James Beeson’s Post

Ontario Brewers: Navigating The New Retail Environment The beer industry in Ontario is on the brink of a meaningful change, the most formidable one yet. It is grappling with a decline in consumer demand, a surge in taxation (approximately 50% of beer’s price in Ontario), escalating competition, heightened retailer and consumer expectations, and a new set of retail market access rules. This environment signals a challenging period for the entire sector. Ontario’s Emerging Distribution Hurdles: Retail outlets like supermarkets and now convenience stores will become vital distribution channels for beer manufacturers, taking over from The Beer Store. This shift brings challenges. One is the added strain on manufacturers’ pricing and margins, as alternative retail stores yield lower profit margins. Brewers can anticipate retailers demanding smaller, more frequent product deliveries to cut their warehousing expenses. Retailers will also look to manufacturers for innovative merchandising ideas to help reduce store restocking costs. To prevent revenue dips from inventory shortages, retailers will consider order fulfillment rate a crucial metric in evaluating their relationship with a brewer. If a manufacturer cannot meet peak demand or promotional initiatives, a retailer will not think twice about seeking alternatives. Consequently, breweries must adapt to operate with more flexibility. Channel shifts will also demand beer makers to hone new skills in category management. Large beer packs suitable for The Beer Store do not appeal to convenience seekers. To attract these consumers, brewers must offer smaller pack sizes. A significant increase in retail outlets will compound the complexity of brewers’ supply chains and ramp up distribution costs. Organizational and Operational Transformation: Brewers must first acknowledge that their infrastructures and operational processes may no longer align with the new market conditions. For example, logistics departments may find it hard to meet the increased demands of serving the highly fragmented retail trade channel. Retailers will seek partners who can deliver the right beer to the right outlet at the right time with precision. The simpler process of distributing large volumes to central customer warehouses or stores may soon become obsolete. Charting a Course for Future Success: There is no magic bullet for the challenges confronting the beer industry. Brewers will need to synchronize their commercial, manufacturing, and supply chain functions to devise solutions that fit the new opportunities presented by the Ontario government regarding beer retailing. While it is still early days, brewers must quickly evaluate their current position, future direction, and the path to get there. At First Key, we are ready to assist, please email me directly at [email protected].

In today's CBD: Two of the largest Black-owned breweries, California's Crowns & Hops Brewing Co. and Full Circle Brewing Co., have struck a watershed alliance to leverage its members’ strengths and show up at market in a much bigger way. The new shared resources platform is dubbed “Circle of Crowns Beverage Group” (CCBG). The alliance “combines two leading Black-owned brands and centralizes production, sales and marketing between the two companies,” per announcement. Production will be centralized at Full Circle. Currently, the brands produce about 10,000 barrels collectively. It’s about “unlocking untapped opportunities” in the craft market, by "leveraging retail and venue diversity programs." Historically, Black suppliers have lacked the infrastructure to address these opportunities on a wide scale. CCBG also includes the historic Speakeasy Ales & Lagers brand, one of the oldest in San Francisco, and Sonoma Cider. "As you know, there's 9,000-plus breweries out there, and there's only 1% that are Black-owned," Arthur Moye, Full Circle founder, told CBD. "And I think, during a good period of the last half a decade or so, people have wanted to support Black-owned businesses. So you have major retailers reaching out to those 1%; you have distributors reaching out to those 1%; but then there hasn't been a structure by which they could significantly respond, because that 1% is mostly represented by people that don't have production facilities and can't create the margins and the economies of scale to sit on the shelves throughout the distribution networks of the chains." This starts to solve that. More here, we left the story open to all. https://lnkd.in/gsHErbeK

NEW: Big news for the beer industry today: one of Britain’s best-known pub companies is severing its ties with brewing after selling the remainder of its beer business to Carlsberg for £206m. The 190 year-old Marston’s said on Monday that it had agreed to offload the outstanding 40pc stake in its brewery business as part of a push to focus on pubs. Money received from the Danish drinks giant will be used to help Marston’s pay down its debts, which have recently been racking up millions of pounds in interest. Carlsberg’s move for Marston’s came alongside a separate deal for Robinson’s maker Britvic, which it has agreed to buy after submitting an improved £3.3bn offer. A previous bid of £3.1bn was rejected in June, with the latest offer representing a 7.9pc premium on Britvic’s share price last Friday. Read more via The Telegraph

𝗕𝘂𝗱𝘄𝗲𝗶𝘀𝗲𝗿 𝗹𝗮𝘂𝗻𝗰𝗵𝗲𝘀 𝗖𝗼𝗻𝘃𝗲𝗻𝗶𝗲𝗻𝗰𝗲 𝗩𝗶𝘀𝗶𝗼𝗻 𝘄𝗲𝗯𝗶𝗻𝗮𝗿𝘀 𝗮𝗻𝗱 𝘁𝗼𝗽 𝗳𝗶𝘃𝗲 𝟮𝟬𝟮𝟰 𝗯𝗲𝗲𝗿 𝘁𝗿𝗲𝗻𝗱𝘀 😍 Convenience Vision consists of a series of webinars to help retailers understand the key trends driving beer sales Budweiser Brewing Group has launched its Convenience Vision to help convenience retailers drive growth within the beer category, and unveiled five key trends that they can leverage to have a strong year of beer sales. Convenience Vision will consists of a series of webinars in the coming weeks to help customers understand the key trends within the category and how they can maximize sales. The Vision provides customers with key shopper trends, recommendations, and key actions to take on how to leverage the data to drive incremental sales,” said Sjors Brandsma, retail convenience category manager in the UK at Budweiser Brewing Group. “In the coming months, Budweiser Brewing Group will be running a host of broadcast sessions to unpick the data and share recommendations.” For more information, retailers are encouraged to contact [email protected].

🔎 Why is focus more important than ever in the beer industry? At Brewbound Live 2024, leaders from Whole Foods Market, Deschutes Brewery, and Bump Williams Consulting will share how a targeted approach can result in increased sales. Learn how essential focus is for success in 2025. https://lnkd.in/gzfN3_7v #BeerIndustry #BusinessStrategy #BrewboundLive #CraftBeer #RetailTrends

I don’t really make a moral judgment on Tilray Brands' follow-the-leader approach to product "innovation." I'm much more interested in simply watching the relative newcomer to the US beer business feel around for the upper limit on over-extending its recently-acquired brands in real time. The company's line-extending tendencies (extendencies?) are especially transparent on one of the other breweries it scooped up from ABI, 10 Barrel Brewing Co., and its sub-brand called Pub Beer. Its expansion under Tilray’s ownership as been revealing. More: https://lnkd.in/gVCFiCFy

Carlsberg Marston’s Brewing Company Axe Well-Known Beer Brands, Says CAMRA The Campaign for Real Ale (CAMRA) has reported that pubs will soon be unable to stock iconic beers, including Banks’s Mild, following the Carlsberg buy-out of the last of Marston’s UK brewing operations. Fears that global brewers hugely reduce consumer choice in the UK have, CAMRA say, been realised as Carlsberg Marston's Brewing company (CMBC) axes eight classic British cask beers. The decision to delist these brands by the end of the year will have a huge impact on both pubs and pubgoers dealing brewing, consumer choice, and industry jobs another blow they said Despite an investigation by the Competition and Markets Authority finding that the merger of Marston’s and Carlsberg would not have negative effects, it is now confirmed that the consolidation of the businesses will be followed by the consolidation of their brands, resulting in a huge loss of choice at the bar for consumers. Eight cask beers and a further three keg brands will no longer be available to pubs. The Eight cask beers and a further three keg brands which will no longer be available to pubsare: - Banks’s Mild - Banks’s Sunbeam - Bombardier - Eagle IPA - Jenning Cumberland Ale - Mansfield Dark Smooth - Mansfield Original Bitter - Marston’s Old Empire - Marston’s 61 Deep - Ringwood Boondoggle - Ringwood Old Thumper Commenting, CAMRA’s Real Ale, Cider and Perry Campaigns Director and Vice Chair, Gillian Hough said: “This is another example of a globally owned business wiping out UK brewing heritage. “I hope that this change will mean space on the bar for licensees to stock guest beers from local independent breweries, but realistically, I suspect this isn't what CMBC plans. This loss of consumer choice is the inevitable outcome of a brewing conglomerate run by accountants and the bottom line. This is a sad and disappointing decision that puts both the history and the future of British brewing in jeopardy.” Read More:

WHO WILL BENFIT FROM CALRSBERG / MARSTONS / BRITVIC MERGER? I was recently inspired by Pete Brown to write a piece on the future of cask beer following his article on Carlsberg’s approach to the UK market.  Thanks to all those who engaged with that debate about the future of our national drink. It concluded that in a thriving beer category there should be room for all beer styles. Cask beer has all the attributes to appeal to a young generation and is showing double digit growth amongst local independent brewers. Businesses are free to make their choices but please don’t make it impossible for independent brewers to sell cask beer to the many who want to drink it. The positive response to the article prompted me to take a deeper look into the forthcoming enlarged Carlsberg / Britivc business and ask, simply what will happen and who will benefit? I have been surprised with the lack of debate on this deal and having worked in beer and soft drinks I feel reasonably well qualified to kick it off. The takeover announcement states that the new Carlsberg – Marstons - Britvic company will “take advantage of the highly synergistic relationship between beer and soft drinks.” It will merge a global brewer that sells one in seven pints in the UK beer market (including the biggest brewer of cask beer) with a soft drinks manufacturer with over a third of the UK licensed trade soft drinks market. In other words, a dominant corporation that will cast a huge shadow over the sector. In assessing this, ignore the more generic definition of “on premise” and focus specifically on UK pubs clubs and bars.. Why? Because in soft drinks much of the unlicensed on premise listing decisions are made in the head offices of McDonalds, Burger King, Subway and the global contract caterers like Compass. The UK on-licensed trade is where the impact of this deal will be most keenly felt, in the only outlets where it is legally possible to stock Pepsi alongside Carlsberg . The new consolidated company will control deliveries into those outlets, own both the beer and soft drinks dispense equipment which are essential for these drinks to be served and have a major stake in the company that services the kit when it breaks down. It would be interesting to know how many licensed trade outlets stock Carlsberg and not Pepsi and visa versa, remembering the stated aim of this new company is to “synergise” the two. Surely the only output would be to limit access to other suppliers of all sizes with products people want to buy. The small brewers I speak to tell me that access to market is their single biggest barrier to growth. I also know first-hand how challenging innovation in soft drinks is, even for big companies. I see no way that this newly formed foreign owned corporation would make either of those situations better. So who wins? The pub goer? The small supplier? The larger supplier? Or the newly formed Danish owned corporation? You decide. 

Lager led boost for Coopers defies national downturn A new lager beer release has fuelled strong sales growth for Australia’s largest independently owned brewer Coopers Brewery. The launch of Coopers Australian Lager has helped family-owned Coopers to post a 1.5 percent rise in total beer sales for the 2024 financial year, defying a year on year 2,.6 percent decline in total Australian beer sales. Coopers’ beer sales, excluding non-alcoholic beers, hit 78.7 million litres, up from 77.6 million litres the previous year. Profit-before-tax for the 2024 financial year was $32.8 million, compared with $28.5 million the previous year. #manufacturing #brewing @coopersbrewery Coopers Brewery https://lnkd.in/gChYdzDR

Molson Coors to Invest £100m in UK Brewery and Beverage Network Molson Coors Beverage Company has unveiled ambitious plans to inject over £100 million into its UK brewery and beverage infrastructure over the next five years. This significant investment aims to enhance capabilities, increase efficiencies and support the company's growth in the UK market. Fraser Thomson, Chief Supply Chain Officer for Western Europe at Molson Coors, emphasised the strategic nature of this investment, by stating that: “This plan is an investment in our future, giving our people and brands the tools to fulfil our potential in the UK market while making strong progress against our sustainability targets". Key components of this investment include upgrading brewing capacity and packaging capabilities at Molson Coors' major UK facilities, notably the breweries in Burton-on-Trent and Tadcaster. The Burton brewery will benefit from a new 24-tonne high-speed can filler, capable of filling an impressive 120,000 cans per hour. Moreover, the packaging keg lines at Tadcaster and Aspall Cyder House will also undergo enhancements. Molson Coors is also directing resources towards Sharp's Brewery in Cornwall, supporting new and existing ale brands such as Doom Bar, Solar Wave Hazy and Twin Coast. This builds on previous investments, including a recent £13 million expansion at the Aspall Cyder House and a £21 million investment in a new canning line in Burton. Molson Coors' focus on upgrading its facilities reflects its commitment to meeting market demands and advancing sustainability goals. Furthermore, the company's growth in the UK market is highlighted by the success of its brands, particularly Madrí Excepcional. Thomson described Madrí Excepcional as “the country’s fastest-growing major beer brand in both volume and value sales” in late 2023, reinforcing the need for expanded brewing and packaging capacity. In sum, this substantial investment by Molson Coors is not only about modernising its infrastructure but also about empowering its workforce and ensuring environmental responsibility. Thomson added: “This is a landmark moment in our history as we evolve to meet the demands of our growing portfolio and bring new innovations in the years ahead, while continuing to reduce the impact our business has on the environment”.