The BeerNet Power 20

FILED JANUARY 6, 2011

Dear Client:

We cut off the voting at 5pm ET last night, and Jennifer stayed late to tally up the results of the long-anticipated BeerNet Power 20. As indicated earlier, we haven't voted on the Power 20 in a few years for the simple reason that we just forgot. But it is fascinating how much the list has changed over the past few years -- not only the names, but the character of the list. A few observations:

This is the first year that a Busch isn't on the list. And this is the first year that a craft brewer has achieved the Power 20's coveted Number 1 poll position: Jim Koch. In fact, in the last Power 20 four years ago, there were only two craft brewers on the list. This year, there are six. And a few Brazilian names have made the list for the first time, and a big investor who is only tangentially in the beer business, Warren Buffet, signalling that readers think he will be a bigger player.

So without further ado, we reveal the BeerNet Power 20:

1. Jim Koch, Boston Beer Co.
2. Carlos Brito, Anheuser-Busch Inbev
3. Leo Kiely, MillerCoors
4. Reyes Brothers, Reyes Beverage Group
5. Dave Peacock, Anheuser-Busch
6. Tom Long, MillerCoors
7. Dick Yuengling, D.G. Yuengling & Co.
8. Graham McKay, SABMiller
9. Kim Jordan, New Belgium Brewing Co.
10. Bill Hackett, Crown Imports
11. Pete Coors, Molson Coors
12. Craig Purser, National Beer Wholesalers Association
13. Luiz Edmond, Anheuser-Busch
14. Dolf van den Brink, Heineken USA
15. Ken Grossman, Sierra Nevada
15. Sam Calagione, Dogfish Head
16. Dave Casinelli, D.G. Yuengling & Co.
17. Warren Buffet, Berkshire Hathaway / McLane
18. Tom Cardella, MillerCoors
19. Carlos Fernandez, Grupo Modelo
20. Andy England, MillerCoors


As a reference point, here was the BeerNet Power 20 back in 2006:

1. Craig Purser - President, National Beer Wholesalers Association
2. August A. Busch IV - President, Anheuser-Busch Companies (4)
3. Bill Hackett, president, Crown Imports
4. Norman Adami, president, Miller Americas (2)
5. Frits van Paasschen, president, Coors Brewing Co.
6. Tom Long, president, Miller Brewing Co.
7. Andy Thomas, president, Heineken USA
8. Jim Koch, founder, Boston Beer Co.
9. Kim Jordan, president, New Belgium Brewing Co.
10. Jeff Becker, president, the Beer Institute (17)
11. Doug Corbett, president, InBev USA
12. Tom Cardella, exec vp sales and distrib., Miller Brewing Co.
13. Charlie Papazian, president, The Brewers Association
14. The Reyes brothers, Reyes Holdings (7)
15. Ed McBrien, chief revenue officer, Coors Brewing Co.
16. Bob Lachky, exec vp global development, Anheuser-Busch, Inc.
17. The Hallam brothers, Ben E. Keith Co. (12)
18. Simon Bergson, president, Manhattan Beer Co.
19. David Casinelli, exec vp, Yuengling
20. Judge Marsha Pechman

Some similar names, lots of new names. Clearly, craft is the great equalizer.

WILL CONSTELLATION BUY OUT MODELO'S STAKE IN CROWN?

Credit Suisse analyst Carlos Laboy thinks it's a distinct possibility. While most of the focus in the industry has been on whether ABI will buy out the rest of Grupo Modelo, the Crown piece of the puzzle could be resolved before that happens, not after, says Carlos on the eve of Constellation's earnings results later today. The conventional wisdom is that if ABI is able to purchase of of Modelo, it would have to sell its stake in Crown to avoid antitrust scrutiny in the US. Therefore, "Modelo stands to benefit from moving forward with a deal with Crown now as a way of forcing ABI to increase a bid for Modelo. ABI may be willing to pay more for the opportunity to define the rules under which Constellation would operate rather than be subject to another contractually binding agreement drafted by Modelo on its own," writes Carlos in a research note.

But couldn't ABI, as a 50% shareholder, block such a sale? That's the conventional wisdom. "We view it differently," says Carlos. "If AB were to try to block such a deal, antitrust might rule that A-B does have indirect control of Corona in the U.S. and Modelo and Constellation could ask the Justice Department to force A-B to dispose of the Crown investment. As the only buyer, Modelo may get a better deal this way than by fighting with Constellation." Beer is like a chess game: You have to think at least three moves ahead.

OSKAR BLUES SHIPMENTS UP 45% IN 2010
Oskar Blues rules the small but growing canned craft segment. But you couldn't quantify just how much until it recently announced 2010 growth numbers: a 45% increase in shipments and 54% increase in retail sales nationally.
"We kinda leaned out the supply chain," said Chad Melis, suggesting that inventories got tight. "There was a while there that demand was way outpacing supply... there was a lot of fresh beer in the pipeline." And fresh pipelines, too. The brewery had to add seven 200-barrel tanks in 60 days last year to keep up. By the end of the year captured the fourth leading craft beer seller spot in their home state of Colorado, almost doubling the 29k barrels they'd produced in 2009. This year, Chad says, they're using the first three months to prepare for the expected summer sales slam.
The brewery started a Burning Can craft beer festival last year to raise awareness of, well, cool-looking craft beer cans. And to help introduce its print-based EVOLVE campaign, which officially debuted 10 months ago in local print media (including the Onion) and a few choice national rags like All About Beer. He says the ads, which will run in 6 new markets in 2011, are so titled to convey cans as the next best standard of quality both at the brewery and in the craft industry as a whole.
BEER BRIEFS:

GLAZER'S HAS ACQUIRED Bolls Distributing in Texarkana, the latest blue-silver distributor in the Glazer's network.

A NEW BEER LAW IN CALIFORNIA which just took effect at the first of the year now allows brewers and importers to conduct "meet the brewer" type events in licensed on-premise establishments without the retailer compensating the brewer for being there. Plus, the brewer can advertise the event in advance, so long as the beer's pricing isn't mentioned and only the name and address of the retailer is on the ad and is "relatively inconspicuous in relation to the advertisement as a whole," according to the law as obtained by BBD. Beer still can't be given away, and brewers still can't pay for any ads the retailer places. Previously, California law considered the brewer's presence and instruction as providing something of value to the retailer and thus prohibited, so the retailer had to pay the brewer to be there. Another California law which also passed allows free beer samples to be given away, with limitations, in the off-premise.

BREWPIC OF THE DAY: Found this on the popular message board Reddit, where a guy walked into a Ralph's in California and ran into Boston Beer's Jim Koch, the new newly crowned king of the BeerNet Power 20. The guy writes: "He [Jim] was super stoked to be talking to us, asking us about our favorite beers and stuff. He said he was just there to check to make sure the beer was fresh and well-presented. Quality control right from the very top. That's awesome."



Until tomorrow, Harry

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