Virginia Craft Brewers Guild Pursuing Legislation to Help Members Self-Distribute
The Virginia Craft Brewers Guild (VCBG) could be in the beer distribution business by next summer, it announced last week.
VCBG plans to lobby the state General Assembly for legal approval to form the Virginia Beer Distribution Company (VDBC), a separate entity that will make it easier for craft breweries in the commonwealth to distribute their own products.
It will be modeled after the Virginia Wine Distribution Company (VWDC), which the General Assembly enacted in 2007 to facilitate distribution of wines made by the state’s wineries. If the guild is successful, the VDBC could be operating by July 1, 2023.
Similar to VWDC, VDBC will operate within the Virginia Department of Agriculture and Consumer Services (VDACS), but will have an independent advisory board of members of the Virginia beer industry.
Breweries can pay a license fee to participate and transaction fees will support the VBDC’s operations. Wineries pay $6 per transaction, according to the VWDC website.
“The VCBG’s founding was driven by the need to make important legislative changes that would ensure the growth of craft beer in Virginia,” VCBG leadership council chair Janell Zurschmeide of Dirt Farm Brewing said in the release. “We are now the No. 1 southern craft beer state per capita, so this initiative is part of a long legacy of responding to market needs.”
VCBG president and CEO Brett Vassey told Richmond BizSense the passage of laws to create the VBDC would be the most significant legislation for craft brewers since 2012 when the state government cleared the way for on-site consumption at taprooms.
The guild has formed a working group that includes the Virginia Alcoholic Beverage Control Authority, VDACS, the Virginia Wineries Association, the Virginia Wine Wholesalers Association, the Virginia Beer Wholesalers Association, General Assembly members and representatives from Gov. Glenn Youngkin’s office. The group plans to report on its progress to the state House of Representatives and Senate by October 1.
Report: New Belgium, Bell’s to Raise Prices and Add Freight Surcharge
New Belgium Brewing and Bell’s Brewery are adding a freight on board (FOB) charge for wholesalers, in addition to price increases, Beer Marketer’s Insights (BMI) reported.
The changes are slated to go into effect this fall.
“We understand that many wholesalers desire to increase PTR [price-to-retailer] to cover increased costs,” chief sales officer Michael Corrigan wrote in a memo to the breweries’ wholesaler network BMI obtaine, adding that “New Belgium and Bell’s also feel the strain of increased costs, including freight.”
In one example provided, New Belgium suggested raising PTR by $1 per case and $5 per keg.
Price increases will vary by market, and New Belgium has developed a new method that will add $0.06 per case and $0.69 per keg on top of the FOB split the breweries typically enact with wholesaler partners, which is 70/30 of the PTR increase for packaged beer and 50/50 for kegs, according to BMI.
BA Announces New Campaign to Support ‘Indie’ Craft Beer
The Brewers Association (BA) launched “This is Indie Beer” last week, its latest campaign advocating for independent craft beer.
A followup to the trade group’s “Local Beer is Better,” the new project will “tell the stories and show the faces behind independent craft brewers” and “drive awareness of the independent craft brewer seal,” Ann Obenchain, BA marketing and communications director, wrote in a blog post August 12.
The national campaign will be supported with digital advertising on Facebook, Instagram, Reddit, Youtube and Tinder, which will direct people to ThisIsIndieBeer.com. The website features profiles of seven initial breweries, with more “to be added in the coming months.” They include Bale Breaker Brewing Company (Yakima, Washington); Green Bench Brewing Co. (St. Petersburg, Florida); Maine Beer Company (Freeport, Maine); NoDa Brewing (Charlotte, North Carolina); Pilot Project Brewing (Chicago, Illinois); Streetcar 82 Brewing Co. (Hyattsville, Maryland); White Lion Brewing (Springfield, Massaachusetts).
The website also includes a brewery finder for visitors to “determine if their favorite breweries are independent,” according to Obenchain. The campaign will run through the end of 2022.
Mark Anthony Brands, Coca-Cola and Flying Embers Facing New Class Action Lawsuits
Several bev-alc brands are facing class action lawsuits over misleading marketing and product descriptions.
Illinois resident Christine Borovoy filed a class action against Mark Anthony Brands’ White Claw Surge Natural Lime last week, alleging breaches of state consumer law, breach of warranty, negligent misrepresentation, fraud and unjust enrichment, Top Class Actions reported.
Submitted to an Illinois federal court, the filing alleges the White Claw Surge flavor’s name – as well as three “natural lime” statements on the hard seltzer’s label – suggests a large amount of lime, resulting in a premium price, however the product has “at most, a de minimis or negligible amount of lime.”
The lawsuit also alleges that White Claw’s description as a “spiked sparkling water” is misleading, as it implies the product contains distilled spirits, when the hard seltzer is sugar-based.
Similarly, a class action lawsuit has been filed against Topo Chico Margarita Hard Seltzer and alleged misrepresentation of the alcohol base, ClassAction.Org reported. The 14-page lawsuit filed against Coca-Cola Beverages alleges the hard seltzer’s packaging and labeling – which include images of agave plants and the word “margarita” – imply the product contains tequila, when it is rather “flavored beers that purpose to taste like a margarita.”
The lawsuit – representing consumers in New York, Montana, New Mexico, Idaho, SOuth Carolina, Uah, Mississippi and Alaska – also claims the use of “hard” in “hard seltzer” falsely implies the beverage is made with distilled spirits. Additionally, it claims the use of the Topo Chico name is misleading, as the drink does not contain the sparkling mineral water used in Coca-Cola’s non-alcoholic Topo Chico product.
Topo Chico Hard Seltzer is the product of a multi-year partnership between Coca-Cola and Molson Coors Beverage Company, created in 2020. Through the partnership agreement, Molson Coors is charged with the manufacturing, marketing and distribution of the product.
The brand’s margarita pack was announced in October and released earlier this year.
“Most of the prepackaged margarita flavored options out there right now taste artificial and nothing like the actual cocktail,” Matt Escalante, Molson Coors’ senior director of hard seltzers, said in an October press release. “With Topo Chico Margarita Hard Seltzer, we’re capturing the complexity of a real margarita in hard seltzer form infused with lime, salt and tequila notes and lightly sweetened with agave.”
And in the Middle District of Florida, Tampa Division, a lawsuit has been filed against Ojai, California-based hard kombucha and hard seltzer-maker, Flying Embers, Beer Business Daily reported.
The lawsuit – filed against Flying Embers’ parent company Fermented Sciences, Inc. – alleges the use of advertising claims for Flying Embers products such as “Crafted with Live Probiotics,” “Real Botanicals,” and “Antioxidants” violate the Food and Drug Administration’s (FDA’s) guidelines, which discourage the addition of “vitamins and minerals to alcoholic beverages” and the “random fortification of food” which can “result in deceptive or misleading claims.”
Flying Embers touting these added ingredients allegedly mislead consumers to “misconstrue the negative effects of even moderate amounts of alcohol consumption,” the lawsuit claims.
A similar lawsuit was filed against Fermented Sciences in the Northern District Court of Illinois, Eastern Division, in October 2021.
Drizly Launches Brand Accelerator Program; Committed $4 Million to DEI Initiatives
The e-commerce alcohol delivery platform Drizly launched its brand accelerator program, Sip with Purpose, this week.
Sip with Purpose is “designed to drive equity within the beverage alcohol industry,” and will give brands “access, training and insights across the three tiers of the beverage alcohol industry,” according to a press release. To qualify, at least one or more owners of participating brands must identify as a “member of a historically underrepresented group” and have “at least 50% ownership of the brand’s equity or interests.
Three bev-alc brands will be chosen for the inaugural class. Each brand will have access to training sessions, “introductory meetings” with retailers and distributors, marketplace data and mentorship opportunities, as well as free advertising on Drizly for one year.
Applications for Sip with Purpose are open until September 12: apply here.
Drizly has also committed $4 million in media spending to “raise awareness and support” for bev-alc brands owned by entrepreneurs belonging to historically underrepresented groups. Additionally, the platform launched a “centralized hub” where consumers can browse through products from minority owners, and has implemented a search filter to allow shoppers to search by brand ownership.
Beer Institute Responds to Inflation Reduction Act
The Beer Institute (BI) panned the Inflation Reduction Act, which President Joe Biden signed into law on Tuesday.
“We are deeply concerned by lawmakers’ vote to increase taxes on businesses amidst an unprecedented and unpredictable economic environment,” BI director of public affairs Alex Davidson said in a statement. “As a national trade association representing the dynamic American beer industry, which generates $331 billion in economic activity annually and supports more than two million American jobs, we fear this will have serious economic repercussions for the more than 6,600 brewers across the country still recovering from the COVID-19 pandemic.”
The Inflation Reduction Act includes a 15% minimum tax rate for large corporations – those making more than $1 billion – but Wall Street analysts told CNBC they don’t expect the new policy to “dramatically affect company earnings or their future investments.”