Sproutly Taps New President From Anheuser-Busch InBev And Kimberley-Clark

CANADA: Sproutly Canada has tapped senior marketer Bryan Semkuley as President of Sproutly to accelerate the Company’s strategic objectives of becoming a leading cannabis formulations company focused on beverages.

“We are pleased that Mr. Semkuley has chosen to join the leadership team of Sproutly as President,” said Keith Dolo, CEO and Chairman of Sproutly.  “Bryan brings significant experience in branding, marketing, sales, and most importantly global product innovation and expertise from recognized multinational consumer packaged goods and beverage companies.  Our ability to continue executing on our business objectives, defining our competitive advantages, and attracting top talent to our management team and board of directors further validates our commitment to becoming a leading cannabis company with a clear focus on the beverage category,” he concluded.

Sproutly CanadaBryan Semkuley is a seasoned executive with over 30+ years leading global innovation and marketing teams for Fortune 200 companies including Kimberly-Clark, Anheuser-Busch InBev, and Labatt. Mr. Semkuley will focus on the execution of the Company’s strategic objectives, development of its operational plan, and will work diligently to tie in the different vertical divisions of sales, marketing, product innovation, operations, and branding to deliver top-line growth.

Mr. Semkuley has extensive experience and a proven established track record of building new and existing brands and businesses through new product development, channel relationships and commercial innovation.  Prior to joining Sproutly, Mr. Semkuley was Vice President, Global Innovation/Industrial Sector at Kimberly-Clark, a US$19B NYSE-listed American multinational consumer packaged goods company focused on personal care products.  Before joining Kimberly-Clark, Mr. Semkuley spent over 25 years at Anheuser-Busch InBev, a US$130B NYSE-listed beverage company, and Labatt as Vice President Global Innovation, Vice President Global Brand Marketing, and Vice President Marketing, amongst other roles.

“Bryan’s experience leading R&D, marketing and product innovation teams of more than 70 plus key staff, specifically focused on new product development, new global revenue streams, and creating brands that win, will provide value through Sproutly’s continual advancement to become a leader in cannabis beverages and formulations,” said Keith Dolo.

Mr. Semkuley commented, “I look forward to joining the Sproutly team and building the business during a very exciting time for the industry. Building new brands and businesses has been a passion of mine. I look forward to future success of Sproutly, especially with our exciting technologies.”

The appointment is subject to customary approvals of the Canadian Securities Exchange.

Molson Coors Canada and HEXO Announce Agreement to Create JV Focused On Cannabis-Infused Beverages

CANADA: Molson Coors Canada, the Canadian business unit of Molson Coors Brewing Company, and leading Canadian cannabis producer, The Hydropothecary Corporation (HEXO), are pleased to announce that they have entered into a definitive agreement to form a joint venture to pursue opportunities to develop non-alcoholic, cannabis-infused beverages for the Canadian market following legalization.

The joint venture will be structured as a standalone start-up company with its own board of directors and an independent management team. Molson Coors Canada will have a 57.5% controlling interest in the JV, with HEXO having the remaining ownership interest. The new company will combine the proven beverage experience of Canada’s leading brewer with a recognized innovator in the fast-growing cannabis sector to explore the highly anticipated consumable cannabis market, which is expected to be legally permissible in Canada in 2019.

Molson Coors Canada and HEXO Announce Agreement

Molson Coors Canada and HEXO Announce Agreement

“Canada is breaking new ground in the cannabis sector and, as one of the country’s leading beverage companies, Molson Coors Canada has a unique opportunity to participate in this exciting and rapidly expanding consumer segment. This new venture is consistent with our growth strategy and our commitment to being First Choice for Consumers and Customers by ensuring that Canadians have access to high-quality products that meet their evolving drinking preferences,” said Frederic Landtmeters, President and CEO of Molson Coors Canada. “While we remain a beer business at our core, we are excited to create a separate new venture with a trusted partner that will be a market leader in offering Canadian consumers new experiences with quality, reliable and consistent non-alcoholic, cannabis-infused beverages. We look forward to partnering with HEXO, a recognized leader in the medical cannabis space in Canada that will bring robust production capacity, a track record of innovation, and, most importantly, shared values when it comes to doing business the right way and earning the trust of consumers.”

“HEXO continues to lead the way for smoke-free cannabis innovation in Canada. We are excited about this partnership with Molson Coors Canada, an iconic leader in adult beverages, as we embark on the journey of building a brand new market. With this new company, we are bringing together Quebec’s oldest, most established company with one of its newest success stories in a truly innovative partnership,” said HEXO’s CEO and co-founder Sebastien St-Louis. “As two leading companies who share a track record of excellent practices, as well as respect for law and regulations, HEXO and Molson Coors Canada have established a relationship built on trust, and together we will develop responsible, high-quality cannabis-infused beverages for the consumable cannabis market in Canada.”

Closing of the transaction, which is targeted to occur before September 30, 2018, is subject to the satisfaction of certain conditions, including execution and delivery of various transaction agreements, including governance documents and R&D and supply agreements. In connection with the closing of the transaction, subject to the final approval of the Toronto Stock Exchange, HEXO will issue to Molson Coors Canada warrants to purchase shares of HEXO.

Legalization of Cannabis Will Not Blunt Wine and Liquor Purchases, New TABS Analytics Report Reveals

CONNECTICUT: As legalized, recreational cannabis becomes available in more states, it is not expected to have a significant impact on the purchasing of wine and liquor, according to the TABS Analytics 2018 Wine and Liquor Study. Similarly, consumers are not strongly influenced by brand, outlet and price when it comes to their making purchasing decisions. Even though nearly two-thirds of consumers make wine or alcohol purchases, the study shows a highly fragmented, immature market in which 27 percent or fewer of survey respondents noted they were familiar with liquor brands and only 19 percent for wine. In comparison, brand engagement for other consumer packaged goods (CPG) categories typically exceeds 40 percent to 50 percent, with customers shopping more frequently at specific outlets, while seeking discounts and other deals.

“The wine and liquor markets are quite unlike any of the other CPG categories TABS tracks. Both categories are intensely fragmented, and consumers are not as heavily engaged in purchasing, which results in weaker brand power than we see in categories like cosmetics, vitamins or grocery,” said Dr. Kurt Jetta, president and founder of TABS Analytics. “Additionally, we don’t see the traditional deal-seeking behavior consumers typically exhibit when it comes to the beverage alcohol market. Even though outlets like Costco, Walmart and Trader Joes – which offer lower costs products – are among the top retailers, prohibitions on discounting liquors and other state-specific regulatory limitations to where these products can be sold result in pricing being less of a driver.”

TABS Analytics’ inaugural Wine and Liquor survey was conducted in June 2018 by SSI Research to examine key consumer, product and channel trends across 11 types of red and white wines and eight types of liquor, as well as attitudes toward use of cannabis. The survey included 1,900 geographically and demographically dispersed consumers, ages 21 and older.

Other key findings from the study include:

    • Legalization of cannabis to have minimal impact on beverage alcohol sales – Only 5 percent of regular wine purchasers and 9 percent of regular liquor purchasers indicated strongly that they would drink less if cannabis was legalized. Further, there does not appear to be a strong constituency against the legalization of cannabis, with less than 20 percent of wine and liquor drinkers saying they strongly opposed legalization.
    • Higher Education and Income Drive Wine and Liquor Purchases – Education has a high correlation with wine purchasing, growing from 29 percent for high school graduates or less to 60 percent for those with post-graduate degrees. Liquor purchases follow a similar trajectory, peaking at 40 percent with college graduates. Income appears to be a stronger predictor than education, however, for wine purchase levels, with 68 percent of consumers with incomes of $250,000 or more saying they regularly purchase wine. Liquor also shows upward momentum at higher income levels but is only regularly purchased by 42 percent in the highest income bracket. The survey also showed definite skews in ethnicity, with white consumers purchasing wine more frequently, black consumers purchasing liquor more frequently, and Hispanic and Asian purchasers at equally high levels for wine and liquor.
    • Geographic Wine and Alcohol Preferences Defy Conventional Wisdom – With the popularity of wine destinations of Napa and Sonoma in California, one would expect the West to dominate in wine purchasing. However, looking at regional preferences, the Northeast is the region where the largest percentage of people (53 percent) reported purchasing wine at least once during the past year, with the state of New Jersey outpacing the other top 13 states by a wide margin. Interestingly, the West region ranks lowest at 41 percent. Liquor purchasing is steady, around 35 percent in all regions overall. A closer look at census regions shows that only in the mid-South is liquor and wine purchasing equal at 41 percent.
    • Types of Wine and Liquor Purchased Highly Fragmented – Merlot (44 percent), Chardonnay and Cabernet (tied at 38 percent) are the top three types of wine purchased, while the remaining eight types are being purchased by 33 percent or fewer of consumers. At 61 percent, vodka is the most popular alcohol, with whiskey (45 percent), rum (36 percent) and tequila (35 percent) rounding out the top four types.
  • Walmart leads in wine, specialty retailers in liquor – Walmart accounts for 29 percent of wine purchases, followed by Costco (21 percent) and specialty retailers (19 percent). For liquor, specialty retailers rank at the top with 27 percent, followed by Walmart (20 percent), Costco (16 percent) and ABC stores (16 percent). The rest of the market for both wine and liquor is highly fragmented, with most other types of outlets accounting for less than 10 percent, including eComm, which has an estimated share of 5 percent

“Based on our survey, the wine and liquor industry appear immature, from the standpoint of market structure and consumer attitude, at present time,” Jetta said. “The combination of these factors create a fertile landscape for targeted marketing and investment spending to drive greater brand awareness. Since preferences and popularity of types of wines or liquors can change on a whim with a little catalyst, visibility at retailers – either through promotions at point of purchase or greater share of shelf – becomes disproportionate for wine and alcohol brands.”

Throughout 2018, TABS Analytics is conducting five studies across the consumer-packaged goods industry including: baby care, vitamins, wine and liquor, food and beverage, and cosmetics. The next webinar, on the food and beverage industry, will take place on September 12, 2018.