We talk a lot about how the American beer business is doing. It’s the whole point of the column, really. Yet the weekly onslaught of news — Molson Coors boycott! Tilray Brands ripoffs! Kroger-Albertsons megamergers! — can obscure the bigger picture. Today, Hop Take is rolling out its first-ever Beer Business Report Card, a quarterly wellness check on the industry based on scan data, regulatory developments, and indelible ~vibes~.
Just like high school (where nobody has ever encountered a beer, of course, because that would be illegal) we’re assigning letter grades in each subject in our curriculum, curated by your humble Hop Take columnist. Unlike high school? Well, everything else, basically. Let’s review.
Subject: Government
Grade: A-
Comments: The beer industry reached a milestone this quarter with the introduction of the CHEERS Act, which would convey tax benefits to bars and restaurants for installing or upgrading their draft beer systems. Sure, the bill isn’t perfect, but what bill is? We’re encouraged to see a creative approach to the federal legislative process — especially considering the industry also had to file comments with the Treasury Department about labeling requirements and brace for a government shutdown that never came this quarter. This grade also reflects new franchise law reform in Wyoming, the quick defeat of that harebrained bill in Tennessee to ban cold beer, and the much-improved performance in February’s federal tax-paids, which reached their highest levels since spring 2021 this past quarter. Can’t have a government without taxes!
Subject: Fluid (Sales) Dynamics
Grade: B-
Comments: The industry started the quarter a little slow, but notched its first expansionary Beer Purchasers’ Index for 2024 in March. We’ll look for consistent improvement on that front moving forward. Of course, this was also the quarter that results came back on the industry’s disappointing performance in 2023, which is significantly depressing this grade (and also me; you think I enjoy the constant bummers?!). Yes, Anheuser-Busch InBev’s disgraceful extra-curricular conduct is partially to blame, but so is the over-reliance of many large and midsized industry players on hard seltzer, the continued losses from which helped to hurt the category last year. Speaking of over-reliance — Modelo and the other Mexican exchange beers can’t do everything. Inflation crept back up a bit this past quarter, too, and Circana dropped a report indicating beer is losing retail displays. Neither factor is the industry’s fault, but it’ll have to find a way to overcome these challenges regardless.
Subject: Innovation Lab
Grade: D-
Comments: We’re not just unimpressed, but alarmed. What happened to this industry last quarter? Is everything OK at home? Launching spirits-based versions of existing flavored malt beverages is just lazy, reactive work (looking at you, Mark Anthony Brands and Boston Beer Company). Years into the soft-to-hard crossover product land rush, it’s clear that the industry is waiting for the next big thing to come to it, rather than the other way around. Even the Voodoo Ranger release this quarter was a head-scratching dud, and Tilray Brands unveiled a slate of “new” ideas so laughably copied off others’ work that you kinda gotta hand it to ‘em. For this quarter’s biggest beer-advertising event, the Super Bowl, Molson Coors recycled an old campaign and ABI stayed gun-shy. (MC’s usually sharp marketing department actually self-plagiarized twice this quarter!) The industry seems stale, listless, and not excited about the work — no way to be, with the spirits business looking for any opportunity to give it a swirlie these days.
Subject: Social Studies
Grade: C+
Comments: Let’s start with the positives. The Federal Trade Commission moved to block the Kroger-Albertsons megamerger last decade, which the Brewers Association (BA) in particular spoke out against. Good! Same goes for an appellate court’s ruling to uphold Constellation Brands’ earlier victory against ABI in the “is hard seltzer beer” lawsuit of yesteryear; we didn’t need to rehash that whole thing again. Not one but two craft breweries recognized their unions voluntarily, too, which was a welcome deviation from the norm. But the industry showed plenty of ass as it navigated the broader civic landscape last quarter. ABI continued Bud Light’s supposedly apolitical rightward tack and dragged out negotiations with 5,000 Teamsters until nearly the last minute. MC has been stonewalling its striking Teamster workers in Fort Worth, using scab labor and offering “insulting” raise increases rather than bargain a fair contract. BBC yet again went after former employees over noncompete clauses — what happened to working and playing well with others?
Subject: Craftology
Grade: C
Comments: Most of the grades above are for things that the industry’s biggest players did or didn’t do, but we’d be remiss not to give some special attention to the recent fortunes of America’s 10,000 craft breweries. (After all, the industry isn’t a monolith, and no, that doesn’t undercut the entire gimmick of this column, why would you say that?) The formerly booming segment has had a rough couple years, and the last quarter certainly followed the trend to some extent, with bankruptcies and layoffs and wind-downs across the country. Preliminary figures from the BA suggest that the segment will reach equilibrium on openings and closings soon, if it hasn’t already. HomebrewCon was put in detention (temporarily, at least), just like Savor before it. Only four of the top 20 craft breweries posted volume growth in 2023, according to figures presented this quarter at the California Craft Brewers Association’s annual conference. (Three, if you, like the BA, don’t count the Kirin-owned duo of New Belgium Brewery and Bell’s Brewery.) Still, we’re hopeful for a turnaround sooner rather than later. The NBWA’s BPI last month showed ordering levels for craft beer at their highest since March 2022. Sure, by that same measure, the segment is still very much in contraction — but comebacks gotta start somewhere.
🤯 Hop-ocalypse Now
Our long national nightmare (well, one of them) is over, folks. For decades, wine and spirits have dominated the beer industry in the key metric of “heistability,” a measure of beverages’ relative attractiveness to nefarious ne’er-do-wells that I just made up. Due to unfavorable value-to-volume ratio and a short shelf life, you simply haven’t seen many intriguing, dramatic, and/or international plots to steal beer over the years. But the tide is turning. Earlier this month, the Feds announced they’d taken into custody the alleged operatives of a “Beer Theft Enterprise” that marauded rail yards and wholesaler warehouses in the Northeast for two years, absconding with hundreds of thousands of dollars’ worth of beer in the process. Beer heist! On a train! This category is SO back, you guys.
📈 Ups…
The Beer Institute’s review of February 2024 tax-paids show 7.9 percent category growth by volume year-over-year, the biggest per-month uptick since May 2021… Congrats to the eight new scholarship recipients of the Michael James Jackson Foundation for Brewing and Distilling.
📉 …and downs
A longtime craft beer exporter in New York alleges that Anheuser-Busch InBev and Tilray Brands are “choking off” supply in a new lawsuit…
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