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My Very Speculative Crystal Ball for 2016

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Everyone is always trying to guess the next trend in the markets, and what the next new wave will be.  The market is changing so rapidly, predicting the trend is 25% industry insight, 25% market trends, and 50% luck.  So here I shake my crystal ball, and see what I think will be happening in 2016.

  1. Anheuser-Busch InBev (ABI) will complete its purchase of South African Breweries-Miller (SABMiller) once the antitrust authorities in the United States and several other countries require for portions of the conglomerate to be sold to other companies. The most notable of those sales would be the MillerCoors to MolsonCoors in the United States.  This is a price worth paying for the main goal of ABI in increasing their global value though, so ABI will make sure that it gets done.
  2. ABI will acquire at least 5 more craft breweries in 2016, with the potential of obtaining a brewery with a Brewers Association Regional classification.
  3. When MillerCoors is fully owned by MolsonCoors, they will begin to purchase craft breweries to expand their footprint as well.
  4. New Belgium will be sold to either a larger brewer, ABI, MolsonCoors, Constellation, Diageo PLC or a private equity firm, but the precedent set with the Ballast Point sale set the bar too high for that Employee Owner group to pass out if the right number floats past their board.
  5. The number of new craft breweries will slow down significantly, and the number of closings will increase. 2016 may not be the first year with a decrease in the total number of breweries, but it will be one of the lowest numbers of new breweries opening.
  6. The Brewers Association is going to have a hard time with their ever fluctuating definition of a “Craft Brewery” with the tremendous changes in finances for many craft brewers. These changes, will make it difficult for the BA to keep their identity, and credibility, while some of the largest and core brewer members have defied their definition of “Craft Brewery”.
  7. ABI will begin to acquire brands outside of the beer category.
  8. Diageo will buy a craft beer brand. Sounds crazy, but they will dip their toes in the well after seeing Constellation do so, and with the plethora of craft breweries out there.
  9. Heineken is going to do a major restructuring of how it goes to market, now that they have teamed up with Lagunitas, and the possibility of other purchases or joint ventures.
  10. Boston Beer Company will have a rocky year, but that isn’t necessarily a bad thing, based off of their continual success. It is hard to do national roll outs of the likes of Angry Orchard, Rebel and Twisted and maintain that velocity, there is always a down year.
  11. Yuengling will begin researching to expand, to at least two more states. In order to do this thought they will be needing to expand their production as well, so Yuengling will be looking at purchasing a craft brewery, or investing in one that needs some additional capital in order to increase the production capacity.
  12. Hard Sodas will spike in sales, then plateau towards the end of the year, and somewhere an underage drinking group will have a valid claim against this market segment due to a packaging matter, or a snafu with a retailer.
  13. Cider will continue to lose market share to the hard sodas and gluten reduced/gluten free segments. Newer cider brands will make up in overall volume for the category, and cider will rebound when Hard Soda’s plummet when the underage drinking mishaps begin.
  14. Home brewing is being automate, literally, with the likes of Picobrew. Dogfish Head, Rogue and Elysian have already teamed up and created Picopacks, which essentially allows for a homebrewer to brew in the same sense that a Keurig allows for anyone to make coffee at home. I know that simply calling a Picobrew system home brewing riles lots of feathers, but some investor will see the opportunity to invest in the technology and, or the licensing, and mass market it like Picobrew.
  15. The trend of wineries buying bulk wines for repackaging as their own brands will continue and bleed into the beer industry.
  16. The term “Craft” and “Local” will lose their marketing value to the terms “new” “Seasonal” and “limited release”, “local” will be hit the hardest as many regional brands have expanded their core line ups even more.
  17. Labeling will become less seasonally specific, increasing the shelf life viability for the consumers, and increasing revenue for the suppliers.
  18. Retailers, are already cramped for space and have been remodeling and expanding their liquor and beer departments, as more and more brands are beginning to be packaged and current brands emerge to new markets, retailers are going to begin to discontinue existing brands for the spiked sales of the continual trend of new packages, OR they will begin saying no to new packages entirely to maintain continuity within their store. I don’t see much middle ground there, it is going to be one or the other, it is SKU-mageddon.

We're Here to Help

Dear friends in the alcoholic beverage industry,

As we as an industry, nation and planet collectively try to navigate this unprecedented period the coronavirus has brought us, I’d like you to know that we at Craft Beverage Consultants (the other CBC!) are here to answer any question you may have (or not know you have) about not just surviving this time but positioning yourself to thrive as soon as social distancing measures allow your business to function at full capacity again.

If you schedule a free 60-minute phone or video conferencing consultation with me or any of my 11 highly specialized colleagues, we’ll help you figure out any of your immediate and/or longterm business needs, or “everything but the staffing,” as we like to say. We’re not high-pressure sales kind of people, especially these days, so you don’t have to worry about fending off annoying pitches. Make an appointment on our website or Facebook page, or just call us the old-fashioned way at 314-768-0220.

Our experts have a combined 150 years in the alcoholic beverage industry, with deep knowledge in everything from sales and distribution, production, and regulatory compliance to marketing, package design, event planning, IT, (social) media, hospitality, and even values-based executive coaching. 

For example, I can coach you through this season when chain accounts have canceled their spring resets and distributors have drastically cut orders. Our director of business strategy and compliance can save you money – now – on excise taxes, caution you to avoid naming your beers in ways that risk alienating your buyers (Wuhan Wheat? Coronavirus Cream Ale? Groan. No.), and secure TTB approval for the tastefully named beers you do make. Our creative director and web team can get your e-commerce site up and running and launch a social media campaign that keeps you top of mind for current and future customers. Our director of storytelling can put you in front of the press so you can tell your story to your community. 

Once you’re ready, we can look forward together. Now is the time to talk about post-virus. We all suspect the legal landscape to look different. But how? And how do you prepare yourself in a way that positions you to charge out of the gate ready to maximize the potential and profit of whatever the “new normal” turns out to be? Please get in touch so we can talk about it. 

And if you’d like to feel us out beforehand, join me as I answer all of your questions about sales and distro during my free “Ask Me Anything” presentation May 5 at  — p.m. Central on the Craft Beer Professionals Facebook page. Also, at 11 a.m. Central on April 28 Director of Storytelling, Communications and Public Relations Tara Nurin appears as a special guest of “Ask Me Anything” to share unique – and free – ways to use the media to your advantage now and going forward.

CBC’s roster includes local and regional clients like Epic Brewing, Logboat Brewing, Piney River Brewing, SudWerk Brewing and Common Cider Company.  The agency was founded in 2014 by Jacob and Beth Halls; I, Rick Laxague, joined as a partner in charge of sales, marketing and distribution consulting in 2019. 

I have close to 20 years of experience, a bulk of which was with Crescent Crown Distributing in Arizona. My last role there was Area Sales Manager for the dedicated craft beer division, coaching and leading a sales team to be nationally recognized. In early 2014 I helped take a regional brewery national as their Director of National Accounts and increase that segment of their business from 30,000 cases to almost 300,000 cases in two years, an increase that equates to $4.8 million in IRI dollar sales. 

Co-founder Jacob Halls brings 17 years of experience in regulatory compliance, business strategy, marketing and craft brand management to the company. In his former position as craft brand manager for the N.H. Scheppers Distributing Company in Columbia, Missouri, Jacob helped lead his team to winning the 2016 Distributor of the Year award from New Belgium and to a nomination for the Brewers Association’s Distributor of the Year award. Jacob is also the founder and director of the South East Craft Beer Fest/Sampling & Educational Conference. Beth Halls is Director of Business Operations and Coordinator of Charity Operations for the festivals and events run by CBC, such as the South East Craft Beer Fest, MO Bacon & Bourbon, and many more. 

Again, please reach out to me or my partners for anything. I’m at [email protected] and CBC can be reached at (314) 768-0220 or at craftbeverageconsultants.com.

I look forward to meeting/talking soon.

Sincerely,

Rick Laxague