Shanken’s Impact Newsletter, the leading source for exclusive data on the alcoholic beverage industry in the United States and internationally. Every issue features up-to-the-minute data and analysis on trends in the worldwide drinks market.
AMID NEW EVIDENCE THAT WINE IS STEALing share from beer within the coveted millennial demographic (story page 4), premium- and-above wine brands continue to thrive in the U.S. market, accounting for an outsized share of overall category growth. The premium-plus wine sector, including wines carrying an average price tag of at least $10 a 750-ml. bottle, advanced 4.9% to 72 million nine-liter cases last year. That growth builds on the 5.7% advance that the segment enjoyed the year prior. Brett Scallan, senior vice president of marketing at Ste. Michelle Wine Estates, confirms that much of the dynamism is driven by younger consumers. “We’re finding that the millennials are buying at higher prices,” Scallan says. “I think what they’re willing to pay for wine for the right experience seems to be…
FOLLOWING A TUMULTUOUS PERIOD IN WHICH A GOVERNMENT AUSTERITY CAMPAIGN stunted progress in China’s beverage alcohol market, imported wine and international spirits are back on the upswing, aided by the country’s steadily growing economy. Beginning in 2013, president Xi Jinping targeted government expenditures on “expensive alcohol,” effectively closing off one of the most lucrative sales channels in the market for drinks companies. While the austerity campaign was undoubtedly a rude awakening—one whose reverberations are still being felt—it happily coincided with a more welcome development: the emergence of a consumer-led Chinese market for premium wine and spirits. As millions of China’s consumers ascend to middle-class status each year, international beverage alcohol brands are increasingly in demand, with newer channels like e-commerce and the modern on-trade contributing to the momentum. From a…
WHILE WINE AND SPIRITS MARKETERS FACE NO shortage of significant challenges amid a changing beverage alcohol landscape, the long-term consumer trend toward premiumization continues to give ample cause for optimism. As our exclusive analysis of the premium-and-above wine market shows, the premium-plus share of the U.S. wine category has expanded markedly over the past decade, and now accounts for 25% of total depletions and 44% of retail sales. With the premium-plus segment continuing to grow well ahead of the overall market—rising 5% by volume last year compared with a market-wide advance of about 1%—uptrading continues to be a significant driver of value growth for large and small players alike. A look at the prevailing consumer trends offers insight into why premiumization continues to take hold. A recent report by Goldman…
A NEW REPORT FROM GOLDMAN SACHS FORECASTING A weak outlook for the U.S. beer market is making waves across the drinks industry. Released in recent weeks, the report cites changing millennial tastes—which are shifting away from beer in favor of wine and spirits—as a key factor behind beer’s slowdown, which has been ongoing but seems to be accelerating this year. Goldman has downgraded its expectations for the beer market over the next two years, anticipating volume declines of 0.7% and 0.3% for 2017 and 2018, respectively. The softness is largely being driven by beer’s “core domestic” segment, which includes mainstream brand franchises such as Budweiser, Miller Lite and Coors Light and is on track to decline by 3% through 2018. As a result, Goldman lowered its beer volume forecasts for…
DEUTSCH FAMILY WINE & SPIRITS HAS ACQUIRED THE UPSCALE BIB & TUCKER BOURBON AND MASTERSON’S RYE WHISkey brands from 3 Badge Beverage Corp., owned by the Sebastiani family. The deal extends Deutsch’s presence in the fastgrowing North American whiskey category, where it already owns the Redemption whiskey label. The price was undisclosed. Deutsch Family CEO Peter Deutsch said the company intends “to create a diverse range of whiskey brands with different mash bills, places of origin and price points.” Masterson’s is the first Canadian label to join the Deutsch Family portfolio. The 10-year-old core rye retails at $70. Masterson’s was extended this spring with a trio of limited-production barrel-aged ryes. All three garnered scores of 90 points or above from Whisky Advocate. Bib & Tucker, a small-batch, six-year-old Bourbon sourced…
STRONG GROWTH IN WHISK(E)Y AND Tequila boosted Diageo’s U.S. business in the company’s full fiscal year ended in June. The drinks giant’s core U.S. spirits unit was up 3% on an organic basis for the year, driven by impressive net sales gains for the Crown Royal (+13%), Bulleit (+23%) and Don Julio (+20%) brands. Overall, Diageo’s North America net sales totaled £4.2 billion ($5.5b) for the year, with operating profit up 22% to £1.9 billion ($2.5b). Crown Royal’s U.S. increase was fueled by the launch of its new Vanilla flavor, as well as ongoing growth for Crown Royal Deluxe and Regal Apple. Scotch whiskies Johnnie Walker (+8%) and Buchanan’s (+7%) likewise delivered solid results during the period, led by Johnnie Walker Black and higherend marques. The group’s single malt portfolio…
