Shanken's Impact Newsletter April 1-15, 2021

FOR OVER A YEAR NOW, THE QUESTION most on Americans’ minds has been how long it will take to return their lives to normal. According to leading wine and spirits wholesalers surveyed by Impact, we could be getting closer, at least in terms of a distinct turning point in the recovery of the hospitality business, where restaurant and bar operators have suffered mightily over the past year owing to restrictions undertaken to combat the pandemic. At press time, a number of key markets were increasing capacity limits on indoor dining amid a general downturn in Covid cases since the beginning of the year, and wholesalers were reporting that on-premise activity was on the rise. With vaccines rolling out more widely in recent weeks, the hope is that reopening momentum will…

Debra Crew was named president of Diageo North America last summer, having previously served on the company’s board. Despite taking the helm at one of the most tumultuous moments in the history of the drinks business, she succeeded in steering the spirits giant’s North America region to a resilient performance through the remainder of 2020, with the portfolio’s momentum continuing during the first few months of this year. In the Diageo’s fiscal first half through December, the North America unit—comprising nearly 40% of the company’s global revenue—posted a net sales increase of 8% to £2.7 billion ($3.8b) and operating profit up 9% to £1.2 billion ($1.7b). Growth was led by double-digit net sales gains for a number of key brands across multiple categories, among them Don Julio, Baileys, Bulleit, Johnnie…

IT’S BEEN QUITE A YEAR FOR THE MIDDLE TIER OF the U.S. wine and spirits business. The market’s top wholesalers faced unprecedented challenges in 2020 owing to the pandemic, which drastically reduced on-premise business and forced a massive shift of resources to support the booming off-premise segment—a herculean task complicated further by strict containment measures necessary to keep staff and customers safe. A year on, we’re still not out of the woods, but there have been a number of encouraging signs in recent weeks, including the rapid rollout of vaccines across the U.S., a general decline in cases since the start of the year, and an increasing pace of reopenings in the on-premise. In the run-up to press time, some key wholesalers were even reporting that onpremise sales were starting…

AT PRESS TIME, NEW YORK LAWMAKers had reportedly reached a consensus on cannabis legalization. Governor Andrew Cuomo and leaders in the state legislature have been at odds for months over a variety of provisions surrounding legalization, such as the right to grow cannabis in one’s home for personal use as well as a provision for social consumption spaces. Both are now said to be included in the deal. “It is my understanding that the three-way agreement has been reached and that bill drafting is in the process of finishing a bill that we all have said we support,” State Senator Liz Krueger told Bloomberg. The bill was expected to be taken up in late March and sales could begin a year after Cuomo signs it into law. While details of…

PERNOD RICARD IS TEAMING UP WITH SPIRITS INDUSTRY VETERANS ELWYN Gladstone and Mark Teasdale, who have opened a new Lafayette Imports company as a wholly owned subsidiary of their existing company Biggar & Leith. Based in the New York area, Lafayette Imports will handle Pernod Ricard’s Plymouth Gin, Powers Irish Whiskey, and a range of craft Irish whiskey brands including Knappogue Castle single malts and Clontarf (both of which Pernod gained in its 2019 acquisition of Castle Brands). Those brands will join Biggar & Leith’s spirits portfolio of Spytail Rum, Hotel Starlino Vermouth, Stambecco Amaro, The Gladstone Axe Malt Scotch, Shanky’s Whip, and The Butterfly Cannon Tequila. “Plymouth, Powers, Knappogue Castle, and Clontarf have strong potential in growing categories,” stated Pernod Ricard chairman and CEO Alexandre Ricard, adding, “This dedicated…

SOUTHERN GLAZER’S HAS TAKEN AN undisclosed equity stake in ReserveBar, a leading e-commerce platform for premium and luxury spirits in the U.S. The top-ranked U.S. wholesaler made the move via its Southern Glazer’s Ventures business, led by the company’s chief growth officer, David Chaplin. Financials weren’t disclosed. Southern Glazer’s says the deal expands its digital marketing offerings to suppliers by providing an additional three-tier-compliant platform for marketing their brands to consumers. ReserveBar isn’t a licensed supplier, wholesaler, or retailer, but connects consumers with licensed retailers to make their purchase. The platform has become a showcase for “premium, ultra-premium and luxury spirits and is dedicated to personalization, upscale packaging, and fast and reliable delivery,” Southern Glazer’s stated.…