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

Within a portfolio that includes multi-million-case spirits giants like Jameson Irish whiskey and Absolut vodka, it’s easy to forget that Pernod Ricard USA has wine volume of nearly 2 million cases annually. While top brand Jacob’s Creek is fighting uphill in the Australia category, Pernod has seen strong gains for brands like G.H. Mumm Champagne and Spain’s Campo Viejo lately, with the latter earning Impact “Hot Brand” honors earlier this year after roughly doubling in size to more than 300,000 cases over the past three years. Impact managing editor Daniel Marsteller recently spoke with James Slack, SVP of Wine, Champagne, and Prestige at Pernod Ricard USA, to hear about what’s ahead for the wine portfolio. IMPACT: How are conditions, broadly speaking, for Pernod’s key Champagne and wine brands? Slack: Ultimately,…

CONCHA Y TORO ENJOYED ROBUST gains in the first three quarters of its fiscal year, with total wine sales up 21% to $691 million in the nine months through September on a volume increase of 6.6% to approximately 26 mil-lion 9-liter cases. EBITDA leapt 53% to $140 million, with the company benefiting from an improved sales mix and a positive foreign exchange effect. The Chile-based winemaker’s U.S. business, operating under the Fetzer Vineyards Co. banner, grew by 23% to $123 million in the nine-month period, including a 14% increase in the most recent quarter. The company said it saw rapid U.S. volume growth for import labels including Casillero del Diablo (+32%), Diablo (+44%), Trivento Re-serve (+9%), and Frontera (+9%) in the three months through September. Additionally, California wines Bonterra and…

IN VALUE TERMS, IT DOESN’T GET ANY bigger than Johnnie Walker in the global spirits industry. According to IMPACT DATABANK, the Diageo-owned blended Scotch giant’s retail sales value was at $5.5 billion last year, placing it about $765 million ahead of Hennessy Cognac, the second most valuable spirits brand worldwide. While this year has presented more than its share of challenges—with the brand navigating on-premise shut-downs in key markets both in the U.S. and globally—Johnnie Walker rose 11% by volume in Nielsen channels in the 39 weeks through October 3, after slipping 3% to 1.85 million cases in the U.S. overall in 2019, according to IMPACT DATABANK. Sophie Kelly, senior vice president of whiskies at Diageo North America, says the plan is to diversify and expand Johnnie Walker’s U.S. audience…

•THE CONSORZIO TUTELA PROsecco DOC has officially received approval to begin exporting Prosecco DOC Rosé, with shipments to the U.S. and other key markets set to begin immediately. Approximately 20 million bottles (about 1.7 million cases) of 2019 Prosecco DOC Rosé were produced, with 15%-20% distributed in Italy. The balance has begun shipping to leading foreign markets such as the U.S., Canada, U.K., East Asia, France, and the Nordic countries. There are between 40 and 50 million bottles of the 2020 vintage of Prosecco DOC Rosé in production, set to be released in January of 2021. •BROWN-FORMAN-OWNED THE GlenDronach single malt Scotch whisky has launched a new Port-pipe finished expression across the U.S. The GlenDronach Port Wood is bottled at 46% abv, non-chill filtered, and is first matured in Pedro…

DELIVERY STARTUP GOPUFF, REcently valued at $3.9 billion, has agreed to acquire West Coast retailer BevMo for $350 million. The purchase gives the company a presence in California and dramatically ups its profile in the booming beverage alcohol e-commerce sector. Founded by Drexel University college students Rafael Ilishayev and Yakir Gola in 2013, GoPuff is head-quartered in Philadelphia and operates 200 micro-fulfillment centers servicing over 500 U.S. cities. It offers 24/7 de-livery of everything from food and drink to cleaning supplies, home needs, and over the counter medications—as well as alcohol in select markets—for a flat $1.95 fee. GoPuff says the acquisition will see BevMo customers gain “access to instant delivery of alcoholic beverages as well as everyday items across GoPuff’s rapidly expanding product inventory.” BevMo has 161 stores on…

CONSTELLATION BRANDS’ AND E.&J. GALLO’S PROPOSED $1 BILLION DEAL HAS taken another step forward. The companies have signed an FTC Agreement Containing Consent Order that, if accepted by the government, will allow the deal to close by the end of February. The process typically takes anywhere from 30 to 45 days. The deal, in its current form, would shift a number of brands priced at or below $11, including Clos du Bois, Black Box, and Mark West, among others, from Constellation to Gallo and contains a $250 million earnout if performance goals are met within two years of the deal closing. In addition, Constellation announced that it expects two other substantial sales to finalize by the end of fiscal 2021 (which ends next February): its $130 million sale of Nobilo—also…

TREASURY WINE ESTATES (TWE) IS PAUSING ITS PREVIOUSLY ANNOUNCED PLAN to demerge its Penfolds business as it sharpens its focus on restructuring in the U.S. and surfing tumultuous market conditions in China, where new tariffs are being threatened on Australian wines. Treasury announced in April that Penfolds—which accounts for 10% of company volume and more than half of profits—could be spun into its own business to allow the rest of the TWE portfolio to accelerate its premiumization drive. CEO Tim Ford said the company continues to see value in that plan, but will not complete the demerger by the end of 2021 as previously floated. Instead it’s focusing on building momentum in the U.S., where it’s continuing “to explore the potential divestiture of selected brands and assets,” as it stated…

WHILE MUCH HAS CHANGED ACROSS THE BEVERAGE alcohol landscape this year, we’ve also witnessed a continuation of some very promising longer-term trends. Examples of the latter include the skyrocketing growth of both Cognac and ready-to-drink cocktails. Each of those categories has consistently been at the forefront of off-premise growth in recent months, and collectively they’ve contributed a strong share of the gains in the retail spirits segment that has done so much to help offset the on-premise decline. According to IMPACT DATABANK, Cognac shipments to the U.S. have more than tripled in value since 2010, topping $1.8 billion in 2019 on a 25% increase. The U.S. has been the tip of the spear for Cognac exports globally, which nearly doubled to $4.1 billion over the same time frame. Hennessy has…

THE EUROPEAN UNION HAS EXpanded tariffs on American goods including wine and spirits, and 20 trade associations, including DISCUS and WSWA, among others, have released a statement imploring the EU to abandon this escalation. While American whiskies are already under tariffs in the E.U., the new round of 25% levies includes American rum, brandy, vodka and vermouth. Despite the new tariffs, European Union officials expressed hope that trade tensions could be ratcheted down on both sides moving forward following the U.S. presidential election.…

AUSTRALIAN WINE EXPORTS INCREASED 4% TO JUST UNDER A$3 BILLION ($2.1b) in the 12 months through September, as shipments grew in value terms across each of the country’s top five markets. Volume dipped 0.4% to approximately 85.7 million cases. Shipments to the U.S., Australia’s second-largest export market by value after mainland China, increased 1% to A$439 million ($315m) even as volume slipped 4% to 15.6 million cases. The Australian wine category was up 5% to 5.1 million cases in IRI channels in the year-to-date through October 4. The top two brands both showed solid growth over that period, with Yellow Tail up 6.6% to 3.3 million cases and 19 Crimes rising 33% to 840,000 cases, according to IRI. While Australia’s shipments to China advanced 4% to A$1.17 billion ($840m) in…

CANNABIS INITIATIVES SWEPT ON November 3, going five-for-five in states voting on the matter. New Jersey, Arizona, Montana, and South Dakota approved recreational cannabis legalization, and Mississippi voters over-whelmingly chose the more generous of the two medical programs under consideration. With 62.6% of precincts reporting, New Jersey’s Public Question 1 had 66.9% approval and, with 85.3% reporting, Arizona’s Prop. 207 was at 59.8%, a strong sign of changing public opinion on the topic. For comparison, both figures are higher than the percentage of ‘yes’ votes in either Washington or Oregon when they legalized in 2012 and 2014 respectively. Beyond its borders, New Jersey is seen as a key domino to fall in the Northeast. By beating New York and Pennsylvania to the punch, the Garden State is in position reap…

WOODINVILLE, WASHington-based Ste. Michelle Wine Estates has appointed Derika Legg as vice president for the company’s west region. Legg joins Ste. Michelle from her own D2 Consulting and On the Horizon Counseling and, in her new role, will lead Ste. Michelle’s sales in Washing-ton, Oregon, California, Idaho, Montana, Alaska and Hawaii. In addition to her years leading a consulting firm, Legg has additional experience in the beverage world from her time in senior roles at PepsiCo. Legg will report to Dan Heller, executive vice president of sales. •Breakthru Beverage has announced that Julian Burzynski will take over as East U.S. Region President, effective January 1, when current president Kevin Dunn retires. Burzynski most recently led Breakthru’s Canadian business and, prior to that, he served as chief sales officer for the…