The Easter C-Store Miracle

FILED MAY 4, 2010

Dear Client:

Well, maybe it's not a miracle. You'll recall that in March, scanner data from off-premise channels showed that beer sales made a turnaround, up about 3.5% in the month to April 18 according to SymphonyIRI. But nowhere was that more pronounced than in convenience stores, the hardest hit channel by the recession, which saw beer sales going from being down mid single digits to being up a solid 5%. But that's not the whole story.

A closer look at IRI weekly c-store data suggests that the we are seeing a robust turnaround in all segments of the beer industry. At first we suspected Easter timing. Yes, we had an early Easter (April 4 this year, compared to April 12 last year), which artificially padded the early data coming out. In fact, during the week of Easter this year, c-stores gained over a million cases over last year, compared to being down an average of 400,000 cases per week since the beginning of the year. Easter timing, I though at the time. No reason to get excited.

But what is amazing is what happened next. They say momentum begets momentum, and maybe that early Easter got people back into beer drinking mode earlier than usual. Maybe Summer started a little early this year. Because during the week containing April 12 (which was Easter last year and nothing but flowers blooming this year), we should've given back a million cases. Flowers blooming doesn't usually sell a lot of beer, because they bloom every year. But you know what? We gained another 800k cases that week. And the week after that, IRI shows we gained another 400k cases over the same week last year. In the four weeks to April 18, which is the latest data we have, we gained 2.5 million cases in c-stores. Not bad.

But really, it started happening before Easter. You can almost pinpoint the Ides of March, (the 15th) as the date c-store beer sales turned a corner. Not a great day for Caesar perhaps, but a great day for c-store operators and beer marketers. On the week ending March 14, beer sales were down 37,000 cases. The next week, beer sales were up 37,000 cases. Before that, as I said, beer sales were down an average of 400,000 cases a week since January.

Sub-premiums, which were pretty much up all year, posted really strong sales starting in Mid-March, going from being up about 40k cases to being up 150k cases and then in April jumping to being up 340k cases a week. Crafts, which were posting gains all year, also experienced a doubling in volume growth around mid-March. PABs were also up all year, and sales jumped by third in mid-March and into April. Even imports, which were down 20k cases in mid March, sprang to being up 20k cases in late March. Domestic premiums got a late start (most affected by Easter), and were down in mid March but shot up to being up 500k cases by the first week in April, and continued up 130k cases a week into mid-April. Good weather and a better economy seem to be helping c-stores along.

So will momentum continue to beget more momentum in c-stores? I sure hope so. But there's one caveat. In the last week that I have data, (week ending April 18), beer sales slowed in all categories in c-stores. So let's see what the rest of April and May bring.


As reported yesterday, the big news out of Chicago is that MillerCoors will be promoting eastern president Tom Cardella to a new craft and import division, and western president Ed McBrien will be promoted to president, sales and distributor operations, effective May 15. This ends the split geographic sales structure at MillerCoors that most suspected wasn't a permanent design. Beer Business Daily spoke with MillerCoors chief Tom Long about that, and other aspects of the new changes. You, my friends, are a fly on the wall.

TOM ON THE MANAGEMENT MOVES. "This is in so many ways a pretty straightforward move. When we came together as a company, we needed to get an aligned move on how to create value. So the first thing was to get those GMs in place and and get that model humming, because getting aligned with our distributors was our first and foremost goal. That meant that to some degree, it took a little focus from other things. That's what making choices is about. Tom [Cardella] and Ed [McBrien] were our commercial team leaders, and Kevin [Doyle] running chains, and Brad [Schwartz] running pricing, and Andy running marketing. During those two years, we settled on an approach to how to run the business. We got to where we were finishing each others' sentences. And we came to a place, Harry, where it was time to move on."

ON MOVING CARDELLA TO CRAFT AND IMPORT. "We've seen growth in the craft side, and we participate heavily in that segment with Leinenkugel's and Blue Moon. But with focus, there will be a lot more growth for us. Secondly, we have a heck of an import portfolio within MillerCoors, and bringing more focus on that category will be important, because I'm convinced that segment will be healthy longterm. We put Cardella on that side of the business, because as you know Harry, he comes from that side of the business. He has his InBev background, but he also has a marketing background, from when he was senior marketer at Miller years ago.....It's important to note that the marketing of the craft and import brands are reporting into Tom..... That comes from the whole notion that the delineation between sales and marketing for those types of brands is soft. It's really about on the street marketing. And so the sales people are the marketing people in many ways. So having those under one head makes all the sense in the world......Those guys need to run with their sales compatriots on developing and choosing accounts to be in the marekt. The integration is very tight on this segment. He's also one of our best relationship people, and this business is about relationships. So we think this is a great example of putting our best people on our best opportunities to match their skill set."

ON PUTTING ED IN CHARGE OF SALES. "With Ed, he's all about execution and driving it across the business. And he and Kevin see totally eye-to-eye with respect to chains. So having Kevin report to Ed, and having that integration between chain and field sales, just makes that much more hand in glove. Kevin's done a great job with chains, so there won't be any hard left turns or right turns, just more integration."

WAS ORIGINAL DECISION TO SPLIT SALES BY GEOGRAPHY A WISE ONE? "Harry, the context of that particular decision was about keeping the best people at the JV when it started [Ed McBrien and Tom Cardella]. That's why that was done. We couldn't have kept the best talent without a structure that allowed them to work together to build this company. So we did that, and now we are ready to move on. I'd like to think that the whole group has learned from one another..... So in retrospect if you said, gee, on paper would we have rather had one [in the position of running sales], you'd say 'of course.' But losing either one of those great guys from our company at a fragile time wouldn't have been smart. So I stand by our original decision."

What do you think? Ping us at

Until tomorrow, Harry

"We know what we are, but know not what we may be."
-William Shakespeare

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