• 💸 Tariffs Spark N. American Trade War 
• 🥃 New CA Spirits Distrib's Mission
• 📉 Circana: Off-Prem Sales Not ‘Pretty’
• 🗣️ ‘We’re Taking Back Corona’s Beach’
• 🐊 Cayman Jacked Kicks It Up a Notch

President Donald Trump launched a trade war today with the United States’ North American trade partners, Canada and Mexico, implementing 25% tariffs on goods imported from each country. 

Trump also doubled existing duties on goods from China to 20%. China responded with 15% tariffs on farm products from the U.S, such as chicken, pork, soy, beef, wheat corn and cotton, set to go into effect March 10, according to the Associated Press.

Canadian Prime Minister Justin Trudeau announced Canada’s own retaliatory tariffs, including a 25% duty on $155 billion in American goods, with tariffs on $30 billion going into effect immediately and the remainder following in three weeks, per CNN.

Among Trump’s reasoning for the tariffs on Mexico and Canada is his belief that neither nation is doing enough to curb the influx of fentanyl to the U.S., which has been largely debunked. 

Trudeau said “there is absolutely no justification or need whatsoever for these tariffs today” and called Trump’s fentanyl excuse “completely bogus.”

U.S. Customs and Border Protection statistics for 2024 showed that of the 21,889 pounds of fentanyl seized last year, around 0.2% (43 pounds) came from the Canadian border, while around 96.6% (21,148 pounds) came from the Mexican border. 

Trudeau said: "I want to speak first directly to the American people. We don't want this. We want to work with you as a friend and ally. We don't want to see you hurt either. But your government has chosen to do this to you.”

Meanwhile, Mexico is expected to announce retaliatory tariffs on Sunday. 

Within the beer industry, all eyes have now turned to Constellation Brands, whose Mexican import brands Modelo, Corona, Pacific and Victoria have been growth drivers within the beer category. Due to a consent decree, the company is required to import its products from Mexico.

Constellation beer division president and EVP Jim Sabia addressed the news during Constellation’s Gold Network Summit with its distributor partners this morning. 

“Consistent with what we have said before, we will continue to evaluate the levers at our disposal around inventory, cost and pricing. These are going to have implications for our suppliers, distributors, retailers and our consumers that also need to be factored in.”

The Brewers Association (BA) noted that its craft brewery members could see impacts on barley, aluminum, oil and energy costs and reciprocal tariffs on beverage-alcohol exports to Canada and Mexico. The trade group encouraged members to contact their supplier partners.

Insiders can read more about the tariffs, additional tariffs on aluminum and steel, Wall Street’s response and more.

Gain cutting-edge insights from industry leaders, explore new technologies, and hone your skills at the Craft Brewers Conference, April 28-May 1 in Indianapolis Learn more

When Adam Spiegel founded Sonoma Distilling Company in 2010, it was the 15th distillery to open in California. Now the Golden State boasts more than 300 distilleries, more than any other state, and Spiegel is embarking on a new chapter aiming to help revitalize what he calls a “broken three-tier system.”

Spiegel launched Freebrook Imports, a boutique spirit distribution and import company that will initially operate in Northern California. With 2,700 distilleries now in the U.S. and a consolidated three-tier landscape, Spiegel sees his next task as expanding the paths to market for emerging brands.

Simmering tensions over distribution have come to a boil in recent years, as slower spirit sales pile the pressure on all tiers. The top 10 wholesalers now hold 80% of market share with the top two – Southern Glazer’s Wine & Spirits and Republic National Distributing Company – accounting for more than 50%, according Shanken’s April 2024 Impact Newsletter.

As major distributors have scooped up smaller regional houses, groups like the American Craft Spirits Association (ACSA) argue that increasing power tips the scale against smaller craft brands that need to develop regional footprints. According to a 2024 ACSA survey on distribution, most craft distillers (72%) are seeking distribution in one or more states, but just over half of them (51%) have been turned down and 22% have given up looking.

Spiegel said: “There is a hole in the market that exists.”

Insiders can read more about Freebrook’s goals, the profile of brands it’s looking to represent and challenges Spiegel expects to hit on the way.

Bev-alc off-premise data declined again, with dollar sales -6% both YoY and WoW for the week ending February 23, according to Circana. 

Circana EVP of bev-alc Scott Scanlon wrote: “The data is not painting a pretty picture this week.  Coming off SuperBowl Sunday (day of) purchases along with Valentine’s Day at end of week prior, we were not looking for stellar growth this week, but also was not anticipating negativity across the board.”

Beer contributed the greatest YoY drag (-8.1%) of all major categories, followed by wine (-4.4%) and spirits (-0.9%). RTDs, which include products from all 3, declined -1%. 

Within the beer category, No. 20 Constellation Brands’ Pacifico was the largest brand to grow dollar sales (+19.7%) during the week. No. 7 Mark Anthony Brands’ White Claw was nearly flat (-0.2%), and No. 15 Mark Anthony’s Mike’s Harder Lemonade was flat. 

Scanlon noted: “Many point to the non-alcoholic trend to answer the consumption reduction question, and while it is certainly a piece, we are also seeing non-alcohol compress as well.”

Athletic’s dollar sales decelerated WoW (+17.8% for w/e February 23 compared to +21.9% for w/e February 16). 

Scanlon wrote: “Upcoming, [I] was hoping we could trust the trends of previous years in between Valentine’s Day and St. Patrick’s holiday, but we are seeing more weakness than anticipated. As we head into St. Patrick’s Day it will be interesting to watch beer: American [domestic] super premium, Mexican, non-alcohol, and of course the Guinness gain. 

“Spirits RTDs will likely continue to gain momentum and wine will stabilize after separation from Valentine’s Day surge.”

Of note, the Diageo-owned Guinness brand family increased dollar sales (+2.4%) but declined in volume (-0.7%). A-B’s Bud brand family ($76.8 million) outsold Constellation’s Modelo ($75.3 million), but Bud’s dollar sales declines (-14.4%) outpaced Modelo’s (-9.8%). 

– Constellation Brands EVP and managing director of beer brands, Mallika Monteiro said during the beer giant’s annual Gold Network Summit today in Orlando, Florida. 

Monteiro said: “A few years ago, we invited celebrities to Corona's beach, and early on, that got us more notice. But very quickly, our beach got crowded. We forgot that the only celebrity you need on Corona's Beach is Corona.” 

The solution: Constellation Brands is ditching the celebrities (for the most part) and encouraging consumers to find their own beach with a new Corona campaign “La Playa Awaits.” The campaign will launch during Major League Baseball’s Opening Day and extend through the year. 

Look for further coverage of the Gold Network Summit on Brewbound.com later this week.

Jon Renthrope, CEO and brewmaster of New Orleans-based Cajun Fire Brewing, grabs A Round With Brewbound in this Insider-exclusive Q&A with industry leaders.  

He shares insights gained from founding the first Black-owned brewery in Louisiana since Prohibition, and from exploring international markets, as well as goals for his term as president of the National Black Brewers Association (NB2A).

Here is our conversation with Jon, lightly edited for clarity …

You’re the first Black owner of a brewery in the state since Prohibition. What has that meant to you personally?

Jon: Being the first of anything carries with it a high level of responsibility and accountability.  Because of the significance, my company is put in a space of expectation where it is front-facing.  

While it does add to anxieties of running day-to-day operations, I feel the brand operates within a headspace where we have to succeed to ensure that we are not the last Black-owned company in my region. 

Unfortunately, my company serves as a case study of just how impactful historical redlining, Prohibition, lack of access to capital, Jim Crow laws, eminent domain and supplier discrimination still are. These are things that I as an owner in this industry have to navigate in the present day. It is a landscape that necessitates the need for entities like the NB2A to not only exist, but be successful in its mission.

Insiders can read more from Jon about how the Louisiana industry has changed since Cajun Fire opened in 2011, how the NB2A is strengthening craft beer and what he’s learned from exploring the export market.

The Brewbound team is hitting the road and heading to the Craft Brewers Conference on April 28 – May 1 in Indianapolis, Indiana.

The Brewbound trio will be on the ground, covering all the latest news and presentations coming out of the conference, as well as hosting live podcast interviews at the Brewbound booth (#512).

Make sure to stop by our booth #512, where Brewbound will be chatting with brewery founders and owners, beverage entrepreneurs and c-suite leadership across the industry. Whether you’re a business vet or just starting out, we’d love to meet you and hear what’s new.

How to Connect with Us:

• Stop by our booth (#512): We’re excited to set up our Brewbound Podcast studio at BrewExpo America and engage with brewery leaders and industry suppliers. Swing by to meet our team, watch a podcast interview recording, participate in social content, and walk away with a T-shirt.
• Submit your news: Have news or updates from your brewery? Our team is covering the event and would love to hear from you. Submit your news here.
• Contact us to set up a time to chat: Want to schedule time to connect or be part of our coverage? Reach out to us at news@brewbound.com.

Exhibit A in the argument that an ABV arms race is starting in the FMB segment: Mark Anthony Brands’ Cayman Jacked rolls out this month.

As other major bev-alc producers – including Cayman Jack’s siblings White Claw and Mike’s Hard Lemonade – have introduced 8% ABV versions of popular FMBs and hard seltzer, Mark Anthony’s tropical cocktail-inspired FMB is going even harder. 

Specs:

• ABV: 10%
• Flavors: Original Margarita, Strawberry Margarita
• Package formats: 19.2 oz. single-serve cans