesn’t make quite as much sense.

“So when we saw on-premise closing down, obviously we quickly pivoted our message. We launched our virtual tip jar right at the beginning of March to raise awareness for bar and waitstaff at that time who were out of work. And honestly those are the people who actually made Miller Time a thing, right? The community that supported us, we wanted to do something that was a real act to support them as well. And we’ve obviously been super pumped to see a lot of other companies joining in and supporting that movement. 

“But when I think about the longer term for this brand, I think the idea of still celebrating Miller Time has a role, it’s just going to be a slightly different role than maybe where we were back in November. Because we sort of said Miller Time is defined as a few buddies being together, drinking a Miller Lite, and honestly being their real, authentic self, no pretense. And we think that that idea can exist regardless of where it’s happening. And we think that there is — in this moment — people are looking for that human connection and it may look a little bit different than what it looked like prior to COVID.”

HAVE A PROSPEROUS AND MEMORABLE MEMORIAL DAY. In observance, our next issue will be Tuesday morning.

Until then,

Harry, Jenn and Jordan

“Without memory, there is no culture. Without memory, there would be no civilization, no society, no future.” – Elie Wiesel

———- Sell Day Calendar ———-

Today’s Sell Day: 16

Sell days this month: 21

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