Innholdsfortegnelse for August 1-15, 2017 i Shanken's Impact Newsletter

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…

HEAVEN HILL HAS BOLSTERED ITS LIqueurs stable, buying the Carolans and Irish Mist labels from Campari for $165 million. Carolans and Irish Mist had combined sales of $34 million last year, accounting for 2% of Gruppo Campari’s total sales. The U.S. is the liqueur brands’ major market, comprising about 70% of their annual revenue. Carolans was roughly flat at 364,000 cases in the U.S. last year, according to Impact Databank, while Irish Mist has a smaller presence. Globally, Carolans is the second-largest-selling Irish cream liqueur after Baileys. Heaven Hill’s liqueurs stable also includes Hpnotiq, Pama and Domaine de Canton ginger liqueur. Campari will continue to handle Carolans and Irish Mist outside the U.S. market. Campari acquired Carolans and Irish Mist (along with Frangelico) from William Grant & Sons for $144…

•NEW YORK’S BROOKLYN BREWERY, California’s 21st Amendment Brewery and Colorado’s Funkwerks have partnered to create a nationwide sales and distribution platform. The project will officially launch on January 1, 2018, with 70 shared sales representatives and 90 brand ambassadors spread across 38 states. The partnership means that Brooklyn’s beers will reach Northern California, 21st Amendment’s beers will enter the southeast U.S. and Funkwerks will be distributed in New York, among other new market entries. As part of the venture, Brooklyn has purchased minority stakes in both 21st Amendment and Funkwerks. •GRUPO CODORNIU HAS INTROduced three single-estate Cava labels under its Ars Collecta range, following the creation of Spain’s new Cava de Paraje Calificado designation. The trio includes Finca La Pleta, Finca El Tros Nou and Finca La Fideuera, which are…

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…

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…

MASSACHUSETTS JUDGE ROBERT B. GORDON HAS SIDED WITH TOTAL WINE & More in the retailer’s suit over spirits pricing against the state Alcoholic Beverages Control Commission. Gordon ruled that alcohol retailers like Total Wine may pass on bulk discounts to consumers. In January, Total Wine’s Massachusetts licenses were suspended by the ABCC for allegedly selling liquor below cost. The retailer claimed that the ABCC was ignoring bulk discounts the company was set to receive from wholesalers once the retailer ordered sufficient quantities of liquors, effectively misinterpreting the true cost of the goods. Gordon wrote, “there was clearly no predatory pricing carried out in this case” and these types of discounts are what “the law should promote rather than punish.” In a statement, Total called the decision “a victory for consumers.”…

Foley Family Wines, whose volume is now at approximately 1.3 million cases, continues to carve out a significant presence in the California wine market. The company’s portfolio now includes such labels as Chalk Hill, Chalone, Kuleto, Sebastiani, Foley Johnson and Two Sisters, among others. Impact assistant editor Shane English recently spoke with founder Bill Foley about the outlook for the rest of the year, as well as new initiatives within the portfolio. IMPACT: What are the main opportunities and challenges for Foley Family Wines looking into the latter part of 2017? Foley: This year has been a pleasant surprise. Last year our sales to wholesalers were up by only about 2%. This year we’re tracking them up about 15%. Our direct-to-consumer sales are currently up about 23%. Over the last…

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…

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…

LOUISVILLE’S COPPER & KINGS AMERican Brandy Co. has entered five new states. The craft distiller has partnered with Southern Glazer’s to make its foray into Oregon and Washington and has inked a deal with Major Brands to launch in Missouri. Additionally, Copper & Kings is entering Kansas and Colorado via Standard Beverage of Kansas and Local Merchants of Colorado, respectively. The brand’s lineup of American brandies and absinthe ($30-$60 a 750-ml.) will be available across all five markets, bringing Copper & Kings’ total U.S. footprint to 31 states and Washington D.C.…

BACARDI LTD HAS NAMED Francis Debeuckelaere as its regional president for Europe, effective immediately. A 23-year company veteran, Debeuckelaere has led a number of European markets for Bacardi, including Belgium and the Netherlands, and was most recently the company’s vice president and managing director for Northern Europe. In his new role Debeuckelaere succeeds Mahesh Madhavan, who has been appointed CEO of Bacardi Ltd, effective in March 2018. Madhavan is spending the next several months working within different regions and markets across Bacardi’s global business as he prepares to assume the CEO role next year. •Washington-based Ste. Michelle Wine Estates has promoted Dan Heller to the role of executive vice president, sales, effective September 1. He succeeds Frank Genovese, who is retiring after nearly 18 years with the company. Since joining…