Shanken's Impact Newsletter July 15, 2020

IRISH WHISKEY CONTINUES TO BE A DRIVing force behind the growth of the U.S. spirits market. In 2019, Irish whiskies were up a collective 8.5% to 4.63 million cases in the U.S., according to Impact Databank, enjoying the fastest growth among all major spirits categories. Progress is widespread as consumers embrace mass market blends, small batch spirits, and single malts, as well as Ireland’s most unique spirit, single pot still whiskey. Pernod Ricard’s Irish Distillers unit is the undisputed heavyweight, with millions of cases separating category leader Jameson from its closest competitors. While Irish whiskey’s top-heavy nature reflects the history of distilling in Ireland—a few distilleries producing most of the brands on the market—Jameson’s competition isn’t resting. Brands like William Grant and Sons’ Tullamore Dew, Proximo’s Bushmills, and Eire Born…

BOURBON HAS CONTINUED ON ITS INCREDIBLE TEAR, WITH THE TOP 10 BRANDS GLOBally depleting 41 million cases last year on growth of 5.5%. That marked the second straight year of such gains, which came on the heels of many previous years of consistent upward momentum. Today, combined consumption of Bourbon and Tennessee whiskey (the latter is classified as Bourbon by Impact Databank) in the U.S. stands at 24.2 million cases—not far off from the high point in 1980, when it reached 27.79 million cases. With one exception, every top 10 Bourbon brand posted worldwide growth. Among the U.S. market’s leaders, however, a number saw declines, particularly those at lower price points. The predominant drivers continue to be the more upscale labels. Indeed, since 2000, super-premium Bourbons have skyrocketed in the…

WHILE MARKET CONDITIONS HAVE BEEN IN A STATE of flux lately due to the global pandemic, some of the key trends driving the drinks business in recent years have stayed true to form. Among them, the sterling growth of both American and Irish whiskies has continued unabated. According to Impact Databank, Irish whiskey remained the single fastest-growing segment of the U.S. spirits market in 2019, with an 8.5% increase to 4.63 million 9-liter case depletions. Even amid the pandemic, Irish whiskey is on pace for its 24th consecutive annual volume gain this year. Bourbon and Tennessee whiskies also continue to shine. Since 2010, the U.S. category has expanded by nearly 9 million cases, or more than 56%. Last year, Bourbon and Tennessee whiskies collectively grew by 5% to surpass 24…

ANTHONY “TONY” TERLATO, WHO DEvoted his life to bringing great wines to American consumers as a retailer, distributor, importer and winery owner, died June 29. He was 86. “My brother John and I learned everything we know from our father. He taught us so much,” said Bill Terlato, CEO and president of Terlato Wine Group, the company his father established. “We were fortunate to have him for 86 years. We only wish it could have been more.” As founder and chairman of the Chicago-based Terlato Wine Group, an importer that markets top producers including Gaja, M. Chapoutier, Piper-Heidsieck, and Nino Franco, Tony introduced Americans to high-quality wine for decades, particularly Italian wines. He almost single-handedly put Pinot Grigio on the map in the United States. In the 1990s, Terlato’s company…

AFTER SUPPLY CONSTRAINTS SLOWED growth in the United States for a few years, Cognac’s momentum has accelerated again. Last year import shipments rose 16.6% to 7.9 million 9-liter cases, more than twice their volume of just six years prior. Value growth to the U.S. was even more pronounced, surging 25.4% to over €1.5 billion ($1.7b), according to the Bureau National Interprofessionnel du Cognac (BNIC). Led by Hennessy, which dominates the global market with a nearly 50% share, Cognac hit another all-time high in volume terms last year at more than 200 million bottles. The U.S. is by far the world’s largest market for Cognac, accounting for half of the world’s bottled exports. Hennessy is also the runaway leader in the U.S. and together with second-ranked Rémy Martin, comprises three-quarters of…

TIM FORD OFFICIALLY BECAME CEO OF TREASURY WINE ESTATES ON JULY 1, taking over for Michael Clarke. Treasury’s new leader takes the helm at a time of unprecedented tumult in the market owing to the Covid-19 pandemic, global trade tensions, and other macro factors that will present challenges early in his tenure. Treasury has warned that EBITS for its fiscal year completed in June were down approximately 21% to A$535 million ($374m), including regional declines of approximately 14% in Asia, 37% in the Americas, 16% in Australia/New Zealand and 18% in Europe, Middle East, and Africa. Covid-19 has had “a significant impact on TWE’s trading performance across all geographies,” the company said, adding that it cannot provide earnings guidance for the current fiscal year due to continuing uncertainty in the…