The Changing Import Dynamic

Dear Client:

February has followed January’s robust Beer Purchaser’s Index with an even better showing: The NBWA-tracked measure of 60.7 far outpaced the 2018 measure of 49.

Recall this index is a measure of distributor purchases. Readings higher than 50 represent category expansion, and below that benchmark, represent contraction.

IMPORTS STILL EXPANDING, BUT NOT AS MUCH AS PRIOR YEAR. There are a few interesting dynamics within that impressive topline number for February.

Maestro — er, chief economist, Lester Jones, has a musical metaphor for the month’s dynamics. “The thing about the beer industry is that it has a certain tempo but no solid rhythm section keeping time,” he said.

For instance: Imports’ index in January saw a reading of 64 (2 points higher than the 2018 reading). While it still expanded in February, at 62, that represented a “significant drop” from the February ’18 index of 70.

So what gives? Is imports slowed growth (it’s still an expansion, but slowing) a sign of things to come?

Lester’s perspective? Imports have recently acted like the new craft, with its unbounded growth. And it may start to act more like craft in slightly curtailed trends.

“Imports have hung in the 60-70 range for BPI for a long time now,” he told BBD. “I would not be surprised if imports follow the pattern of craft. Craft operated in the same higher range as imports in 2015-2016, then struggled in 2017 but then found a new equilibrium in the 50-60 range in 2018.”

Something to watch.

Speaking of craft, that had a reading of 55 for February, a point below the prior year.

PREMIUM LIGHTS, REGULARS DO MUCH BETTER (STILL CONTRACTING) Premium lights and regulars posted higher readings — in fact, premium lights saw an index of almost 43 in February, about 10 points higher than the prior year. Below premiums were also up three points, to 36.

AND FMBS KNOW NO BOUNDS. And FMBs just keep blowing the roof off prior results. Maybe some has to do with summer pre-loading, but FMBs registered an index of 71 for the month, a full 20 points higher than the prior year, and higher than January’s reading of 66.   


IRI numbers to 2/24 have come in, and they seem to match up with recent Nielsen readings: YTD and 12-week trends are pretty robust for beer, showing the category up roughly 3.8% in dollars and more than 1% in volumes. That outpaces the 2.2% 52-week growth trend. But the most recent four weeks see beer dollars are up only about 1%, and volumes dip into negative territory (also 1%). This all in multi-outlet and convenience readings.

Year to date, domestic premium dollars are down 2.4%, while imports are up a strong 8.6%. Sub premiums are down 0.6%. Craft is up almost 4%, super premiums are up 16.8%, and FMBs up 22.6%.

CRAFT, FMBS LOST LEAST IN THE 4-WEEK PERIOD. Notably, while most segments posted at least a couple percentage points less growth in the four-week period, craft and FMBs lost the least momentum from the YTD trends vs. the 12-week period: craft goes from 3.8% growth to 2.2% growth, while FMBs go from 22.6% growth to 21% growth. Meanwhile, domestic premiums double their losses from the YTD to four-week period, where they’re down 4.8%.

MILLER LITE POSITIVE! AND COORS LIGHT TRENDS NOT TERRIBLE. While Bud Light is down almost 4% in dollars YTD and for the latest 12 weeks, and down more than 6% in the latest four-week period, Miller Lite dollars are actually up almost 2% YTD, and flat the latest 4-week period (up 1.5% for 12 weeks). Coors Light was down 1% YTD, and only -0.8% for the 12 weeks, though down 3.6% for four weeks.

CORONA DYNAMICS: FAMILIAR, PREMIER BRING UP THE REAR. Also of note, while Corona Extra is up 2.7% YTD, it’s down 2.2% for the four weeks, and up just 1.4% for 12 weeks. And Corona Light is down double digits for all periods.

But get a load of Corona Familiar, which, at $30.7 million dollar sales YTD, is already bigger than Corona Light. Familiar is up 52% in dollars, and already 0.65 share of beer. It’s still a fraction of Corona’s $212 million sales YTD but it’s certainly an impressive grower with upward trajectory.

And it’s not alone. Its smaller primo, Corona Premier, is a little under $20 million in sales YTD, about the size of Bud Light Chelada. But it’s growing a somewhat silly 2000-plus percent, at 0.42 share, most of it gained recently: It’s up 0.40 share vs. YA.


Craft Brew Alliance chief Andy Thomas addressed the “will they or won’t they” question on yesterday’s CBA earnings, that of course being whether Anheuser-Busch Inbev will make a qualifying offer on CBA. (Recall such an arrangement was announced back in 2016 [see BBD 08-24-2016]; the time limit for ABI to make a play is almost up).

Before getting into the thick of it, Andy noted that their “relationship with ABI continues to be healthy, productive and mutually beneficial,” pointing to their work together in bringing the CBA portfolio to retailers across the shared ABI wholesaler network, “the cross-brewing benefits” for CBA in Fort Collins and for ABI Portsmouth in Portland, and “the work and planning for more global expansion.”

That said, Andy took the time to remind shareholders of CBA’s “protection in the absence of a qualified offer from ABI.”

As you may recall, if ABI does not make a qualifying offer for CBA, then CBA would be entitled to the $20 million international incentive payment after the 2019 deadline. Further, ABI couldn’t force termination of any of their new agreements.

Furthermore, if ABI does not make a qualifying offer, “CBA could continue to operate independently or could then undergo a change in control — and ABI would still be required to respect the terms of all agreements, including payment of the $20 million international incentive, continuation of the master distribution agreement at $0.25 a case, continuation of the international distribution agreement and fulfillment of the contract brewing agreement.”

So “I believe the future is bright for CBA, regardless of whether that future leads to a qualified offer from ABI or if that future leads to continued collaborative independence,” Andy said.  


As sister publication Wine & Spirits Daily wrote yesterday, Total Wine & More isn’t ready to give up its fight to change Connecticut’s minimum pricing laws just yet. The retailer is now asking the full Second Circuit to hear and reverse the recent appellate court decision, also known as an en banc review.

QUICK RECAP. Total Wine filed a federal lawsuit against Connecticut in 2016, alleging the state’s practice of setting minimum prices for wine and spirits is “price fixing” and has created “artificially high price levels.” The retailer targeted three provisions it said violated the Sherman Antitrust Act: price discrimination prohibition, minimum retail resale price and the post and hold provisions.

In June 2017, US District Judge Janet Hall dismissed the case “because these provisions constitute hybrid restraints that receive rule of reason scrutiny and therefore cannot by preempted,” per court documents. Shortly after, Total Wine filed an appeal. But the appeals court decided to uphold the lower court’s ruling.

In its request for a rehearing, Total Wine outlines “three errors” made by the appellate court and the district court: 1) the decision splits the circuits on whether post-and-hold statutes and quantity discount bans are preempted by the Sherman Act, citing the Ninth and Fourth Circuits’ decisions that favor Total Wine’s stance; 2) the decision conflicts with at least one Supreme Court decision; and 3) a previous case the court relied on should be clarified as “no longer good law,” per court documents.

Alcohol Law Review notes that en banc reviews are rarely granted. Total Wine’s next option would be to take the issue up with the Supreme Court, which the retailer is no stranger to. You’ll recall, Total Wine is currently involved in a Supreme Court case against the Tennessee Alcoholic Beverage Commission [see BBD 01-17-2019].

Until Monday,

Harry, Jenn, and Jordan

“Know how to listen, and you will profit even from those who talk badly.”

– Plutarch

———- Sell Day Calendar ———-

Today’s Sell Day: 6

Sell days this month: 21

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