Texas ABC Takes on Merchandising

Dear Client:

It could be the end of excessive retail merchandising as we know it in Texas if retailers and distributors are to follow a new draft “market guidance” from the TABC.

In the draft notice, seemingly out of nowhere, the Commission said it decided to “examine” merchandising activities recently, and “determined that the current services being provided to some retailers are excessive and indeed provide an unauthorized thing of value ‘service’ to a retailer,” hence this “market guidance.” We hear through nefarious backchannels that their investigation started in San Antonio and continued up I-35 to Dallas.

What exactly is crossing the line? A lot. The TABC offered up ten examples of “conduct that constitute a prohibited thing of value by a distributor to a retailer”:

  1. Excessive in-store stocking and merchandising labor (e.g., a distributor providing a retailer with 40 or more hours per week of an employee’s time)
  2. Maintaining and updating retailer inventory systems
  3. Updating computer UPC codes for store products
  4. Printing price tags and other advertising materials using retailer equipment
  5. Breaking down product packaging, stock & re-pricing single containers for end cap access and sale
  6. Repackaging breakage/damaged product incidental to distributor’s breakage
  7. General cleaning services, (e.g., mopping, disposing garbage, cleaning retailer shelves and/or product cold boxes, incidental to distributor breakage/spillage or disposable packaging related to delivery or merchandising activities)
  8. Serving as employees of the retailer (e.g., making themselves subject to a retailer’s management or disciplinary processes)
  9. Operating retailer equipment (fork lifts, pallet jacks, ladders) to store products outside of consumer-accessible shelving and overhead storage
  10. Engaging in merchandising activities outside of the retail consumer space or access points (e.g., spending time in the back store room stacking product carts/pallets and/or other retailer activities in the parking lots)

That’s not all, the TABC threw five guidelines on top of that “to ensure code and rule compliance.”

  1. Distributors may choose to provide stocking and merchandising services for a retailer beyond standard presale and product-ordering activities.  It is important to note that delivery activities are not activities that fall within the parameters of pre-sale and product-ordering activities.
  2. Retailers shall not force distributors to perform merchandising activities. In any event, distributors should generally not provide merchandising services in excess of 25 service hours per week per retailer location.  We recognize that certain times of year for example peak sale holidays may require longer service. Therefore a Distributor may provide an additional 20 service hours per week per retailer location no more than 6 times a year at the sole discretion of the distributor.
  3. A distributor’s employee is not the employee of the retailer, and should not act as one. For example, the distributor must set their employees’ schedule, and cannot allow the retailer to require that particular employees of a distributor perform merchandising services on specific days, for specific lengths of time, or at specific times of day.
  4. Distributors cannot perform certain services for a retailer at all (see the examples given above). These acts are valuable services that replace man hours for which a retailer would otherwise have to pay its employees.
  5. Distributors and retailers are prohibited from engaging in Quid Pro Quo practices resulting in unauthorized services, things of value and/or other benefits.

It is the TABC’s view that merchandising activities “should be limited to activities that enhance product accessibility to the ultimate consumer.”

WHOA, WHAT’S THIS ABOUT?  This seems like a distributor’s dream. But it’s also in response to retailer abuse of distributor personnel.  It’s true that big beer, wine, and spirits distributors have kept merchandisers/stockers in big stores like HEB, Walmart, and for the wine/spirits guys — Specs and Total Wine — on almost a constant basis.  It’s gotten to the point where distributor employees are driving retailer forklifts moving non-bev-alc products around, according to a source. “They treat them as their own employees,” our source said.

The joke in beer circles is the merchandisers keep a cot in the backroom of HEB to catch a few ZZZs before getting back to work stacking beer and cleaning floors and windows.  

It seems that merchandising requests, encouraged naturally by big brewers an importers, has gotten out of hand.  

BUD LIGHT REIMAGINES CLASSIC “REAL MEN OF GENIUS” CAMPAIGN

Can an all-time beer campaign be modernized?

Bud Light is about to find out, or do they already know? Just joking.

In this latest resurrection, Bud Light is raising the classic “Real Men of Genius” campaign from the grave. Well, sort of.

The brand has rebranded the campaign as “Internet Heroes of Genius.”

The voiceover to singing delivery is still there, the witty copy as well. But they’ve updated the persons of interest in the spots to toast to people like “Corporate Social Media Manager” and “Snapchat Lens Creator.”

The ads are no longer tailored to men either. In fact, the latest version is careful not to exclude anyone, with ads like “Person Still Using Their Middle School Email” and “Person Who Accidentally Went Viral,” whereas past spots were virtually all titled “Mr.” fill-in-the-blank: “Mr. Silent Killer Gas Passer” or “Mr. Giant Taco Salad Inventor.”

And of course, Bud Light isn’t turning to the radio to broadcast these new spots, they’re taking to the internet. Anheuser-Busch will give the new campaign “highly targeted paid support across various social platforms,” reports Ad Age. Indeed, what better place to run the “Snapchat Lens Creator” ad than Snapchat, or the “Person Who Sorts By New” spot than Reddit?

See all seven “Internet Heroes of Genius” spots that debuted yesterday here.

MOLSON COORS DREAMING OF A GREEN CHRISTMAS

Molson Coors’ first cannabis beverages could hit the Canadian market before Christmas this year, according to a recent report from Bloomberg.

Recall Molson Coors teamed up with Canadian cannabis producer Hexo in the fall of last year to produce such products.

The joint venture between Molson Coors and Hexo, called Truss, expects to deliver an array of non-alc cannabis-infused beverages – everything from water to a “beer-like product” – to Canadian shelves on December 16, when cannabis drinks go legal in the country.

“We’ll have a very large supply so we’ll be in a good position to be able to meet the demand of the marketplace and at the same time also ensure that we’re meeting the variety that the marketplace wants,” Hexo’s VP of strategic development, Jay McMillan, told Bloomberg.

EYEING AN ENTRANCE INTO THE U.S. WITH CBD. Truss reportedly wants to sling CBD-infused beverages in the U.S. too, which as you know legalized the substance non-psychoactive substance late last year. Truss has apparently put forth the goal to have CBD-infused beverages in eight states by 2020.

Until tomorrow,

Harry, Jenn, and Jordan

“We go where our vision is.”

– Joseph Murphy

———- Sell Day Calendar ———-

Today’s Sell Day: 13

Sell days this month: 20

Sell days this month last year: 21

This month ends on a: Fri.

This month last year ended on a: Fri.

YTD sell days Over/Under:  -1