In the year since the industry last convened, the No. 1 U.S. brewer, Anheuser-Busch, was acquired by Belgian-Brazilian InBev, and the No. 2 and No. 3 names in the U.S. market, Miller and Coors, formed a U.S. joint venture. Rumors of a possible sale are swirling around the No. 4 player, Corona importer Crown Imports, as well.
"Not since Prohibition was ended 75 years ago has our industry seen so much change," distributor Dan Henry told convention-goers from a stage designed to look like an upscale bar.
For the wholesalers who make up the industry's "middle tier" between brewers and retailers, those changes have been largely ominous: InBev has a track record of harsh cost cutting in developing markets, and MillerCoors has stated its intention to wield greater control over its wholesalers, much as A-B does.
"We are facing new frontiers and new questions," said the association's outgoing chairman, Aldo Madrigrano, a Milwaukee-based MillerCoors distributor. "Recent actions by our supplier partners have created real problems for many."
NBWA President Craig Purser sounded a more defiant tone: "Retailers and suppliers are trying to control our business, and distributor independence could be a casualty. We will not let that happen."
The big brewers did their best, both in the public program and at closed-door meetings, to smooth things over with their local sales forces. Dave Peacock, A-B's VP-marketing, tried to remind wholesalers that they are on the same side in a larger struggle for market share. "Wine and liquor are the enemy," he said. "We cannot let wine out-romance us and liquor out-fun us."
And while distributors wrestled with MillerCoors contract demands and pondered what InBev -- whose international leadership did not attend the convention -- portended for A-B, further uncertainty swirled around Corona, the leading import, which saw sales decline for a second straight summer, following a 16-year run of uninterrupted growth.
Addressing recent speculation, Crown Imports President Bill Hackett declared: "Crown is not for sale." Deutsche Bank recently interviewed Rob Sands, CEO of Constellation Brands, which owns half of the Corona importer, and wrote that Crown would entertain offers.
Notes from the conventionDRINK UP: Anheuser-Busch is planning a $50 million fourth-quarter push behind a repositioned Bud Light, according to VP-Marketing Dave Peacock.
The ads for the top-selling U.S. brand, from longtime agency DDB, cite as the brand's primary attribute its "drinkability" -- that is, "consumers telling us that we're kind of the perfect balance among the major light beers -- not too watered down but also not as harsh or heavy with an aftertaste," Mr. Peacock said. "But we're going to do it in a Bud Light way, with a lot of humor." The spots will begin running in October.
DDB beat out fellow A-B roster shops LatinWorks and Euro RSCG in a pitch for the assignment.
BULLISH ON PRICING: Considering the financial meltdown that dominated the news last week, representatives of the beer industry's high end were fairly bullish on pricing.
While Sierra Nevada founder Ken Grossman told attendees, "Pricing is an issue we're starting to bump up against," he said he still intended to implement a mid-single-digit price increase later this year. Heineken USA President Don Blaustein also vowed to raise prices, noting that "beer is an affordable luxury."
Sam Calagione, who runs craft brewery Dogfish Head, said he, too, would look to raise prices in a downturn because high-end beer is still cheap relative to top-shelf wine and spirits. "You can take $20 into any liquor store and buy one or two cases of world-class beer. If you try and do that on the wine side, they'll have to decant that volume into a thimble."
OFF MESSAGE: A-B's Mr. Peacock tried to unite beer wholesalers and brewers against wine and liquor, but the message may not have gotten through. A waitress at Johnny Foley's, an Irish pub two blocks from the convention site, told a table of Miller executives and alcohol trade press that the bar had all but sold out of Grey Goose and Belvedere vodka since the beer guys came to town.