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

EACH YEAR, IMPACT RECOGNIZES THE drinks industry’s best long-term performers with its “Blue Chip” Brands. To earn honors, brands must show at least 10 consecutive years of volume growth, or average annual compound growth of at least 0.5% from 2009 through 2019 with positive growth in at least eight of those 10 years. In addition, the brands must have maintained gross margins of at least $25 million last year. A total of 27 spirits brands earned Blue Chip honors, including five new winners joining the returning awardees. Whiskies, once again, are the largest general category, with 12 winners spread across Bourbon, Irish, Canadian, Scotch, and flavored segments. The Blue Chip whiskies range from some of the biggest brands in the U.S.—Jack Daniel’s and Fireball, for example—to rising representatives from the…

WITH CONSUMPTION UP BY 52% THIS year amid the pandemic, Patrón is experiencing product shortages in as many as 10 states. Vice president of marketing Adrian Parker said social distancing measures have complicated the production process at Patrón’s Mexico distillery, slowing output, even as the distillery has expanded its 2,000-member workforce by an additional 200 this year. Parker said the Bacardi-owned brand will need to manage outages and supply issues for the next few months and into next year. According to Impact Databank, Patrón’s U.S. volume soared 14% to 2.2 million 9-liter cases last year, and the brand jumped 54% in control states in the year-todate through August. “If you look at our core aged Tequilas, they’re up anywhere from 25%-75% over last year, which is incredible,” Parker recently told…

WILLIAM GRANT & SONS IS BOLSTERING ITS POSITION IN TEQUILA AND OTHER agave spirits with the acquisition of a distillery in Mexico, aimed at supporting the growth of its Milagro label in the coming years. Based in Cienega in the Highlands region of Jalisco, the site has previously been known as Productos Regionales de Atotonilco, although William Grant & Sons will rename it moving forward. Financial details weren’t disclosed, but Grant noted that the purchase is part of a “multi-million pound investment plan to build its brands globally and upgrade its infrastructure to support its growth ambitions.” “Today, the distillery is able to produce approximately 30% of what we will require, so in the short-term we will continue to oversee Milagro production at our distilling partners’ sites to ensure continuity…

A TRANSATLANTIC ALLIANCE OF 18 trade organizations representing the U.S., E.U., and U.K. beverage sectors is urging their governments to deescalate the trade war that has resulted in lower shipments of wine and spirits from both sides of the Atlantic in recent months. The group sent a joint letter to the United States Trade Representative (USTR) and the European Commission for Trade in response to the WTO’s recent ruling that allows the E.U. to impose $4 billion in tariffs on U.S. imports as part of the ongoing transatlantic dispute over aircraft subsidies. They fear the WTO ruling could result in further tariff escalation in the short term. “An immediate restoration of duty-free access for all distilled spirits and low tariffs for wine is essential to returning our industries to supporting…

THE GLASS FIRE, WHICH ERUPTED SEPT. 27 IN THE HILLS ABOVE ST. HELENA, BURNED wineries and vineyards. It also halted harvest and may prove to be the knockout punch for the 2020 vintage in both Napa and Sonoma. The preceding LNU Complex fires in August had already impacted the vintage, as smoke lingered over the region for weeks when much of the year’s crop was going through veraison and thus acutely susceptible to smoke taint. The Glass fire only further jeopardized the vintage, and very few wines will be made this year as a result. “It is one of the saddest years ever,” winemaker Phillipe Melka told Wine Spectator. “Usually, harvest is a happy time. We have very, very little hope.” Melka consults for 25 clients throughout Napa and Sonoma.…

BROWN-FORMAN HAS KICKED OFF “Make It Count,” a new global advertising campaign for Jack Daniel’s, in what it says is a first for the whiskey brand. The company partnered with Energy BBDO to create TV, print, and out-of-home ads, plus social and digital activations in over 100 countries. The campaign tells the stories of everyday people who live with purpose. It kicks off with “First Timers,” a 60-second video shot in Kiev, Ukraine. Last year, Jack Daniel’s depleted 13.31 million cases, according to Impact Databank, making it the fourth-largest premium spirits brand worldwide.…

CONSTELLATION BRANDS POSTED A 4% decline in net sales for its second quarter ended in August. For its fiscal first half, the company’s sales were down 5% to $4.2 billion; however, operating profit remained positive, rising 8% to $1.4 billion. Constellation’s beer business has continued to grow despite market disruptions with depletions up 5% for the second quarter, as “strong performance in off-premise channels continues to more than offset the Covid-19 related impact of the nearly 50% reduction in the on-premise channel.” The Corona family of brands grew by double-digits, boosted by Corona Hard Seltzer and robust gains for Corona Premier and Corona Extra. On the wine and spirits side, net sales fell 9% organically to $625 million in the second quarter, but operating income increased 1% to $162 million.…

RICK TIGNER GREW UP IN MODESTO, CALIFORNIA, AND IN THE EARLY PART OF his career worked for Modesto-based E.&J. Gallo. In 1991, he joined Jess Jackson at Jackson Family Wines, rising quickly up the ranks to become president and CEO. Today, the family-owned company produces more than 6 million cases of wine annually from 40 different wineries on four continents. Wine Spectator executive editor Thomas Matthews recently spoke with Tigner on Instagram Live series Straight Talk with Wine Spectator. “What Jess Jackson taught me about was vision and leadership,” Tigner explained. “When I got there in 1991, they had just done 400,000 cases. The national sales meeting was 12 people around a dining room table. Jess’s vision was to grow by 50% that year. I thought he was crazy—but we…

CANADIAN WHISKY STANDS OUT AS A CATEGORY THAT HAS yet to fully benefit from the brown spirits boom, even as individual brands show marked progress. Worldwide, volume increased by 1.5% to 21.33 million 9-liter cases last year, with the domestic Canadian market stable at 3.49 million cases. However, more than half of total Canadian whisky consmption derives from the U.S., where the category, excluding flavors, fell 4.9% to 12.4 million cases in 2019. With flavored offerings from Crown Royal and others included, the picture becomes much brighter. Last year, flavored Canadian whisky grew 15% to 8.5 million cases in the U.S., making it nearly 70% as large as unflavored Canadian whisky. Over the last five years, the segment boasted a 14.4% annual growth rate. Arguably, Fireball was the pioneer that…

STOLI GROUP HAS NAMED DAMIAN McKinney as its global CEO. McKinney is the founder of global consultancy McKinney Rogers, which he began in 1999 and sold in 2017. McKinney was awarded Keeper of the Quaich for his role in transforming the Johnnie Walker brand and services to the Scotch Whisky industry. Walmart, Pfizer, and Thomson Reuters have been other notable clients over the years. McKinney credits his 18 years as an operations commando with the UK Royal Marines with providing valuable experience to apply to his business career. Hugues Pietrini was ousted as Stoli’s global CEO in April 2019, after which North America chief Rudy Costello took on his duties. This April, Costello too left the company, which subsequently named Diageo veteran Dan Buttling as head of its North America…

IN A YEAR LIKE NO OTHER, THE THINGS THAT STAND the test of time have been magnified. Drinks marketers report renewed gains for “tried and true” brands across the business, as consumers have gravitated to the solid and familiar in their selections amid the pandemic. At just such a moment, IMPACT’S “Blue Chip” brands list is more relevant than ever. It showcases the drinks franchises that have not only garnered momentum in the marketplace, but maintained that momentum over the course of a decade. In many cases, these same brands have accelerated this year from already impressive bases, demonstrating their ongoing importance within the industry. The Blue Chip spirits honor roll includes august labels like Crown Royal, Tito’s, Jack Daniel’s and Jim Beam, while the wine roster recognizes consumer favorites…

IN A RECENT TRADING UPDATE, DIAgeo said a strong performance in the U.S. market has propelled it to a good start to its 2021 fiscal year, which ends next June. “Our U.S. business is performing strongly and ahead of our expectations, reflecting resilient consumer demand and the spirits category continuing to gain share within the total beverage alcohol market,” said CEO Ivan Menezes, adding that increased restocking in the off-trade and the gradual reopening of the on-trade are contributing to momentum. In Europe, Menezes noted, “off-trade demand remains robust and the ontrade channel has largely re-opened with the easing of lockdown measures in most countries, although the risk of additional restrictions remains where infection rates are worsening.” China is also seeing improvement, with recovery in the on-premise, despite the slower…

COCA-COLA HAS ALIGNED WITH Molson Coors to bring its Topo Chico hard seltzer label to the U.S. Under the agreement, Molson Coors will manufacture, market, and distribute Topo Chico hard seltzer in the U.S. The brand is slated to launch next year. Topo Chico hard seltzer will debut in four flavors: Tangy Lemon Lime, Exotic Pineapple, Strawberry Guava, and Tropical Mango, distributed in variety 12-packs of slim cans. The upcoming entry blends purified sparkling water, a gluten-free alcohol base and natural flavors, with minerals added for taste.…

1 Criteria: (a) at least 500,000 9-liter case depletions (b) at least $25 million gross margin (c) either: (i) at least ten consecutive years of volume growth (ii) AACGR of at least 2% from 2009 to 2019 and at least eight annual increases the past ten years 2 Average annual compound growth rate 3 Understates total consumer expenditures because on-premise sales are estimated at retail level. 4 Includes flavors 5 Includes Single Barrel, Winter Jack, Sinatra, No. 27 Gold, Rye, and flavors; excludes Country Cocktails and Gentleman Jack 6 Includes Red Stag, Devil’s Cut, Jacob’s Ghost and flavors 7 Includes Roca, Extra Anejo, Gran Patron and Limited Edition 8 Includes Maker’s 46 9 Includes Sapphire and Original 10 Includes Double Oaked and Rye Source: Impact Databank…

WITH THE AMERICAN CRAFT WHISKEY MARKET CONTINUing to become a more mainstream and accessible spirits category, major spirits marketers see long term growth potential for promising brands. Last year, companies such as Pernod Ricard and Constellation Brands made significant investments in craft whiskies, some of which have developed strong consumer followings and notable points of differentiation in the super-premium space. Others like Deutsch Family Wine & Spirits have seen rapid recent growth on earlier investments such as Redemption Whiskey—acquired in 2015—which shot ahead by nearly 20% last year to 80,000 cases, according to Impact Databank, and is currently at around the 100,000-case mark. While many smaller craft distillers have been under severe pressure due to shuttered tasting rooms and disrupted distribution amid Covid-19, craft players backed by major investors are…

•REPUBLIC NATIONAL DISTRIBUTing Co. (RNDC) has launched eRNDC Mobile, extending its ecommerce platform to a new format. The latest offering from RNDC’s partnership with online distributor LibDib, eRNDC Mobile includes 24/7 customer ordering capabilities, account and invoice information, delivery tracking, sales rep recommendations, and other features. The eRNDC app is available in the iOS store for customers in Colorado, Florida, Indiana, Louisiana, Maryland, South Carolina, Texas, Virginia, and Washington D.C. Customers in Oklahoma and Kentucky will have access by the end of 2020, with additional states going live next year. An Android version will follow. •PERNOD RICARD HAS TAKEN A majority stake in Spain’s Vermutería de Galicia, adding St. Petroni vermouth to its portfolio. Produced in Padrón, in the northern region of Galicia, St. Petroni is made with Albariño grapes…