• ⚔️ How A Trade War Impacts Craft Distillers
• 🧑‍⚖️ California Hemp Ban Will Remain In Place
• 📉 Spirits Sales Continue to Dip
• 📰 What We’re Reading: Shelf-stable Milk Miracle

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In more ways than one, a visit to the NACS trade show is something of a trip into an alternate dimension, one where the energy drinks never stop flowing and where Americans still guzzle sugary sodas by the caseload (actually not too far from the truth, per the latest Nielsen numbers). But within that latter space – even amongst the hardcore sugar adherents, like Jarritos – there was a sense of a category shift. 

Olipop has been one of the beverage industry’s biggest growth stories over the past few years, but closing the gap in convenience may be its biggest task yet. The prebiotic soda company’s NACS debut underscores the channel’s priority: it’s around 10% of Olipop’s total business right now, in around 7,000 doors including Wawa, Pilot and Casey’s. But next year that number will go up to over 25,000 locations, with support coming from new channel-exclusive 12 oz. slim cans, rolling out now in seven flavors (the newest being the Mountain Dew-ish Ridge Rush) for $2.99 each.

As for Mexican soda Jarritos, it’s also once again attempting to crack a stubborn problem: creating and finding space for a zero-sugar subline. Past efforts came at “not the right time,” said reps, but the brand is hoping that a new Sucralose-sweetened formula currently being tested in one SKU (top-seller Mandarin) in California and Texas can finally unlock a long-coveted consumer segment.

And in the midst of soda’s current revival, complacency is not an option: besides the flood of independents in the mix (like newcomer No Cap!), platform brands like Suja (with Slice), Talking Rain (Popwell), and Jones Soda (Pop Jones) are all dropping new releases, and then there’s the entrance of Liquid Death with its soda-style sparkling flavors, too. 

What are category giants Coke, KDP and Pepsi doing amidst this soda upheaval? Sticking to their guns, mostly. As previously noted, all three brands are leaning into cream flavors and refreshing their flagship lines with new innovation this year. But for Coca Cola, at least, it’s looking in other directions for inspiration.

Recall that last year’s big NACS launch – Coca Cola Spiced, intended as a permanent new flavor – was developed based on data and feedback from its Freestyle fountain machines; that release was shelved after less than a year on the market. This year, rather, the inspiration for Sprite + Tea is coming from TikTok trends. Could protein soda be next?

Click here to read more coverage from NACS 2024, including a look into C4’s growing energy platform and more on soda’s expanding reach.

With tariffs talk buzzing on the campaign trail, there’s one voting demographic who knows the effects of a trade war all too well – craft distillers.

🥃 While the candidates talk potential tariffs, whiskey distillers are already facing one impending deadline: a retaliatory European Union tariff imposed on American whiskeys, which will snap back to 50% if there is no agreement between the U.S. and EU in an ongoing steel and aluminum tariff dispute by March 31, 2025. 

🚢 U.S. whiskey exporters have had success building back exports levels since the tariffs were suspended, but the back-and-forth has had a major impact on craft distillers. 

💱 Craft exports are at a third of the level prior to when the tariffs were implemented. Some have stayed in the game, shouldering the extra costs and convincing European distributors that they are committed no matter what. Others have given up – the anxiety of the tariffs returning enough to look at markets elsewhere. 

Read the full story on BevNET.

A Calif. State judge ruled against Cheech and Chong Global Holdings Inc., trade group U.S. Hemp Roundtable Inc. and a number of other retailers in a bid for a temporary restraining order on Governor Newsom’s emergency regulations regarding hemp-derived THC. 

❌ The judge’s denial for a stay on the emergency rules was based on not demonstrating that it would “cause widespread and catastrophic destruction of the hemp industry.”

💬 The court argued that “the fact that the state waited almost three years to enact these regulations does not undermine the finding of an emergency. The emergency became clear over time based upon the proliferation of offending products and the reports of illness, hospitalizations, and deaths."

📊  The judge’s decision is counter to what cannabis industry economics firm Whitney Economics estimated where about 83.3% of respondents said they would either go out of business, move to another state and/or transition their business online.

💰 According to Whitney Economics, the total potential market (TAM) of California’s hemp-derived market is $3.65 billion and accounts for over 41,000 jobs.

Read the full analysis on BevNET to understand how the emergency regulations could impact California’s cannabis industry.

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“Broader consumption trends are cause for concern,” according to new data from WSWA's SipSource which revealed that spirits depletions – actual sales from wholesalers to over 450,000 retailers nationwide – declined 3.9% in the 12 months through August 2024.  

⚠️ Despite earlier optimism that destocking and seasonal shipping patterns would shift the numbers, analysts noted that broader consumption trends are cause for concern and premiumization, once a major growth driver, is now facing pressure in a tightening market. 

• The $100+ price tier in spirits within bars and restaurants performed the worst, declining 12.5%, while mid-range tiers, such as between $50 to $99.99, saw a more moderate decline of 3.9% in on-premise depletions. 
• But for off-premise – where over 80% of consumer market volume lies – the $100+ tier fell by 8.5%, while the between $50 to $99.99 tier dropped 4.3%.

💰 Mexico has sent 660 soldiers and militarized National Guard officers this month to the state of Michoacan to protect lime producers who claim drug cartels are demanding a percentage of revenues, according to an AP report.

🥜 The New York Times’s Hank Sanders interviewed the marketing minds behind a series of bizarre videos posted on the cookie brand Nutter Butter’s TikTok page that have racked up millions of views: “Are they funny, disturbing or cutting edge? Yes,” Sanders writes.

🥛 Americans seem to be sour on the idea of shelf-stable milk, which accounts for 3% of the U.S. milk market yet is “wildly popular in many parts of the world,” according to The Atlantic.

🧈 Surging butter prices in Europe are signaling an expensive holiday season for bakers, who are already burned by high chocolate and sugar costs, Reuters reported.