Shanken's Impact Newsletter September 1-15, 2017

IMPACT’S “HOT PROSPECTS” ARE AN eclectic mix of vibrant wine and spirits brands, but one common thread among the 90 winners is that they show huge promise in a crowded and competitive market. A number of these brands are new to the field, making a splash in a short period of time, while others have been on the market for years but have recently gained significant traction. All 90 brands have met the stringent cri-teria necessary for Hot Prospect recognition. For spirits, honorees must have had deple-tions of 50,000-200,000 cases in 2016, either as new products or existing brands that achieved at least 15% growth over the previous year while also enjoying growth in 2014 and 2015. For both domestic and im-ported wine, Hot Prospect brands must have had depletions…

THE TOP 10 SPIRITS COMPANIES WORLDWIDE EXPERIENCED MIXED RESULTS AMONG their leading brands last year under pressure from a sluggish global economy and stiff com-petition. Still, with new growth avenues emerging, the top 10 collectively accelerated their volume growth to 1.3% in 2016 from 1% in 2015, according to Impact Databank. Strong growth from Bourbon, Irish and Indian whisk(e)y brands has seen the top 10 steadily increase their market share of the total spirits category. With a combined volume of 621 million cases last year, the top companies’ collective market share is now 50.5%. Flavored whiskies—particularly Canadian and Bourbon entries—are also making solid con-tributions to overall growth, and the big players continue to make significant investments and debut new launches in the North American whiskey segment overall. Most importantly, average…

GIVEN THE UBIQUITY OF THE NOTION THAT CRAFT spirits are aggressively eating into the share of the spirits industry’s blockbuster brands, it may come as a surprise that the world’s top 10 spirits companies have continually upped their share of the global market over the past three years, and now control more than half of total volume worldwide. But a closer look reveals that the drinks business’s major players are not only fending off challenges from craft spirits producers, but in-creasingly joining them at their own game. Indeed, leading market-ers like Diageo, Pernod Ricard, Beam Suntory, Bacardi, Brown- Forman and others are adapting to the craft boom with both organic innovation and acquisition activity. In the past year alone, Pernod has snapped up Smooth Ambler whiskey and Del Maguey mezcal,…

NAPA VALLEY–BASED MERLOT SPE- cialist Duckhorn Wine Company has purchased Calera, one of the Central Coast’s best-known Pinot Noir pro-ducers, from founder Josh Jensen. The deal includes the winery, its tasting room and 85 acres of estate vineyards planted in the Mount Harlan appella-tion. The sale price was not disclosed. As part of the deal Jensen will join Duckhorn’s board of directors and will consult for Calera for the next four years. The winery’s current staff, in-cluding winemaker Mike Waller, will remain onboard. Duckhorn’s principals say they weren’t looking to buy a winery. But president and CEO Alex Ryan says the opportunity to acquire Calera was too good to pass up, noting that the iconic winery will give the company a strong presence in the Central Coast. Known for its…

MIDWAY THROUGH THE YEAR, IM- pact’s 2016 spirits “Hot Brands” appear to be maintaining their strong momen-tum, with nearly all of them showing solid progress in control states through the first six months of 2017. While the control state spirits market was up 3% in the first half, the Hot Brand roster combined for a 14% jump, with 16 of last year’s 27 award winners rising at double-digit rates. Control states ac-count for about 25% of total U.S. spir-its volume. Growth continues to be strong for Hot Brand whiskies Crown Royal, Jim Beam and Jameson. Including flavored offerings, Crown Royal leapt 12% by volume in control states over the first half of the year, while Jim Beam was up 15% and Jameson rose by 16%. Bulleit (+15%), Woodford Reserve (+17%)…

DIAGEO HAS COMPLETED ITS ACQUISITION OF SUPER-PREMIUM TEQUILA BRAND Casamigos. The deal, which was announced on June 21, includes an initial pay-ment of $700 million, and a further $300 million in performance-based payouts over the next decade. Casamigos founders Rande Gerber, George Clooney and Mike Meldman, as well as Casamigos Spirits CEO Lee Einsidler, are remaining onboard, with the brand set to operate as a separate unit. Launched in 2013, Casamigos offers Blanco, Reposado and Añejo expressions ($45-$55 a 750-ml.) and has posted average annual compound growth of 54% over the past two years. For 2017, it’s on track to hit 175,000-200,000 cases, with Diageo setting a five-year goal of growing Casamigos to 1 million cases.…