Shanken's Impact Newsletter August 1-15, 2020

WHILE THE U.S. WINE MARKET CONTINUES to adapt to the changes brought about by an unprecedented global pandemic, wines priced $10 and above have shown remarkable resilience to recent market conditions. Both domestic and imported premium-plus wines—categorized as wines with an average retail price of $10 or above for a 750-ml. bottle—gained ground in volume terms in 2019, with domestic offerings growing by 1.7% to just over 58 million 9-liter cases and their imported counterparts adding a million case depletions to reach 23.2 million cases, according to Impact Databank. Collectively, the $10-and-above wine category expanded by 2.5% to 81.3 million cases last year. While imports comprised less than a third of the premium-plus volume in the U.S. last year, they continued to gain significant ground. In the past five years,…

THE ASTOUNDING GROWTH OF HARD SELTZERS IS CONTINUING—AND INDEED, HAS AC-celerated—in 2020 despite the havoc the coronavirus pandemic is wreaking on the U.S. drinks industry. The surging popularity of the ready-to-drink products over the course of just three years has prompted the entry of more major beverage alcohol marketers into the space this year while segment pioneers remain among its leaders and are fighting to retain share. Indeed, seltzer’s continued triple-digit rate of growth is already challenging seasoned industry leaders’ early projections of how large the segment can ultimately get. Hard seltzer volume surged 218% in 2019 to 89 million (2.25-gallon) cases, according to Impact Databank, from 28 million cases in 2018, surpassing a year-earlier growth rate of 167%. Incredibly, through the first half of 2020, category volume is up…

WHILE THE INDUSTRY IS FACING TOUGH CHALLENGES amid this period of great uncertainty, and the top players are busy adapting to a new landscape dominated by off-premise consumption, some pre-Covid trends are holding to form. Chief among these is the ongoing march of premiumization in both wine and spirits. Wines retailing at $20 and above are the single fastest-growing price segment, as consumers explore more upmarket bottles via the retail channel. Just behind the super-premium segment in growth terms is the large piece of the wine market retailing from $12-$20, where both domestics and imports have been enjoying steady gains, offsetting the ongoing decline of the value tier. According to Impact Databank, wines retailing at $10 and above are nearing a 50% share of the market in dollar terms, despite…

CONSTELLATION BRANDS HAS AC-quired a minority stake in California’s Booker Vineyard, the Paso Robles superstar winery founded by Eric Jensen. The agreement includes an option for Constellation to eventually own a majority of the company, and a plan to distribute Jensen’s Cabernet-focused My Favorite Neighbor brand. Jensen will remain as winemaker. No financials were disclosed. “The synergy between [Jensen’s] vision for his portfolio and what we’re trying to accomplish with the total business is what really made this partnership make sense on both sides,” explained Robert Hanson, president of Constellation’s wine and spirits division. The partnership adds two different brands to Constellation’s portfolio: Booker, a boutique winery with a strong direct-to-consumer sales model, and My Favorite Neighbor, a line of affordable, region-based wines that has potential to grow.…

CALIFORNIA-BASED C. MONDAVI & Family Wine Co. has acquired the French Blue brand from Flying Blue Imports for an undisclosed price. Located in Bordeaux, French Blue is primarily focused on rosé, though its lineup also includes Sauvignon Blanc. The brand, founded by entrepreneur Roger Scommegna and winemaker Stephanie Rivin, will continue to be made by Rivin in France. The acquisition marks C. Mondavi & Family’s first foray into imported wine. According to Impact Databank, C. Mondavi had volume of 1.7 million cases in the U.S last year.…

SINCE 1981, WINE SPECTATOR’S AN-nual Wine Experience has brought together leading vintners, hundreds of wineries and thousands of wine lovers for three days of tasting, education and enjoyment. This year’s event would have been the 40th Wine Experience, and tickets for the weekend were nearly sold out. But the coronavirus pandemic has disrupted plans around the world. So Wine Spectator has re-scheduled the 40th Wine Experience to Oct. 21–23, 2021. It will take place in its longtime home, the New York Marriott Marquis in Times Square. “We had a stellar lineup of top producers and great wines to celebrate our 40th Wine Experience,” said Marvin R. Shanken, editor and publisher of Wine Spectator. “It is with great regret that we have decided to postpone the event—for the first time in…