Welcome to Issue #2 of The Quench Report, the newsletter that delivers the latest and greatest in Beverage Alcohol on the rocks and straight to your inbox.

What’s on tap for today:

• 🍺 The incredible P&L leverage for big beer - are we spoiled?

• 🌎️ The continued high growth for Alani continues

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🍺 BIG BEER - CREATING LEVERAGE IN THE FACE OF VOLUME DECLINES

ABI released its Q2 results on July 31st. While much has been said about their performance, we wanted to highlight the P&L leverage they are achieving, driving +3% net sales and +4% gross profit in the face of volume declines.

We scoured the markets for a similar public company that:

1. Reported in the last week

2. Took an identical -2% volume hit
   ...and landed on none other than: Goodyear. Yup — from tires to treadmills of financials.

Take a look 👇

• This isn't about roasting Goodyear (we promise, no burnouts). It's just a reminder of how rare beer’s kind of margin magic is. For most companies, a -2% volume drop means:

  • Less overhead absorption

  • Crumbling economies of scale

  • Input cost growth is rising much quicker than net sales growth

  • And very few ways to finesse SG&A or pull any balance sheet levers into any semblance of EPS growth
    

• Meanwhile, beer? With strong brand affinity, this category somehow turns a tough volume quarter into HSD/DD EPS growth.
  We’re not saying we’re spoiled… but we are sipping champagne while the tires screech outside.

🆕 ALANI’S INCREDIBLE GROWTH CONTINUES

Celsius Holdings reported its Q2 results last Thursday. In it, they detailed the incredible growth of their recently acquired Alani, which "outperformed the acquisition model” while mentioning that Alani is still in their independent network, which was previously reported to be beer-heavy.

Here’s the kicker: In markets where Alani flows through beer distributors, it may be their single most significant growth driver — bigger than the entire spirits RTD category!

If the beer network losses Alani what brands will step up and drive volume growth in their respective networks? For a lot of brands, this is a huge opportunity…

TELL US HOW WE DID WITH TODAY’S EDITION

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