We've Gotta "Lean Into" Beer's Changing Landscape, Says Craig

FILED SEPTEMBER 29, 2016

Dear Client:

At last year's NBWA conference, president and CEO, Craig Purser, focused much of his opening remarks on disruption within the industry.

DISRUPTION THE NEW NORM. "Here we are a year later and disruption continues to transform our world," Craig said this week on the big stage in Chicago. "Yes, the world is changing around us, and it's safe to say that 'disruption' is the new normal for beer," Craig claimed.

THREE EXAMPLES. To illustrate his point, Craig walked through three challenges that occur "when nominal disruptors become the establishment.

"First of all, so-called disruptors start to behave like marketplace leaders," Craig said i.e. Uber becoming an establishment taxi company. And in beer, Craig said, "we've seen smaller-scale brands become dominant in their segment and work to limit competition from still smaller and newer brands."

"Second, disrupters become acquisition targets of larger, more established players," Craig said, citing Unilever's billion-dollar acquisition of the four-year-old Dollar Shave Club. Uh yeah, plenty of that going on within the beer industry, including its own $1 billion acquisition with Constellation's purchase of Ballast Point.

"Finally, establishment players and industry giants begin to disrupt their own markets," Craig said, pointing to brick-and-mortar retail giants like Wal-Mart and Staples becoming top five online retailers. That's going on in beer too, with the large brewers snatching up smaller brewers at a blistering pace and the world's two largest brewers merging into one.

TIME TO LEAN IN. So what are we to do in beer's changing landscape? "Lean in," Craig said.

A TACTIC OUT OF AMAZON'S PLAYBOOK. It's a strategy he learned from one of the biggest disruptors on the planet, Jeff Bezos, founder of Amazon, who was quoted saying: "What we need to do is always lean into the future; when the world changes around you and when it changes against you - what used to be a tailwind is now a headwind - you have to lean into that and figure out what to do."

HOW THE NBWA HAS LEANED IN. So when MegaBrew started to become a reality last year, the NBWA saw it as an opportunity to lean in and "educate policymakers and others about the value that independent distributors provide," Craig said. "Throughout the DOJ's examination, NBWA worked to ensure that 1) distributor independence is maintained 2) that marketplace competition is sustained and 3) that consumer choice is preserved," Craig said and the "DOJ got the message."

The NBWA also leaned in this past year, "when a major national retailer raised eyebrows with their ambitious, illegal category management initiative," Craig said, by asking for clarification regarding trade practice regulations.

Craig and company leaned in once more through its collaboration with the Beer Institute and Brewers Association on federal excise taxes, which gave rise to The Craft Beverage Modernization and Tax Reform Act.

LEANING IN TOGETHER. Craig also acknowledged that distributors, themselves, "are leaning in every day," through "warehouse tours; supporting the PAC; investing in the Next Generation; and building relationships.

"That's why it's safe to say that NBWA - and America's beer distributors - are well-positioned for disruption, no matter where it comes from," said Craig closing his speech. "Together, we will lean into the future to turn headwinds into tailwinds and protect, preserve and grow your investment in this great industry."

BEER BRIEFS:

BUDWEISER IS TESTING retro stubby bottles with consumers in Seattle. (Like Coors Banquet has done).
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AND HERE IS A-B leadership and the Wholesaler Panel at the Presidential Debate:
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BEER SUMMIT SPONSORSHIP OPPORTUNITIES. We will be accepting a limited number of sponsorships for our 2017 Summit at the Hotel Del Coronado in January. For more info on pricing and opportunities, please email rena@beernet.com

Until tomorrow, Harry

"A friend is a second self."
- Aristotle

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