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First Beverage Group Fronts New Divisions

Beer Business Daily:

The top dogs of First Beverage Group shared some new concretes about their two new divisions: an incubator fund and Beverage Intelligence Group consulting arm that are slated to ramp up in 2011.

BILL TALKS INVESTMENT TARGETS. Bill Anderson said the team has looked at over 300 brands in non-alcoholic and beverage categories in the last year and a half for its new mid-level incubator fund to provide capital to beverage cos. Some of the things they’re looking for include a hard-working team with a lean, well-thought-out business and distribution plan (FBG’s forte) that is highly differentiated in its segment. “We’re obviously very concerned with brands that talk about being in all 50 states overnight,” he said. They’re still developing a team that can provide financial management services. The plan is to launch more officially in mid-to-late February.

There will be plenty of cross-over between the new Beverage Intelligence Group consulting services and the investing arm. But brands that want to tap BIG from the outside will be offered  distribution network strategies, distribution agreement drafting, introduction to other industry resources and marketing and social media expertise.  Joth Ricci was just promoted to COO and head of the two newer divisions.

INTEL. Joth and Bill offered some interesting insights into the business. “People are aware there’s going to be a tremendous growth in industry,” Bill said. “If craft can continue to grab 8 – 10 more points of total market share over the next 10 to 15 years, we’re talking about a lot of dollars at stake. So I think you’ll see a tremendous amount of investors continuing to circle and trying to engage in craft beer founders.”  What he doesn’t believe will happen are a ton of distributor consolidations. “Even if the suppliers want it, there is a shortage of new capital available to make these larger size transactions; and these families don’t want to get outta the business,” he said.

Joth agrees about this year’s potential for growth, especially in craft. But he offers some caveats informed from his time with distributor Columbia, which experienced a 30% share of craft beer in some of its Northwest markets. “This is a sell that’s about having it in the right accounts in the right place, and that’s a big challenge: it takes SKU and category management. [Distributors] also need to put some investment into training their people how to do it and manage the different priorities they have,” he said.