Discussions on THC and Beer Dominate NBWA’s 87th Annual Event
The National Beer Wholesalers Association (NBWA) wrapped up its 87th Annual Convention and Product Showcase in San Diego on October 1. Filled with 1,700 distributors and beverage professionals and over 150 booths, this year’s event proved to be another successful endeavor for the organization.
The opening general session began with an acknowledgement from NBWA outgoing chairman Jim Fabiano on the recent devastation throughout the southeast from Hurricane Helene.
“There will be a long road to recovery and we are taking action as an association to provide support during this difficult time,” he said. “In 2017, the Independent Beer Distributors Relief Fund was established in Texas following the destruction of Hurricane Harvey. This fund will be making an immediate donation of $25,000, which NBWA will match.”
Following the convention, NBWA announced a combined $75,000 donation to the North Carolina Disaster Relief Fund to aid recovery from Hurricane Helene, as well as continued fundraising efforts to support communities affected by Hurricane Milton.
The Unsteady State of Beer
Even though the Golden State event was filled with speeches and presentations on the beer category’s resilience, there’s no denying the fear that permeated the walls of the Manchester Grand Hyatt hotel.
The beer market is still struggling — there’s no denying it. With increasing prices, an overly saturated craft beer market and rising preferences for no- or low-alcohol choices, brews have become a second choice for consumers.
“About five years ago at this convention, NBWA decided to talk openly about some of the challenges facing the beer category,” said NBWA president and CEO Craig Purser during the opening general session. “Since that time, these challenges have only grown, particularly among emerging LDA consumers. But now, beer is not alone.”
Just a few years ago, the spirits industry seemed to be immune from any slow-down, but not anymore. “Wine is likewise seeing some startling volume declines,” Purser continued. “Even liquor-based RTDs, which had been on a rocket ship ride up, are starting to lose some steam.”
On top of softening beer sales, Fabiano mentioned another challenge the industry is facing during the opening general session: big beverage makers’ entry into alcohol.
“When Coca Cola, Monster and Pepsi entered the licensed beverage arena, two of those companies decided to go to market with experienced alcohol distributors,” he said. “As you know, Pepsi first tried to go in another direction by forming their own corporate-owned wholesaler, Blue Cloud.”
This decision sparked a wide variety of stakeholders, including state alcohol regulators, public health, consumer organizations, state legislators and members of Congress to weigh in, raising questions about responsible marketing and trade practices.
Then, earlier this year, Pepsi announced they were making changes to their distribution and working to move its Hard Mountain Dew and other alcohol products to licensed, independent alcohol beverage distributors.
“We don’t know the long-term impact of their decision, but it sends a strong message about the strength of independent distribution,” Fabiano said.
Cannabis Beverages’ Entrance into the Industry
While whispers about beer’s uncertain future circled NBWA’s event, another striking trend made its presence known in just about every seminar: cannabis-infused beverages.
Fabiano mentioned at the opening general session about how the industry has been “grappling with how to handle the commercial opportunity and the regulatory uncertainty of hemp-derived THC beverages.”
Even though there is clearly a money-making opportunity with distributing cannabis beverages, the strict regulatory pressures alongside federal prohibition make it an undesirable market.
Christopher Lackner, executive director of the Hemp Beverage Alliance, addressed these issues along with other concerns during his seminar “What is the Future of Hemp-Infused Beverages?”
“The state-by-state changes are significant and it’s something that we’re always looking at,” he said. “I think all of our brands recognize the value of having these products in retail environments, especially next to their competitors. There is a huge growth opportunity for brick-and-mortar distribution.”
The legislation coming out on hemp and cannabis may give you whiplash, but most of it is intended to better the industry and create safer products for consumers. Take the 2018 Farm Bill, for example.
On Nov. 16, 2023, President Biden signed into law H.R. 6363, the Further Continuing Appropriations and Other Extensions Act, 2024, which extended the Agriculture Improvement Act of 2018, more commonly known as the 2018 Farm Bill. This extension allows authorized programs to continue through Sept. 30, 2024, according to the U.S. Department of Agriculture.
Lackner reiterated the need for an updated Farm Bill during his seminar, noting that the current bill “has several trillion dollars worth of money invested in it, and the definition of hemp is all of three or four pages. The priorities that the Farm Bill had were big ticket items, such as value crop insurance, climate change, etc. And those are the big things that are on the ballots, which are significantly negative for our industry.”
Keith Hochheiser, partner at Hochheiser & Akmal PLLC, also discussed THC-infused beverages in the seminar “Strategies to Strengthen the Independent Beverage Distributor.” Despite the regulatory uncertainty, many distributors still want to get their hands in the THC market. But there’s some factors that wholesalers need to be aware of, first.
“The biggest risk here is your company because you have a federal permit,” he said. “If your company violates the federal law, you can lose your permit and licenses.”
To prevent these losses, Hochheiser advised wholesalers to use a separate entity as your THC distribution.
“Another concern is insurance and product liability,” he said. “Everyone in the selling chain is liable for product liability, but when you have a separate, responsible supplier, they’re primarily liable and can take care of the claim themselves.”
“Making Moves” Racks in Record Attendance
NBWA’s Building Relationships and Empowering Women (BREW) initiative and the Alliance for Women in Beer co-hosted the largest Making Moves to-date, with more than 430 attendees joining the two-day event.
“Since we launched Making Moves three years ago, it has rapidly grown into a must-attend event for beverage professionals in all stages of their careers,” said Kim McKinnish, NBWA chief operating officer who leads the BREW and Alliance programs. “Women and men alike come to Making Moves to find connections, leadership training and timely industry insights they can’t find anywhere else. We’re thrilled about the overwhelming response to this year’s event and look forward to continuing to deliver a world-class experience for beverage leaders.”
Former CEO of Barstool Sports, Erika Ayers Badan, kicked off the event with an electric keynote about how to set your career up for success. “I’m a huge proponent of failure,” she said. “If you are constantly putting yourself in a place where you’re uncomfortable and learning how to fail and get back up — it trains you to handle a lot.”
The event also featured a star-studded lineup of speakers from across the beer and beverage industry, including Merrilee Kick with BuzzBallz and Southern Champion, JB Ryan with Molson Coors, and Laura Merritt with Diageo Beer Company, just to name a few.
New Incoming Chairwoman
On the final day, NBWA wrapped up its 87th Annual Convention and Product Showcase by naming Alabama’s Rebecca Maisel as its new board chair. The organization highlighted her significant experience in the industry, including serving as Senior Vice President of Legal and Government Affairs at Gulf Distributing Holdings, a third-generation family business based in Mobile, Alabama. She also previously served as chair of NBWA’s Next Generation Group and the Alabama Wholesale Beer Association.
“Having this board elect me to the officer corps of NBWA three years ago, running the chairs and standing here today as your chair, sends a message to our membership and to the beverage world that there is room at the very top of this industry for qualified emerging leaders who demonstrate passion and commitment to our mission,” said Maisel during a general session. “As chair, I assure you I will justify the confidence you have placed in me to lead this association.”
Reflecting on his time as chairman, Fabiano remarked, “I’m proud of the opportunity to serve this industry that I love so much to work with fellow distributors, across brands and markets, to help ensure a prosperous future for all of our businesses. With our collective strength, we will continue to drive our industry forward and face roadblocks and challenges head on. Thank you for the trust you have placed in me as your chairman over the last year.”
Looking forward to 2025, Purse noted that while the beer and beverage distribution is a durable business model, we all need to do our part to elevate beer amid the ongoing challenges.
“That requires us to invest and think creatively. And those investments need to focus on identifying new beer occasions,” he said. “We also must work to reinforce the advantages that beer has in the marketplace, including the on-premise market where many people discover new products. And brewers and distributors can’t give up on working together to elevate beer.”
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