The Weekly Sip: S&P rating could spell trouble for beverages | AB InBev crafts IPA using ‘spellers’ method
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The Weekly Sip is Food Dive’s column focused on the latest news in the rapidly changing and growing beverage sector. From inaugural product lines to big investments and controversial topics, this column aims to quench the thirst for developments in the category.
S&P report urges beverage industry to invest in innovation
Wall Street index tracker S&P Global Ratings said beverage producers will have to contend with more hesitancy from consumers who are cutting back on their spending.
In a report released Tuesday, S&P said its 2024 outlook for the industry has shifted from “positive” to “stable,” reflecting the volatile economic environment for beverage producers.
“Companies are largely operating within their financial policy targets and will need to invest in innovation to tailor their product mix to meet a more cautious consumer,” the report said.
The group said sales growth in the category could reach pre-pandemic levels with softer pricing for drinks, along with higher volumes as pandemic-era supply chain issues subside. According to S&P, beverage producers will have to boost their spending on advertising and marketing campaigns in order to offset losses in operational costs.
Companies producing both alcoholic and booze-free beverages face growing competition and rapidly changing consumer tastes in the crowded category. This is particularly among Gen Z drinkers, who are often limiting their alcohol consumption and seeking more unique flavors.
Given the contentious state of the beverage category, S&P also said it does not predict large M&A activity this year, despite some companies having strong funds. While there is demand for more mergers and acquisitions across the food and beverage industry, producers continue to face headwinds like higher interest rates and volume declines.
— Chris Casey
Get on Board Hazy IPA is first beer made using ‘spellers’ method
Golden Road Brewing has debuted Get on Board Hazy IPA, a craft offering the beer maker said supports nonspeaking autism.
According to the AB InBev-owned brewer, Get on Board Hazy IPA is the first beer to be made using the spellers method where nonspeaking autistic individuals communicate by pointing to words on a letterboard. Golden Road founder Meg Gill has a daughter who has been learning to communicate through the spellers method.
“We’re extremely proud to bring awareness to Spellers and their families,” Gill said in an email to Food Dive. “They did the hard work and pioneered this amazing communication method – our goal is that our partnership will bring hope and inspiration to millions of beer drinkers and fans around the country.”
The Get On Board Hazy IPA, a wheat beer that showcases juicy orange, eureka lemon and subtle peach flavors, will be available for purchase at select retailers throughout southern California starting April 25th.
Golden Road Brewing has embraced special brews to support other causes before. It developed Hazy Pup IPA to support rescue dogs, Heal the Bay IPA to keep southern California’s waters and watersheds safe and clean, and All Pale the Queen to support Pink Boots on International Women’s Day.
— Christopher Doering
Diageo brings blackberries into Crown Royal Whisky
With its new flavor, Crown Royal is ready to anoint blackberry whiskey lemonade the “drink of the summer” for 2024.
The Diageo-owned Canadian brand is launching Crown Royal Blackberry Flavored Whisky, infused with the dark-colored fruit’s juiciness with a hint of vanilla and caramel, according to the brand.
“This new whisky is a testament to our dedication to innovation, as we aim to cater to the evolving preferences of loyal Crown drinkers and spirit connoisseurs alike,” said Jesse Damashek, the senior vice president of North American Whiskeys at Diageo, in a statement.
The flavor came about after the brand observed buzz on social media about blackberry-infused cocktails like the aforementioned lemonade. The brand recommended other cocktails using the spirit, including the Bramble, Collins and mojito.
In its annual cocktails report for 2024, rum maker Bacardi found consumers are increasingly turning to natural, escapist drinks that they can make at home with tonic or seltzer.
— Chris Casey
Companies use science to tap cannabis beverage possibilities
Cannabis tech company Vertosa announced a strategic partnership with German based ingredients maker Döhler Ventures — whose portfolio includes natural flavors and colors — to create “innovative life science products in the beverage sector.”
According to the companies, the collaboration will allow them to co-create beverages in the cannabis and hemp categories, by combining Döhler’s ingredient capabilities with Vertosa’s technologies.
Benjamin Larson, CEO of Vertosa, said in the press release the partnership is focused on setting a new gold standard for the cannabis industry.
“By combining our expertise in natural ingredients with Vertosa's infusion technology, we're not just innovating, we're leading the way together,” said Paul Graham, Döhler North America’s CEO. “It's real, it's authentic and it's a step into a future where we explore the possibilities for enhanced and better drinks.”
Vertosa, which was founded in 2018, uses emulsion systems to infuse cannabis into products, according to the company, and has collaborated with beverage companies like Boston Beer and Mary Jones on their cannabis-infused drinks. The company also said it has knowledge of the complicated legal and regulatory issues associated with the category.
THC-infused beverages have gained steam over the past year — despite the FDA deciding not to regulate the ingredient in food and beverage products early last year. Producers in the space are still eagerly seeking to win over consumers in the states where they are allowed to sell the products.
— Chris Casey
