Innholdsfortegnelse for May 15, 2020 i Shanken's Impact Newsletter

HEAVEN HILL BRANDS IS CONSOLIdating its U.S. business with Southern Glazer’s across 39 markets. While the two companies already had an extensive partnership, nearly a dozen new markets are now being added in the western part of the country. Heaven Hill’s legacy brands—including Evan Williams, Elijah Craig, Burnett’s, and Admiral Nelson’s—are transitioning to Southern Glazer’s in 11 markets under the new accord. Effective June 1, the Southern Glazer’s Western Region—which includes the states of Alaska, Hawaii, Washington, Oregon, California, Nevada, Arizona, New Mexico, Utah, Idaho, Montana, and Wyoming—will handle those brands on an exclusive basis. RNDC-Young’s currently represents Heaven Hill across the West. Additionally, the new alignment will see Black Velvet Canadian whisky, which Heaven Hill recently acquired from Constellation Brands for $266 million, join Southern Glazer’s in 25 new…

RÉMY COINTREAU SAW SALES FALL 11% ON AN ORGANIC BASIS TO €1 BILLION ($1.1b) in its fiscal year ended in March, as the Covid-19 crisis led to a 24% revenue decline in the fourth quarter. Rémy says the situation is likely to lead to a 50%-55% sales drop in the first quarter of its new fiscal year, but added that it’s anticipating a gradual recovery in its second quarter ending in August, and reopened its Cognac production facility in mid-April. The company’s core Rémy Martin brand slipped 7.5% for the year to €736 million ($799m), as the pandemic cut into previously strong growth in Asia, and U.S. retailers destocked. Rémy’s Liqueurs & Spirits division was down 3% to €262 million ($285m), with the fourth-quarter downturn in Asia offsetting a strong performance…

INTERNATIONAL BEVERAGE HOLDings, whose portfolio includes the renowned single malt Scotch brands Old Pulteney, Balblair, Speyburn, and anCnoc, has named San Francisco based Hotaling & Co. as its exclusive U.S. importer and marketer, effective June 1. International Beverage’s current U.S. importer is 375 Park Avenue Spirits, which has handled its portfolio since 2015. Other International Beverage brands include blended Scotch Hankey Bannister, Scottish gin Caorunn, Phraya rum, and Thai spirit brand Mekhong. Hotaling said it initially will focus on International Beverage flagship Old Pulteney, whose core range features the 12-, 15-, and 18-year-old expressions as well as its non-age statement label Huddart, which launched in the U.S. last year. Hotaling will also focus on Balblair, one of the oldest distillers in the Highlands. In addition to striking the import deal,…

INDUSTRY VETERAN DAN BUTTLING is assuming the helm as president and CEO of Stoli Group, with responsibility for the North American market. Buttling joined Stoli Group as CMO last October. Prior to joining Stoli, Buttling spent 31 years at Diageo, where he was most recently CMO for the beer unit, overseeing brands like Guinness, Harp, Smithwick’s, and Smirnoff Ice. Before that he held a variety of marketing and sales roles at the drinks giant, including leading brand marketing for labels like Ketel One, Cîroc, Bulleit, and Johnnie Walker. In his new role, he succeeds Rudy Costello, who led the business for approximately two years. “I’m looking forward to driving growth on Stoli and an emerging group of brands, including Villa One Tequila, Elit vodka, and Kentucky Owl Bourbon and Rye,” Buttling…

PERNOD RICARD POSTED SALES down 2.1% on an organic basis to €7.2 billion ($7.8b) in the nine months through March, representing the first three quarters of its fiscal year, weighed down by a 14.5% decline in the third quarter owing to the unprecedented conditions brought on by Covid-19. Pernod’s U.S. business managed a 3% sales increase in the first nine months of the fiscal year, but saw slowing growth in March due to physical distancing and other containment measures, including the on-premise shutdown. Jameson, which was up 6.5% to 3.7 million cases in the U.S. last year, according to Impact Databank, was affected by the cancellation of St. Patrick’s Day events, but continued to perform well off-premise, the company said. Jameson grew by 22% in IRI channels in the 12 weeks…

CHAMPAGNE EXPORT VOLUME TO THE United States surpassed the 2-million case mark last year for the first time ever, after a 10% gain to 2.2 million 9-liter case shipments, according to recently released statistics from French government agency Business France. Champagne export value to the U.S. rose an even more impressive 20% to €636.1 million ($688m) in 2019. The United Kingdom remained the largest export for Champagne last year in volume terms, but the U.S. is number one by value. Moët Hennessy-owned Veuve Clicquot, the American market’s largest-selling Champagne brand, rose 1.6% last year to 527,000 cases, according to Impact Databank, while second ranked Moët & Chandon fell 1.3% to 406,000 cases. Stellar performances were recorded by other leading brands like Piper-Heidsieck (+20.5%) and Dom Perignon (+8.5%). Champagne continues to do…

IMPACT: What led to the write-off just announced in Ste. Michelle’s recent first quarter results? Mortensen: Some years ago, there were ambitious plans and prospects on volumes. If you’re projecting a certain sales level, you look at vineyard capacity. We grow only about 10% of our grapes, so 90% of our supply comes from our growers. We asked them to add vineyard acreage, and they did. Our projections didn’t materialize, and so inventory levels built up over a number of years. It got to the point where we needed to take care of that—we saw that we weren’t going to sell our way out of the problem. We conducted a disciplined analysis, and then took the brave decision to write it off. And it’s a large write-off. IMPACT: You also…

• MGP INGREDIENTS SAW SALES IN crease 11% to $99 million in its fiscal first quarter ended in March, with its premium beverage alcohol sales up 9.4% to $45.6 million. Brown spirits in particular were strong, advancing 17% to $29 million and offsetting a small decline in white spirits. “The improved performance of our distillery products segment was led by double-digit growth in sales of both new distillate and aged whiskey,” said CEO Gus Griffin. “Despite some significant changing dynamics at the retail level and potential challenges to specific customers, we believe the underlying macro consumer trend supporting the growth of the American whiskey category remains strong.” • SPEYSIDE SCOTCH WHISKY MAKER The GlenAllachie Distillers Co. has appointed ImpEx Beverages as its exclusive U.S. importer. The GlenAllachie range of single…

IN THE FACE OF UNPRECEDENTED CONDITIONS AND the greatest challenge many of us have faced in our lifetimes, the drinks industry continues to show remarkable resolve and resilience. While the Covid-19 crisis is taking a toll on the business, especially in the on-premise, which remained largely shuttered at press time, agile marketers are responding at all levels of the industry, adapting their operations to meet the new reality while keeping an eye on the future and preparing for better times ahead. Given the conditions, one might think a mixology-focused category like gin would be seeing particularly tough times. But gin has consistently been among the spirits enjoying the biggest off-premise gains in recent weeks, with consumers clearly taking to making cocktails at home, encouraged by the outreach efforts of their…

GRUPO CUERVO SAW ROBUST SALES GROWTH IN THE FIRST QUARTER DESPITE the Covid-19 crisis, with its North American sales soaring 15% to MX$3.5 billion ($146m) on a volume increase of 6.4% to 2.1 million cases. Globally, the company’s sales rose 5.3% to MX$5.2 billion ($217m) during the first three months of the year, despite a volume decline of 9% to 3.4 million cases. Consolidated net income slipped 0.8% to MX$698 million ($29m) as high agave prices continued to weigh down earnings. The company’s core Jose Cuervo brand saw global volume increase 5.8% to 1.2 million cases in the first quarter, with net sales up 18.2% to MX$1.9 billion ($79m). While Cuervo saw rapid growth in the U.S. and its international business, it was partially offset by a slowdown in Mexico,…

THE OFF-PREMISE SURGE PICKED UP SPEED IN THE FOUR WEEKS THROUGH April 19, according to IRI, with spirits dollar sales jumping nearly 40% compared with the year-earlier period on a volume increase of 35%. Within that performance, whiskies were up 39% by value and 33% by volume, vodka rose 28% by value and 25% by volume, and Tequila jumped 58% and 48% by value and volume, respectively. On the wine side, table wine showed 24% value growth on a 23% volume increase for the four-week period, while sparkling wines were up 32% in both measures. Meanwhile, e-commerce continues to boom. “We’ve acquired more new consumers in the past six weeks than in the past 16 months in total,” said Drizly CEO Cory Rellas, speaking on a webinar hosted by WSWA in…