Numlock News: August 10, 2022 • Cheap Wine, Blapple, Haus
By Dave Infante
Monster Beverage Corporation, the publicly traded firm behind the eponymous energy drink with the iconic puke-green logo, is finally getting into the lucrative ready-to-drink alcohol market. After years of “will they, won’t they,” the company — of which Coca-Cola owns roughly 17 percent — acquired CANarchy Craft Brewing Collective in January 2022, scoring a built-in booze distribution network and signaling serious interest in quenching 21+ thirst. Now, for the first time, it’s rolling out its own alcoholic offering: “The Beast Unleashed,” a new (non-caffeinated) flavored malt beverage clocking in at 6 percent alcohol by volume, is slated to hit shelves in select markets by the end of the year in 16-ounce loosies and four-packs of 12-ounce slim cans. The company is targeting national distribution by the end of 2023, at which point Milwaukee’s Best will no longer be the only Beast broke college kids can pick-up at the convenience store just off campus.
Spanish (Wine) Inquisition
Between 2019 and 2021, a Spanish wine group allegedly sold up to 40 million bottles of cheap table wine by pretending it was rare, expensive grape juice from various denominaciones de origen in Spain’s vaunted Catalan region. After first appearing on authorities’ radars last October, six individuals associated with Grupo Reserva de la Tierra are now scheduled to appear in court in late September 2022, where they’ll face prosecution for damage done to the regions’ reputations by the mislabeled plonk they’re accused of passing off.
Busch Light, the favorite bottom-shelf swill of pong tournament-hosting frat lords across this great land, has been on an absolute heater lately, growing its sales by nearly a quarter in the competitive, slowly shrinking U.S. beer market from 2017 to 2022. Busch Light’s momentum isn’t simply a function of economic hardship brought on by recession, either. The brand, owned by global macrobrewer Anheuser-Busch InBev, has been pouring on the marketing dollars to great effect, and as of 2020, has been riding a bona fide summer-seasonal star in an oddball spinoff, Busch Light Apple. “Blapple,” as it is known to its many fans, posted $30.9 million in sales at chain retailers last summer alone, putting it roughly even with year-round figures for major craft brands’ entire portfolios. But the apple of ABI’s eye, Blapple ain’t: The parent company is discontinuing the spinoff after this summer for reasons unknown.
Last year, the biggest aluminum can maker in the United States, Ball Corporation, warned beverage producers to brace for higher prices and massive minimum orders as a result of supply-chain issues and increased demand stemming from broader pandemic-induced shifts in packaging and distribution. The firm also announced plans to build five additional plants in North America to meet increased demand in the future. A year later, the manufacturer says that it’ll actually be shutting down two plants (one in Phoenix and one in St. Paul) and delaying the construction of another in North Las Vegas. The overall workforce implications aren’t yet clear, but in St. Paul at least, the closures will affect 110 workers. What gives? The can company says its customers adjusted their pricing strategies to offset those (and other) inflationary input costs, and that volumes have taken a corresponding hit. So what was a sold-out can market a year ago now has plenty of slack.
The state of North Carolina has not been particularly friendly to the “ardent spirits” over its history, what with the powerful temperance movement that had formed up in the Tar Heel State as early as the 1830s, the dry counties that checkered its geography through the 20th century, and the pesky prohibition on happy hours that still stands today. But! But! In 2021, the state made it legal for municipalities to create “social districts” where open-container laws don’t apply. How European — and/or New Orleanian and Savannahan — of them! Even with the regulations relaxed, only five cities so far have taken the plunge, but over a dozen are reportedly considering it as a potential hedge against reduced foot-traffic to local businesses during the recession.
Empire State (of Beer)
As the item above suggests, the sale of alcohol in this country is regulated mostly on a state-by-state basis, meaning depending on where you live, booze producers are operating on dramatically different footing. For a prime example, look to the border between New Jersey and New York. The Garden State is currently cracking down hard on its craft breweries by enforcing a long-delayed rule that limits taproom operations, to the delight of the state’s liquor license-holding bars and restaurants. Meanwhile, its tri-state neighbor to the north and east has just tacked a six-year extension to a key provision of its popular brewery farm bill, which has been instrumental in boosting New York’s multibillion-dollar craft brewing industry. Originally signed in 2012, the bill offers attractive operating licenses to businesses that committed to using certain percentages of New York-grown ingredients to produce alcohol; a big step up from 60 percent to 90 percent was scheduled for the beginning of 2023, but agricultural conditions were looking iffy. Now it’ll be pushed out to 2029 to let the state’s barley and hops farmers catch up to its breweries.
DtC Booze Bummer
Wow, I didn’t mean to make half of this email about the
stupidity nuance of American alcohol laws, but here we are. On Monday, the founder of Haus, a popular direct-to-consumer aperitif brand, announced its Series A funding had fallen through and it would try to sell itself to maximize returns for existing investors, which include 100 individuals and a handful of funds. DtC brands fail all the time (even more so now that Apple has drastically crimped Facebook’s ad targeting, on which the business model heavily relies), but Haus’ undoing is notable both for what it leaves behind — a short but innovative legacy of sidestepping the United States’ three-tier system for alcohol distribution and sale — and the “vice clauses” on the books at many venture-capital firms that, according to its founder, made it challenging to raise money from familiar funding sources with money to burn. Everyone wants to be disruptive until drinks get involved, I guess.
Be sure to check out Dave’s newsletter!
Thanks to the paid subscribers to Numlock News who make this possible. Subscribers guarantee this stays ad-free, and get a special Sunday edition. Consider becoming a full subscriber today.
The best way to reach new readers is word of mouth. If you click THIS LINK in your inbox, it’ll create an easy-to-send pre-written email you can just fire off to some friends.