Innholdsfortegnelse for October 1, 2020 i Shanken's Impact Newsletter

THE SINGLE MALT SCOTCH CATEGORY continues to thrive in the U.S. with con-sumers increasingly reaching for malts from across Scotland. Overall, single malts were up 7% in the U.S. last year to over 1.8 mil-lion cases, according to Impact Databank. The category tacked on 120,000 cases last year, its largest single-year gain since 2014. While interest in single malts continues to grow, the October 2019 imposition of a 25% tariff on the category in the U.S. now threatens to blunt its momentum. “For single malt Scotch, I see rare releases and limited edition releases with unique finishes and cask types continuing to play a role in creating excitement around the category,” said Michael Giardina, director for the Glenfiddich at William Grant & Sons. He points to Glenfiddich expressions like Winter…

AFTER THREE STRAIGHT YEARS OF accelerating gains, the spirits industry’s momentum has decelerated slightly this year, down to 2.1% growth, according to Impact Databank, to a total of 241.5 million 9-liter cases estimated by year-end. The market will register its 25th consecutive annual volume advance in 2020, as stocking up due to the Covid-19 pandemic is projected to bolster the off-premise sector. Still, those off-premise gains won’t be enough to offset the on-premise losses during the crisis, and retail dollar value for the total industry is expected to decline slightly this year. Looking ahead, the recession and lingering negative impact of the pandemic, as well as fierce competition from other drinks sectors—mainly hard seltzer—will cause the overall spirits market to keep slowing. The spirits industry recorded a solid 2.7% annual…

PERNOD RICARD’S SALES DECLINED 9.5% to €8.4 billion ($10b) in its fiscal year through June, including a 25% drop in the second half owing to the market disruptions brought on by Covid-19. Profit from recurring operations was down 13.7% to €2.3 billion ($2.7b) for the full year, after falling 46% in the second half. In the U.S., which accounts for 20% of sales, revenues were down 4% for the year, although the company says sell-out trends remained positive, rising 2%. While closures in the on-premise affected Jameson, which was up just 2% in control states for the fiscal year, a number of brands accelerated amid the shift to the off-premise, with Glenlivet up 6%, Malibu increasing 13%, and Kahlua advancing 6%. Other key brands on the rise in NABCA channels…

LEADING NEW JERSEY WHOLESALERS Allied Beverage and Fedway Associates will each pay $4 million in fines related to a Division of Alcoholic Beverage Control (ABC) investigation into re-bate programs in the state. In addition, 20 retailers statewide will pay a total of $2.3 million for their part in the programs. A two-year investigation found that Allied and Fedway “unfairly favored 20 of the state’s largest wine and spirits retailers and put smaller retailers at a competitive disadvantage by manipulating the retailer incentive program (RIP), granting credit extensions and interest-free loans, and engaging in other discriminatory practices,” the ABC said. The agency added that the wholesalers gave “chosen retailers a financial advantage by issuing rebates more often and in greater amounts than allowed. Among the retailers paying fines are Vingo, Gary’s,…

MORE THAN SIX MONTHS AFTER THE U.S. WAS FIRST rocked by the spread of Covid-19 and the subsequent closure of thousands of bars and restaurants, beer wholesalers still confront a host of uncertainties as to when, how and if their businesses will return to pre-pandemic normalcy. This insecurity comes despite a runup in off-premise beer sales and continued consumer movement toward trading up, as witnessed by the surging hard seltzer category. Indeed, the shift from on-premise to off-premise shopping and heightened demand for seltzers and other canned products has resulted in severe out-of-stocks for beer wholesalers and their retail customers around the country. The product shortages are just another challenge in a year that has provided many. Year-to-date beer sales are largely mixed, according to several beer wholesalers. Some report…

RAY HERRMANN TURNED 100 YEARS OLD ON September 11. Herrmann played a key role in the formation of the U.S. distribution landscape as it stands today, led by giants like Southern Glazer’s, RNDC, and Breakthru Beverage—a $5.5 billion behemoth of which he remains chairman emeritus. “This is an incredible day in Ray’s life. What a mile-stone for this gentleman,” said Marvin R. Shanken, chairman of M. Shanken Communications, Inc. “We are all blessed to know him and honor his many decades of leadership in the American wine and spirits industry.” Herrmann began his career as a sales-man in New York’s distribution tier after serving in the U.S. Army and seeing action in the Pacific theater during World War II. He eventually held leadership roles at McKesson, Schieffelin and Co. and…

BEAM SUNTORY IS BOLSTERING ITS POSITION IN ONE OF THE FASTEST-GROWING areas of the drinks market, agreeing to acquire premium RTD cocktail brand On The Rocks for an undisclosed sum. Founded in 2015 by hospitality veterans Patrick Halbert and Rocco Milano, On The Rocks (OTR) is distributed mainly in the U.S. and Canada and saw sales double in the first six months of this year amid the rapid rise of the premixed cocktail segment, Beam Suntory said. The drinks giant had an existing minority interest in the company, whose offerings include cocktails featuring Beam Suntory brands such as Knob Creek Old Fashioned, Hornitos Margarita, Effen Cosmopolitan, and Cruzan Mai Tai. On The Rocks retails at $11 a 375-ml. and also comes in 100-ml. and 200-ml. sizes. Trailing 12-month volume was…

WHERE THERE’S FIRE, THERE’S SMOKE. MORE THAN 100 wildfires burned across 12 Western states in recent weeks, creating unhealthy air quality in many regions and causing new complications during the crucial harvest period in the country’s most prestigious wine appellations. With the sky—and vineyards—blanketed with smoke in many places, winemakers are anxious about the possibility of smoke-tainted wines. In Oregon, towns were evacuated in Rogue Valley and smoke hung over Willamette Valley. To the south, it has been more than a month since lightning strikes ignited massive wildfires in California that threatened wineries and vineyards in Napa, Sonoma, Monterey and Santa Cruz counties. By Labor Day weekend, vintners were busy harvesting their grapes and tasting rooms reopened. As the name implies, smoke taint can impart smoky flavors and aromas to…

CHRISTOPHER LYNCH HAS BEEN named president of Napa Valley’s Opus One winery, succeeding David Pearson, who has held the role since 2004. Lynch’s three decades in the wine industry have included time with E.&J. Gallo, LVMH’s Chandon Estates, Per-nod Ricard, Beam Wine Estates and Terlato Wine Group. Founded by Baron Philippe de Rothschild and Robert Mondavi in 1979, Opus One is known known for its luxury estate-grown Bordeaux-style blend and has distribution in 90 countries worldwide. Today the company is a joint venture between Baron Philippe de Rothschild S.A. and Constellation Brands. •Pernod Ricard North America has named John Barrett as chief commercial officer. Barrett replaces Julien Hemard, who transitioned to become the group sales chief transformation of-ficer, based in Paris, earlier this summer. Barrett joins Pernod from Kites Advisors…

IT WAS UNWELCOME NEWS FOR ONE OF THE MOST vibrant spirits categories in the U.S. last fall when the government imposed 25% tariffs on single malt Scotch whiskies, among a number of other imported wines and spirits. The trade tensions failed to weigh down single malts in the U.S. through the end of the year, as they kept up their strong momentum to increase 7% to 1.8 million cases, comprising almost one-quarter of the entire Scotch whisky market, a share far beyond that seen in most other countries. This year, the tariffs are undoubtedly affecting the category, especially at the more price sensitive lower end. But key players tell Impact their brands have been largely resilient in the face of the challenge, with consumers often migrating to the middle ranges…

TORRES, ONE OF SPAIN’S ICONIC wine families, has announced a new route to market in the U.S. Wilson Daniels has been appointed as the U.S. importer for the fifth-generation family-owned winery’s Familia Torres range, which includes premium and super-premium wines from Penedès, Priorat, Ribera del Duero, Rueda, and Rias Baixas. “This provides us an entry into Spain in grand style, working with a family that has a legacy of 150 years and nearly 2,200 hectares (5,400 acres) un-der vine,” Wilson Daniels president Rocco Lombardo tells Impact. “When people think of fine wine from Spain, they think of the Torres family.” The Familia Torres portfolio retails from about $15 a 750-ml. at the lower end to above $100 at its higher tiers. Currently at around 25,000 cases in the U.S., Lombardo…

CONSTELLATION BRANDS HAS ACQUIRED Louisville, Kentucky’s Copper & Kings American Brandy Company for an undisclosed sum. The move expands Constellation’s stable of high-end spirits and strengthens the company’s position in the American brandy market. Distillery founder and CEO Joe Heron expressed confidence that the deal is the right move for the company. Constellation previously held a minority stake in Copper & Kings, whose offerings span a wide range of spirits and cocktail ingredients, including apple brandy, liqueurs, absinthe, gin, and bitters.…

•VERMONT-BASED WHISTLEPIG RYE has introduced the latest iteration of its limited edition The Boss Hog whiskey. Featuring a base of straight rye whiskey that’s aged for 17 years in American oak, then finished in rare Spanish oak, and finished for a second time in South American teak-wood casks, The Boss Hog VII: Magellan’s Atlantic is bottled at 52.6% abv-53.9% abv and retail priced at $500 a 750-ml. Like the six editions of The Boss Hog that came before it, Magellan’s Atlantic will be available at high-end retail shops and on-premise accounts across the U.S. •TEQUILA PARTIDA HAS DEBUTED Roble Fino, a line of luxury sipping Tequilas. The new range includes a Reposado ($100 a 750-ml.), aged for a minimum of 6 months in ex-Bour-bon barrels and then aged for two…