Dear Client:
Twisted Tea’s growth apparently knows no bounds these days.
Whether it’s off-premise, on-premise, trains, planes, airports or cruises – you name it, Twisted is either moving in it or moving to it.
Indeed, the brand – which has proven to be one of the brightest spots in beer scans (ranking as the third largest dollar share-gaining brand fam in the category this year, per Circana MULC data to 12/3) – is now making strides well beyond the off-premise.
TWISTED A TOP GROWER IN ON-PREMISE THIS YEAR. Stats shared by Boston Beer with BBD reveal that the top FMB is making a mark in what is a “relatively new” channel for the brand — the on-premise. There, it ranks as the no. 1 brand in volume sales growth and distribution growth among top 30 brand fams in the on-premise, per Nielsen CGA YTD data thru 8/12, while also ranking as the no. 2 brand in dollar sales growth, during the same stretch of CGA data.
TWISTED TAKING ON TRAVEL SECTOR, TOO. In light of its recent success in the on-premise, the company is diving deeper into the channel, “setting its sights on a totally new on-premise sector: travel,” Boston Beer shared. Indeed, Twisted has struck several notable partnerships in this sector, linking up with:
- HMSHost – where the brand is now available across more than 400 HMSHost locations.
- Carnival Cruise Lines – upping its current availability from 25 ships today to the “entire fleet of Carnival Cruise ships in March of 2024.”
- Amtrak – as Twisted is now rolling out “across all Amtrak trains covering the Northeast/Atlantic region.”
- And Frontier Airlines — where Twisted is “currently available onboard [Frontier’s] entire 130+ aircraft fleet.”
MARK ANTHONY BREWING PRESIDENT, JOHN SACKSTEDER, TO DEPART COMPANY NEXT YEAR
Mark Anthony Brewing president John Sacksteder — who has been with the company for 11 years, leading their supply chain function — will be leaving the company next summer as part of a long-planned leadership transition, BBD has learned.
John will be handing the baton to another industry veteran, current SVP Manufacturing at Mark Anthony, Colin Nolan, who will assume the role of Executive Vice President, Mark Anthony Brewing on January 1st.
Recall, John led Mark Anthony through a transformative time in its supply chain as it transitioned from third-party production to company owned facilities and his impact on the business, team and culture will “forever be celebrated” at Mark Anthony, BBD has been told.
BEER VET TED WHITNEY IS TAKING DELTA-9 BEVERAGES TO A MULTI-STATE FOOTPRINT
Some BBD readers may remember Ted Whitney for his time leading sales at top craft breweries like Avery or 21st Amendment. Now he’s head of sales for Rexis, maker of Delta-9 THC beverages like Squared and 3Chi. We caught up with Ted on Beernet Radio.
Rexis is a biotech company; Ted says their Squared line was meant to be a showcase for their tech. But “now, I think it’s the best brand in the space,” says Ted. They’re in a couple of handfuls of states already, mostly with beer wholesalers.
Rexis D-9 beverages are in Massachusetts, Tennessee, South Dakota, and soon to be in Nebraska, Minnesota, Illinois, and Ohio. They’re still in New York (where regulations are changing) and Pennsylvania “should come back on” shortly, says Ted.
It’s another microcosmic brand story that the beer industry needs to follow.
Ted left beer a half-decade ago for the cannabis industry in California.
But the grass didn’t end up being greener.
“It was a hoot,” says Ted. “I got robbed a lot. It was crazy, to be honest. 2018 was … a hell of a year for cannabis. … People always talk about the grass being greener. The grass was not greener.”
Ted says he got into the craft beer industry because he loved the consumer passion and thought, “’holy cow, I can make a career out of aligning people with this beverage that I absolutely love,’” he told BBD. “And by 2018, I don’t want to say we jumped the shark, but we definitely put a hazy IPA in his mouth and just wished him the best. It was a different craft beer industry, and I thought it might be fun to look to somewhere that has exciting growth. And I saw that in cannabis.”
He entered the cannabis market with NUG, right when recreational weed was hitting the mainstream in California.
“We had a vertically integrated grower,” he said. “We were opening up retail stores, we were selling weed all over the state.” At the time, there were roughly 900 licensed accounts “and almost 400 of them were actually paying bills.” They thought they had their marketplace mapped.
“I got that rolling and, well, the cannabis market just kind of imploded on itself because of regulations. For me, that was a really valuable lesson. What I learned is that regulators don’t really know what they’re talking about. They really need guidance from the industry. They need guidance from the public.”
He’s hoping to put that lesson, along with his experience from years in the craft beer industry, into fueling the “Hemp D-9” industry (A.K.A., hemp-derived Delta-9 THC beverages).
THE D9 FRAMEWORK. Delta-9 beverages were basically made legal with the 2018 Farm Bill. That’s the short version.
We asked Ted directly if D-9 drinks are legal.
His answer? Absolutely.
“There’s nothing that says it’s illegal, and we’re working with state legislators to get this completely clarified in the laws,” he said.
Ted asserts that D-9 beverages are permitted in most states. A taxation scheme exists as well.
“The same laws exist” in almost every state for these types of products — except Idaho.
“Everybody else is cool with it to one level or another,” says Ted. “And we’re working with groups like the Hemp Beverage Alliance with the other producers inside of this space to write better legislation and open the marketplace up for everybody.”
Ted compared the Hemp Beverage Alliance to the Brewers Association. In fact, he says, it’s kind of modeled on the organization. The HBA now has more than 100 members (up from roughly 30 since March), and hopes to have a hemp fest soon.
Back to the regulation: Ted says there’s already a registration process for D-9 THC beverages in many states (like the state of Texas — we asked).
“Retailers can register with the state to sell industrial hemp,” he said. There’s even a tax program for it.
“You get an ‘okay’ from the state. The Department of Health and Department of Agriculture have worked together to create this new department and they’ve got some of the best oversight in the country for the category.”
MORE DISTRIBUTORS, RETAILERS COMING ABOARD. Speaking of big retailers carrying the products, Ted also says that Total Wine (which is speaking at the Beer, Wine and Spirits Summit) has just started selling D-9 beverages in the Tennessee market. BBD readers will recall that they started selling in Minnesota stores months ago. (Ted is pushing to get into other bev alc retailers as well, like Spec’s, the liquor Texas-based liquor chain.)
Many beer wholesalers have been enticed to sell as well. In fact, Ted says their products go “almost entirely” through beer wholesalers in their footprint.
“It’s the people I know. It’s the staff that I love. And these are exactly the brand builders that we need to be working with in these markets,” he says.
But the (multi)million-dollar question is: Could legal cannabis uproot this budding industry?
Put another way: Which is more cost-effective: Making hemp-derived THC beverages, or marijuana-derived THC beverages?
“Depends on the tax structure,” says Ted. “The real hitch in the giddyup is that, in California, to grow cannabis — anything that’s going to grow with more than 0.3% THC — you’re paying almost 78% effective taxes [the dreaded 280E provision] by the time it gets to the consumer’s hands,” says Ted.
“Inside of hemp, we’ve got sales tax and that’s it. Now we’re asking to have more taxation in the category. In Minnesota, we wrote in a 10% hemp line item that’s assessed at the retailer, and that’s what we’re putting in there.
“But because of the lower regulation, we’re just growing an agricultural commodity, and [with] the lower taxation, we’ve got a lot more room to play.”
That could end up being a bit of a Trojan Horse for the THC industry.
“I think what we’ve created inside of this industry is a path to federal legalization for all of cannabis,” said Ted. “And I see this as us writing a template that becomes federal legalization. … No pressure everybody.”
BEER BRIEF:
MICHELOB ULTRA HOSTING SUPER BOWL PARTY AT TOPGOLF IN LAS VEGAS. For the second year in a row, Michelob Ultra is hosting a Super Bowl “Country Club” party at Topgolf in Las Vegas, alongside TCL, “the official TV partner of the NFL,” per company release. The party – held on Saturday, February 10 – includes live performances by Lil Wayne and T-Pain, as well as celebrity and Hall of Fame athlete appearances.
Until tomorrow,
Harry, Jenn, Jordan, and Bianca
“The grass is always greener once you don’t have to mow a lawn anymore.” – Randy K. Milholland
———- Sell Day Calendar ———-
Today’s Sell Day: 14
Sell days this month: 21
Sell days this month last year: 22
This month ends on a: Fri.
This month last year ended on a: Fri.
YTD sell days Over/Under: +1
