welcome to ccba’s spring welcome to ccba’s fall members … · 2018-12-10 · the bwc company...
TRANSCRIPT
The BWC Company
Welcome to CCBA’s Spring Members Conference
S A N D I E G O, A P R I L 8 - 1 0 , 2 0 1 8
Welcome to CCBA’s Fall Members Conference
S A N TA R O S A , D E C E M B E R 2 0 1 8
The BWC Company
The Changing Landscape of Craft
Beer: Retail Opportunities & Pitfalls
The BWC Company
AGENDA
• State of the Union
• Misalignment of Growth Strategies
• Beer’s Slippery Slope of Decline
• WHERE is the Growth?
• Next Steps
The BWC Company
State of the Union
• Beer Continues its Volume Decline for Another Decade
• Old, Tired, Mature Brands Can’t Stop Bleeding
• “Farm Team” of Consumers Think “Alcohol is Evil”
• NO Brand Loyalty……...Seek Memories, Adventures and Socializing
• Tank Banks Are NOT Going Away – Direct Threat to 3-Tier
• Brewery Landscape Continues to Grow…as Does Consumer Choice
• POT is NOT Good for Beer and it Will Expand its Presence
• Misalignment of Growth Strategies Erodes Unity and FOCUS
• Branded Stories Build Trial, Repeat and Loyal Consumer Base
• Retailers and Consumers Seek Flavors, LOCAL Craft, Imports and
INNOVATION…..”What’s New Today?”
The BWC Company
History of Innovation• DG Yuengling…….America’s Oldest Brewery (1829)
• Budweiser…..Iconic Advertising & Beechwood Aging
• Corona Extra……Find/Make Your Own Beach
• Coors Light…….1st Brand to Promote Use of Rocky Mountain Water
• Mike’s Hard Lemonade……1st FMB
• Samuel Adams Lager……1st National Craft Beer
• Stella Artois…….1st Brand to Use Packaging/Glassware to Build Brand
• Dos Equis……..Most Interesting Man Alive Campaign
• Miller LITE……1st Low Calorie Premium Beer
• Smirnoff Ice…..1st Spirits-Branded PAB
• Michelob Ultra…… 1st Health & Wellness Aspirational Brand
• Sam’s Mix-6…..1st Craft Variety Pack
• Rodenbach…..1st US Belgian Sour Beer
• Fat Tire……1st Sustainable Brewery and Brand
• Dale’s Pale Ale……1st Craft in a Can
• Founder’s All Day IPA…….1st Sessionable Craft in a 15pk
• Woodchuck Cider…..1st National Gluten-Free Cider in America
• Treehouse Brewery…..1st 60k bbl Brewery Tank Bank
The BWC Company
Why is Beer in Decline?
Wine & Spirits
SKU-mageddon
Health &
Wellness
Higher ABV
DUI
Legislative
ChangesMature Brand
Declines
Shelf Space
Shrinking Per Capita
Consumption
Declines
Lack of
Leadership?
Tank
Banks
Growth
Beer PTC vs
Bev-Alc
Poor
Advertising
Service
Levels
Deteriorate
Poor
Quality
Demographics OOS’s
On Fast-Movers
Premium Light Beer
Commodities
Eroding/Changing
Consumer Base Loss of
FOCUS
Too Many
Choices
Franchise
LawsConsolidation
Innovation?
Beer is BAD
Industry
Divisiveness
Misaligned
Growth Goals
BIG is
BAD
Mixed Drink
RomanceNo Category
Loyalty
CANNABIS
The BWC Company
2018 3-Tier Growth Strategies
The BWC Company
2018 3-Tier Growth Strategies
BREWER
SPLIT HOUSE
1. Direct to Consumers
2. Line Extensions
3. Contraction/Expansion
4. Packaging
5. Distributor FOCUS
6. Acquisitions/JV’s
7. Price Discounting
8. Brand Incubation
9. Retail Presence
10. Add/Cut People
DISTRIBUTOR
CUTTING COSTS & FOCUS
1. FOCUS on $-Makers
2. NA Additions
3. Reduce OOC Beer
4. Shelf Space = Sales
5. Reduce Brewers/SKU’s
6. Improve Efficiencies
7. Territory Expansion
8. Logistics & Technology
9. Wine & Spirits
10. Retail Execution
RETAILER
PROFITS & MARGIN
1. INNOVATION
2. High-End Focus
3. Price
4. Promotions
5. Shopper Loyalty
6. Reduce OOS’s
7. 1st to Market
8. Local Spotlights
9. Cut SKU’s
10. Merchandising
The BWC Company
63 66 71 68 65
1,099 1,118 1,114 1,045 940
148 143 148 150 146
5,667
6,903
8,1788,942 9,077
87 83 76 63 54268
308 368 372411
376532 664 755 773
25 26 23 25 231 1 1 1 1
2014 2015 2016 2017 YTD 2018
Premium Import Sub Premium
Craft Super Premium FMB
Cider Non Alcoholic Assorted
Total Brands
7,734
Total Brands
9,180
Total Brands
10,643
Total Brands
11,421
Beer Brands by SegmentTotal U.S. Multi Outlet + Conv
Source: IRi Advantage YTD Ending Jul 15, 2018 *updated quarterly
Total Brands
11,490
The BWC Company
546 548 538 529 522
2,096 2,131 2,083 1,998 1,843
713 688 665 658 641
8,130
9,725
11,33412,245 12,259
304 285 262 236 229
566 664753
755799
543 726
900 1,002 1,012
66 67 62 61 581 1 2 2 1
2014 2015 2016 2017 YTD 2018
Premium Import Sub Premium
Craft Super Premium FMB
Cider Non Alcoholic Assorted
Beer SKUs by SegmentTotal U.S. Multi Outlet + Conv
Total SKUs
12,965
Total SKUs
14,835
Total SKUs
16.599
Total SKUs
17,486Total SKUs
17,364
Source: IRi Advantage YTD Ending Jul 15, 2018 *updated quarterly
The BWC Company
Where is the Growth Today?
The BWC Company
Beer Segment Dollar Share & TrendsTotal U.S. Multi Outlet + Conv
Dollar Share of
Total Beer Category
Dollar Share of Total
Beer Category Chg YA
Beer Category Dollar Sales % Chg YA = +1.7%
Premium + Sub-Premium = 51.4% of Total Beer $
PREMIUM36.3%
IMPORT20.0%
SUB PREMIUM
15.1%
CRAFT11.7%
SUPER PREMIUM
8.0%
FMB7.3%
CIDER1.2%
NON ALCOHOLIC
0.3%ASSORTED
0.0%
(1.9)
1.1
(0.5)
0.1
0.7
0.4
0.1
(0.0)
(0.0)
PREMIUM
IMPORT
SUB PREMIUM
CRAFT
SUPER PREMIUM
FMB
CIDER
NON ALCOHOLIC
ASSORTED
Source: IRi Advantage YTD Ending Aug 26, 2018
The BWC Company
Beer Segments (Dollar Chg YA 000) – Curr YTDTotal U.S. Multi Outlet + Convenience
$403,105
$344,723
$200,003
$132,352
$60,984
$28,952
-$323
-$10,926
-$59,170
-$293,487
BEER
IMPORT
SUPER PREMIUM
FMB
CRAFT
CIDER
NON ALCOHOLIC
ASSORTED
SUB PREMIUM
PREMIUM
$23,829,562,245 1.7% 998,133,743 -2,158,746 -0.2%
$4,778,041,577 7.8% 153,903,284 7,960,028 5.5%
$1,919,556,574 11.6% 69,821,738 6,053,605 9.5%
$1,738,426,960 8.2% 52,062,679 4,684,209 9.9%
$2,787,811,580 2.2% 74,627,785 766,303 1.0%
$290,865,516 11.1% 7,496,494 595,366 8.6%
$73,423,282 -0.4% 3,017,467 -78,811 -2.5%
$2,751,682 -79.9% 66,087 -273,122 -80.5%
$3,588,606,584 -1.6% 227,384,766 -2,878,433 -1.3%
$8,650,078,489 -3.3% 409,753,442 -18,987,891 -4.4%
Dollar %
Chg YA Case Sales
Case %
Chg YA
Source: IRi Advantage YTD Ending Sept 2, 2018
Dollar Sales
Case Sales
Chg YA
The BWC Company
3,202.7%
880.4%
568.5%
486.4%
304.6%
195.0%
194.6%
155.2%
144.6%
133.6%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
81.7%
81.2%
77.0%
67.5%
55.4%
46.1%
44.7%
CORONA PREMIER
BUD LIGHT LIME WATER MELON RITA
SMIRNOFF SPIKED SPRKLNG SLTZR VPK
WHITE CLAW HRD SLTZR VPK
BLUE MOON WHITE IPA
TRULY SPIKED & SPRKLNG VPK
SOL
SPIKED SLTZR ASSORTED
WHITE CLAW HRD SLTZR BLACK CHERRY
CORONA FAMILIAR
BUD LIGHT ORANGE
MICHELOB ULTRA PURE GOLD
ANGRY ORCHRD ROSE HRD CIDER
TRULY SPIKED & SPRKLNG BRY MXPK
BUDWEISER AMBER LAGER
SIERRA NEVADA HAZY LITTLE THING IPA
SAMUEL ADAMS SAM 76 LAGER ALE
ARNLD PLMR SPKD H&H ICD TEA LMNADE
SMIRNOFF ICE RED WHITE AND BRY
MODELO CHELADA TAMARINDO PICANTE
ELYSIAN SPACE DUST IPA
CIGAR CITY JAI ALAI IPA
WHITE CLAW HRD SLTZR RUBY GRPFRT
MICHELOB ULTRA LIME CACTUS
NEW BELGIUM RAMPANT IMPERIAL IPA
Dollar
Sales
Dollars
Chg YA
Case
Sales
Case %
Chg YA
Cat
Wtd
Dist
Cat
Wtd Dist
Chg YA
Top Emerging Beer Brands (Dollar % Chg YA 000)Total U.S. Multi Outlet + Convenience
$97,110,341 $94,170,011 3,003,386 3231.5% 85.9% 82.5%
$11,467,471 $10,297,813 358,669 817.6% 42.3% 35.7%
$11,482,869 $9,765,190 378,830 563.1% 22.3% 13.6%
$62,185,552 $51,581,485 2,042,528 479.7% 46.0% 26.0%
$11,561,088 $8,704,024 316,452 293.3% 36.5% 8.7%
$37,377,011 $24,706,244 1,241,340 206.9% 40.9% 16.7%
$15,133,056 $9,996,228 480,989 155.6% 56.2% 38.3%
$21,926,842 $13,334,529 707,142 162.6% 37.8% 19.6%
$26,716,873 $15,794,875 722,290 140.8% 42.2% 11.6%
$139,928,120 $80,036,215 4,106,087 139.6% 56.9% 13.4%
$49,861,425 $49,861,425 1,673,275 77.5% 77.5%
$33,443,011 $33,443,011 965,041 63.5% 63.5%
$29,752,337 $29,752,337 797,261 56.9% 56.9%
$20,349,744 $20,349,744 674,735 25.0% 25.0%
$14,214,623 $14,214,623 467,872 52.5% 52.5%
$13,949,597 $13,949,597 364,148 33.6% 33.6%
$13,887,205 $13,887,205 405,623 47.3% 47.3%
$13,167,543 $13,167,543 393,581 52.7% 52.7%
$13,983,926 $6,287,030 405,882 83.0% 31.3% 5.7%
$14,990,690 $6,717,332 411,984 80.9% 32.1% 8.6%
$32,548,013 $14,162,348 658,747 82.3% 48.4% 12.6%
$14,400,369 $5,804,504 333,096 68.6% 17.4% 8.3%
$11,180,222 $3,983,873 301,228 51.1% 33.3% 5.3%
$48,866,721 $15,412,071 1,625,814 44.1% 46.3% 6.2%
$19,212,484 $5,934,518 496,150 36.3% 25.3% 2.7%
Source: IRi Advantage YTD Ending Aug 26, 2018
* Brands with over $1,000,000 sales ranked by Dollar % Chg YA
Import – 4
Craft – 6
FMB - 11
The BWC Company
$186,044
$184,808
$98,486
$82,800
$54,975
$52,088
$35,334
$30,962
$26,008
$22,584
$22,032
$19,707
$16,653
$16,024
$15,057
$14,606
$14,515
$14,412
$14,224
$14,123
$14,118
$13,868
$11,386
$10,775
$10,508
MODELO ESPECIAL
MICHELOB ULTRA LIGHT
CORONA PREMIER
CORONA FAMILIAR
WHITE CLAW HARD SELTZER VPK
BUD LIGHT ORANGE
MICHELOB ULTRA PURE GOLD
ANGRY ORCHARD ROSE HARD CIDER
TRULY SPKD & SPARKLING VPK
KEYSTONE LIGHT
TRULY SPKD & SPARKLING BERRY MXPK
TWISTED TEA ORIGINAL
WHITE CLAW HARD SELTZER BLCK CHRY
MICHELOB ULTRA LIME CACTUS
BUDWEISER AMBER LAGER
SIERRA NEVADA HAZY LITTLE THING IPA
ELYSIAN SPACE DUST IPA
SAMUEL ADAMS SAM 76 LAGER ALE
CORONA EXTRA
NATTY DADDY LAGER
SPKD SELTZER ASSORTED
ARNLD PLMR SPKD H&H ICD TEA LMNADE
FOUNDERS ALL DAY IPA
BUD LIGHT LIME WATER MELON RITA
SOL
Dollar
Sales
Dollar %
Chg YA
Case
Sales
Case %
Chg YA
Cat
Wtd
Dist
Cat
Wtd Dist
Chg YA
Top Growth Beer Brands (Absolute $ Chg YA 000) – YTDTotal U.S. Multi Outlet + Convenience
$1,157,198,735 19.2% 37,881,379 16.0% 94.7% 1.2%
$1,284,371,656 16.8% 48,549,417 14.6% 98.8% 0.6%
$101,577,369 3185.8% 3,144,457 3216.6% 86.0% 82.5%
$144,638,838 133.9% 4,246,055 140.0% 56.9% 13.4%
$66,458,059 478.8% 2,184,018 474.2% 46.7% 25.9%
$52,087,512 1,748,923 78.1% 78.1%
$35,333,752 1,019,905 63.9% 63.9%
$30,961,985 830,037 57.2% 57.2%
$39,651,787 190.6% 1,318,244 202.6% 41.1% 16.5%
$305,067,936 8.0% 21,110,920 9.3% 79.3% 1.4%
$22,031,788 730,744 25.7% 25.7%
$129,677,552 17.9% 4,130,554 16.2% 78.5% 5.6%
$28,230,451 143.8% 763,967 140.4% 42.5% 11.5%
$50,947,243 45.9% 1,696,689 43.7% 46.5% 6.2%
$15,056,996 496,022 53.4% 53.4%
$14,606,010 381,111 33.8% 33.8%
$33,614,968 76.0% 680,683 81.2% 48.6% 12.4%
$14,411,910 421,408 47.5% 47.5%
$1,198,607,081 1.2% 36,487,714 -0.9% 99.8% -0.0%
$48,884,262 40.6% 3,234,346 48.4% 36.8% 5.9%
$23,300,790 153.7% 752,342 161.4% 38.6% 20.2%
$13,868,202 414,735 53.0% 53.0%
$43,113,607 35.9% 1,516,496 37.0% 44.9% 10.5%
$11,989,153 887.4% 375,311 822.3% 42.7% 36.0%
$15,810,324 198.2% 502,129 158.6% 56.4% 38.5%
Source: IRi Advantage YTD Ending Sept 2, 2018
IMPORTS – 5
FLAVORS – 9
BFY – 7
CRAFT - 3
The BWC Company
Game Plan Going Forward?
The BWC Company
Craft Brewer Strengths & OpportunitiesCraft is CLEARLY NOT healthy in non-reported IRi / Nielsen trade channels!
1. Expanding tasting room presence (Bigger, Multiple Locations)
2. IPAs – Flavors, Packaging, New Style Variants (Brut), Mix-Packs
3. Flavors Attracting NEW Shoppers to Beer
4. Rotational & Special Releases Keep Brewery Top of Mind and In The News
5. Variety Packs (Rotating, New / Exclusive Brands)
6. Brewery-only Releases → 4/16, 375mL, 500mL Sold ONLY at Tasting Room➢ Social Media Presence / Drives Brand Awareness
7. LOCAL is still a Critical Element for Building Loyalty
8. Experience, Adventure, Social Gathering Points
9. Flexibility & Nimbleness to React Quicker to Consumer Demands
10. Diversification beyond Beer → Spirits, Vineyards, Restaurants, Taprooms, Brewpubs
11. Tank Banks (Margin, Profitability, Innovation & Incubation)➢ BWC estimates ~4MM BBLs sold direct to consumer
12. Inelastic pricing environment (Room to Grow)
13. Craft (Ownership) Personalities are a Strong Marketing/Sales Advantage
14. Craft Consolidation (ABV), Collaborations and Social Media (Sierra Nevada) Strengths
15. Craft Being Primarily Privately Held does NOT Need to Report Quarterly Earnings and
can Make Better Long-Term Business Decisions and Not Rely on Dropping Prices to
Achieve a Wall St. Expected Volume Target
The BWC Company
Recipe for Success
1. Quality – Beer, Package, Marketing, Message
2. Math Skills – ABP’s that Make Sense
3. Compass – Have a Plan on Where you Want to Go and How you want to
get there
4. People – Hard-Working, Ethical, Loyal,
5. Points of Differentiation – What Makes Your Brewery/Brands Unique
6. Branded Story – What is YOUR Message
7. Zig-Zag – Are your Growth Strategies/Plans Aligned with your Customers
8. Look in the Mirror– Who Does it Better and How Can you Adapt
9. Portfolio Diversification – Flagship + Flankers
10. Crystal Ball – Think Ahead, Zig when others Zag
11. Homework – WHY are People Drinking your Beer, How Often, Switching
12. Don’t Be a Quitter – You are NOT Entitled to WIN
13. Tape Measure – Measure what Needs to be Done
14. Thermometer – Prioritize Your Work
15. Bifocals – FOCUS on what Needs to get DONE
The BWC Company
1,500
2,000
2,500
3,000
3,500
4,000
Total Craft – 10 Year Forecast
TOTAL CRAFT
Volume (000)
Source: IRi Advantage Pro 52 w/e Jan 22, 2017
Total US – All Outlets Combined
111,420.9
127,519.7
144,360.8
100,000
120,000
140,000
160,000
180,000
200,000
CY 2016 +5 Years +10 Years
TOTAL CRAFT
Volume (000)
% Vol. Chg vs. CY 2016: +14.4% +29.6%
Compound Annual Growth Rate: +2.7% +2.6%
Over the next 10 years, the Craft segment could see volume
sales grow by roughly +30% if annual trends continue
The BWC Company
Welcome to CCBA’s Spring Members Conference
S A N D I E G O, A P R I L 8 - 1 0 , 2 0 1 8
Welcome to CCBA’s Fall Members Conference
S A N TA R O S A , D E C E M B E R 2 0 1 8
The BWC Company
The BWC Company24
The BWC Company
Welcome to CCBA’s Spring Members Conference
S A N D I E G O, A P R I L 8 - 1 0 , 2 0 1 8
Welcome to CCBA’s Fall Members Conference
S A N TA R O S A , D E C E M B E R 2 0 1 8