Blog Entries by Jeff Cioletti

Toasts & Spills: Spring 2013 Edition

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Category: General Blogs

There’s quite a bit to talk about this month, so I figured it was as good a time as any for another edition of my semi-regular thumbs-up, thumbs-down feature, Toasts & Spills.

Let’s start off on a positive note and propose a Toast to Justice Milton A. Tingling of New York, who last month invalidated NYC Mayor Michael Bloomberg’s ban on sugar-sweetened beverages in sizes larger than 16 ounces—a day before it was to take effect. Calling the restrictions “arbitrary and capricious” and acknowledging the ban was fraught with loopholes, Tingling, at least for now, killed a misguided law that would do little to combat the obesity epidemic and a great deal to punish the beverage market and undermine consumer choice.

And while we’re at it, how about a Spill for the mayor of the great city of New York for vowing to appeal Tingling’s decision. Bloomie should just leave well enough alone and move on. I’m actually a fan of his calorie-posting initiative at foodservice establishments in the city, his efforts to get rid of trans fats and, my personal favorite, his indoor smoking ban. These, in my opinion, were smart public health actions. The big soda ban, not so much. Just let it go, Mr. Mayor.

And since we’re talking about the courts and misguided maneuvers, I’d be remiss if I didn’t assign a great big Spill to the truly ridiculous $5 million class action lawsuit against Anheuser-Busch asserting that the mega-brewer is watering down its beer. It’s silliness like this that pushes our legal system toward dysfunction and paralysis, as it’s nothing more than a colossal waste of time that does nothing but clog the pipes of jurisprudence. And if Budweiser is watered down? So what! If the beer’s not flavorful enough for some consumers, then they can go drink something else. Hasn’t anyone noticed that, when it comes to beer, there’s more choice than ever before?  

And that leads us to our next Toast: to U.S. craft brewers. The Brewers Association last month released 2012 craft beer volume and revenue figures and they’re even better than they were in 2011. The segment saw a 15 percent rise in volume and a 17 percent increase in dollars, earning total retail dollars of $10.2 billion. Craft share of overall U.S. beer volume reached 6.5 percent, up from 5.7 percent in 2011, while dollar share cracked the 10 percent mark.

Among the many beneficiaries of such robust craft beer business has been the publishing industry, as craft-themed books have become a genre unto themselves. Our final Toast goes out to author and frequent Beverage World contributor and BevOps craft tasting host John Holl, as his latest tome, “The American Craft Beer Cookbook,” is about to hit stores. The book features a collection of 175 recipes contributed by craft brewers, brew pubs and others in the craft scene throughout the U.S. My wife and I were lucky enough to be guinea pigs when John was testing out a couple of recipes and I can confirm that the book will be worth every penny of the $12.36 pre-order price at Amazon.

And that is where I must end things for this edition, as I am now too hungry to continue writing.

Distilling the Meaning

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Category: General Blogs  |  Tags: Distilled Spirits Co, DISCUS, spirits

 

We’re focusing a great deal on craft beer this issue (major congrats to Oskar Blues for earning our inaugural Craft Brewer of the Year Award), so it’d probably be appropriate for me to write about craft beer. But, I’ve written a lot of about the subject lately (including in this issue) and I think I want to talk about spirits. 
 
There were a great many statistical nuggets I took away from the Distilled Spirits Council’s (DISCUS) annual media and analysts briefing last month. For one, total spirits volume grew by 3.0 percent in 2012—an impressive number for any mature beverage category, especially when compared with the likes of U.S. beer and carbonated soft drinks. Volume reached 202 million case equivalents. Total revenue was up an even greater 4.5 percent, rising to $21.3 billion
 
A good deal of overall spirits growth is thanks to the premiumization trend, as a sizeable portion of the category’s growth came from the top two spirits price segments, high-end and super-premium, which grew by 4.8 percent and 8.9 percent, respectively. The two segments on the lower half of the price spectrum, value (the lowest) and premium, grew by a much more modest 1.8 percent and 2.1 percent, respectively. Additionally, the super-premium segment is having a much greater impact than it had 10 years ago. In 2003 the value segment’s total revenue was just under $3.8 billion, while super-premium’s tally was a tad lower than $1.5 billion. Ten years later, value’s annual revenue was only a slightly higher $4.1 billion, but super-premium is getting pretty close to matching it at $3.9 billion.
 
There were plenty more facts and figures DISCUS president and CEO Peter Cressy and chief economist David Ozgo presented at the meeting, but I wasn’t struck so much by what was said, but by what wasn’t said—or at least wasn’t said until the final minutes of the presentation. In the same event held in in each of the past few years, the speakers wouldn’t get five minutes into their presentations without uttering the word “recession” or even “economy” (not including Ozgo’s economist title). But this year I was already packing up my laptop (reporters notebooks are for suckers) before a passing reference to the state of the economy was made late in the session. 
 
And I don’t think that was an accident. When your numbers are as good as spirits’ have been—not to mention steady, as 2011 was similarly positive for the category—it’s perfectly safe to get a sense that things have returned to some form of normal. And when the top-shelf price segments are doing as well as they are, it points to a sustainable trading-up trend that, after a brief recessionary hiccup, is back in full-swing. The gravitation back toward affordable luxury over the past three years is a sign that times could actually be heading back into the “good.” 
 
This in no way is meant to cavalierly dismiss the 7.9 percent unemployment elephant in the room. There’s still a considerable way to go until we collectively reach full recovery. But with some consistently solid numbers coming out of the spirits market, it’s okay to surrender to one’s inner optimist.  

Lowering the Bar

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Category: General Blogs  |  Tags: beer, craft beer, bartending, customer service

So, a man walks into a bar. He wants to order a pint of fine craft beer so he motions to the bartender. The bartender walks past him, not making eye contact. A few minutes pass and he continues to motion the bartender. Again, no acknowledgment whatsoever. After a few more minutes pass, he finally gets the bartender’s attention. She shoots him a “What do you want?” look and he shouts his order above the noise in the crowded pub. She shouts back, “I can’t hear you,” and walks away. Waiting for the punchline? There isn’t one. This, sadly, is no joke. This sort of thing happens more often than it should. The man in the tale is yours truly. It happened last month.

Look, I get that it was crowded and crowds and noise can be overwhelming. But that’s no excuse for poor customer service. In less-crowded situations I’ve sat at the bar and managed to engage the barkeep a little more easily. This time I wasn’t entirely sure what I wanted to order so I asked for a little insight on one of the many artisanal brews on tap.

Me: What style is it?

Bartender: It’s like Bass.

Me: But it says it has an ABV of 9 percent. That’s a bit high for that style.

Bartender: Well, it’s the same color.

This pub prided itself on its vast selection of craft beers on draught. But it seems that management was more concerned with quantity over quality—the quantity of its taps versus the quality of a trained, informed serving staff.

We seem to hold wait staff in restaurants to much higher standards of human interaction than we do bar staff. What’s the reason for that? There isn’t one, at least there shouldn’t be one. Bartenders are salespeople, just as waiters and waitresses are. They’re there to get you to buy stuff and answer any questions you may have about that stuff so you can make a more informed purchasing decision. I’m not saying that these bars are the rule—but they’re not the exception either. They’re somewhere in the middle of the exception-rule continuum.

And that costs sales, regardless of how negligible that loss would be in the grand scheme of things. It’s certainly not something that the companies that own the brands and the wholesalers that distribute the brands the bar is supposed to be selling take lightly.  

The staff and the owners could argue, “Well, the place is packed, so we’re obviously doing something right. So back off!” But why would anyone ever want to take customer traffic for granted? Exactly how loyal are the customers that happen to be packing that bar on a given night? Maybe they just pushed their way into that particular place because all the other establishments in the neighborhood were even more crowded. And if the managers and staff are giving them no reason to come back, they won’t.

Here’s another thing to consider: social media. If someone has a bad experience in a pub, that place can expect an instantaneous, unflattering tweet or a rather damning review on Yelp.  

The joke may begin with the man (or woman) walking into a bar. But no one’s laughing when the woman (or man) walks out of the bar a few seconds later…and never comes back. 

Let the Games Begin: BevStar 2013 Call for Entries

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Category: General Blogs  |  Tags: beer, brewing, craft beer, beverage, alcohol, brew, awards, soft drink, soda, tea, cider, sake, mead, wine, spirits, liquor, functional, sports drink, water, bottled water, enhanced water, coffee, innovation, energy

With the dawn of a new year comes a new chance for your brand to shine. Whether you're playing in the alcohol or non-alcohol space (or both even), you are cordially invited to submit your product to our third-annual BevStar Awards competition. It's our annual celebration of innovation across all of the major beverage categories. And the best part? It's absolutely free to enter, aside from whatever shipping costs you need to incur to get a sample of your product to our judging team.

Since this is about innovation, we ask that your product be new(ish). That means it should have been launched no earlier than Sept. 2011. If it hasn't been launched yet, that's fine. As long as you've got a product, a package and a plan to roll it out before summer 2013, it's eligible. (The product has to exist. Ideation is great, but execution is critical.)

Once again, we'll be awarding gold, silver and bronze awards in the following categories:

• Carbonated Soft Drinks

• Water/Enhanced Water

• Functional Beverages (including sports drinks, but not including energy drinks—those get their own category. We got a ton of energy entries last year.)

• Energy Drinks

• Beer

• Mead, Cider and Sake

• Wine

• Spirits

• Ready-to-Drink Tea & Coffee

We'll also present special achievement awards for marketing innovation, social media initiatives and environmental sustainability.

To enter, please e-mail the following to bevstar@beverageworld.com :

1. Product Name

2. Parent Company Name

3. Contact Info (address, phone & e-mail)

4. High-resolution product image

5. A brief description of the product and why you believe it should win a BevStar award.

6. The names of any packaging, label design, ingredient and branding companies or individuals that helped develop or market your product.

If your product passes the written test, we'll send you instructions on where to ship product samples for the practical test. We ask that you limit the samples to one bottle/can/carton/etc. per product entered.

Keep in mind, tasting is only one component of our selection process. Your product has to offer the whole package, which includes, well, the package and its overall market positioning.

The submission deadline is March 1. Winners will be notified by June 1 and we'll showcase winning products in the July 2013 issue of Beverage World.

If you've got any questions you can e-mail me directly.

We're looking forward to your entries!

 

 

 

 

Reverse Consolidation?

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Category: General Blogs  |  Tags: beer, brewing, craft beer, brew

In the course of putting together our annual Forecast issue (the fun begins with the rather foreboding cover item on energy drinks on page 32), it’s often a tricky task to put a fresh spin on certain categories that, year after year, seem to have been performing more or less the same, give or take a volume percentage point here or there. And when the outlook for the coming year is for more of the same, it’s a mixed blessing: It’s a good thing because those doing the forecasting have a smaller chance of being wrong when performance has been so consistent and bad because those of us tasked with writing about such projections have to figure out a way to not keep repeating ourselves.

The category of which I speak, of course, is beer. To borrow a phrase from Led Zeppelin, the song remains the same: Beer’s going to keep losing alcohol share to wine and spirits, the overall market’s going to be flat or, at best, grow at a dying snail’s pace, but the craft segment’s going to continue to enjoy low double-digit growth in both volume and dollar sales.

However, a potential new twist on what’s happening in the market is that a strange dichotomy has emerged. At the top of the market, where the large multinational brewers roam (and on the distribution tier, for that matter— but that’s another story), consolidation is the driving dynamic. AB InBev is buying Modelo—a handful of years after InBev bought Anheuser-Busch to form the gargantuan entity we’ve come to know and love—Heineken’s expected to take control of Asia Pacific Breweries and there are always rumors and rumblings that AB InBev might even merge with SABMiller to give new meaning to the word ‘formidable.’

But on the small brewer side, domain of the crafts, you’ve got the reverse happening. There are already more than 2,100 small, independent brewers in the country, up several hundred from just a year ago. With more than 1,300 breweries in planning at last tally, that number could hit 2,500 in 2013. Sure there’s some consolidation happening with a couple of brewers here and there merging or giants scooping them up—à la AB InBev-Goose Island—but, relative to the number of newbies popping up, those instances are few and far between, the exceptions rather than the rule. It’s almost as if the market as a whole has gotten so consolidated that the pendulum has swung toward the exact opposite of consolidation, as far as craft brewing is concerned.

It’s a phenomenon that’s carrying over into spirits, as our November 2012 cover story could attest. It’s also happening in the non-alcohol realm among segments like artisanal sodas.

Will this reverse consolidation eventually slow down and become the reverse of reverse consolidation (aka ‘consolidation’)? Of course, that’s ultimately the market trajectory that history favors. However, 100 or so years from now, couldn’t the cycle start anew yet again? Even more recent history favors that scenario. It’s a pendulum effect and, pendula are, after all, controlled by gravity—a force not unlike consumer demand.