Shanken's Impact Newsletter July 15, 2021

ALL BUT A HANDFUL OF THE TOP BOURbon and Tennessee whiskey brands saw considerable growth in the U.S. over the course of 2020, even as the Covid-19 pandemic gripped the nation. Overall, Bourbon and Tennessee whiskies in the U.S. logged 5% growth to 25.77 million cases, continuing the sustained progress the category has been showing over the past decade. From 2010 through 2020, Bourbon and Tennessee whiskies expanded by two-thirds in the U.S., adding more than 10.2 million cases to their total. In the last three years alone, the category has tacked on more than 3.7 million cases, as American whiskey’s audience continues to expand and attract more new drinkers from a diverse range of demographics. Drawing the category upward now are labels that lean into the higher end, as…

IRISH WHISKEY HAS BEEN AMONG THE FASTEST-GROWING CATEGORIES IN THE AMERIcan spirits market over the past decade, and had been on track to surpass 5 million cases in the U.S. for the first time ever in 2020. But the pandemic had a significant impact on things, as last year’s off-premise gains weren’t enough to overcome on-premise losses, with total depletions slipping 0.5% to 4.6 million 9-liter cases, according to Impact Databank. The U.S. is still the largest market for Irish whiskey in the world with 40% share of global volume, and it accounted for 57% of all export shipments on a value basis, at $313.9 million in 2020. As a category in the U.S., Irish whiskey is very top heavy, with 3.2 million cases separating the category leader, Pernod Ricard’s…

THE RENAISSANCE OF THE AMERICAN WHISKEY industry has been one of the defining stories of the drinks business over the past decade. After a long period of decline running into the first years of the new millennium, Bourbon and Tennessee whiskies have enjoyed a rebirth that’s seen their combined volume expand by more than 10.2 million cases—or roughly two-thirds—since 2010, according to IMPACT DATABANK. Perhaps the most impressive thing about the American whiskey boom is its robust premiumization dynamic. Bourbon and Tennessee whiskies retailing at $25 and over a 750-ml. have grown much faster than the total category over the past 10 years, jumping 10.5% last year to reach 7.8 million cases. They now account for about a 30% market share, up from a 12% share in 2010. The top…

ONE OF THE LARGEST WINEMAKERS in the U.S. is set to change hands. Ste. Michelle Wine Estates, a driving force behind the development of the Washington wine category over the past few decades, is being sold by corporate parent Altria to New York-based private equity firm Sycamore Partners in a deal worth $1.2 billion. The all-cash transaction is expected to close in the second half of the year, subject to obtaining financing and other customary closing conditions. According to Impact Databank, Ste. Michelle ranked as the eighth-largest wine marketer in the U.S. last year at 7.3 million 9-liter cases, led by the Chateau Ste. Michelle and 14 Hands brands, which account for about 3.1 million cases and 1.3 million cases respectively. David Dearie, the veteran wine executive who became Ste.…

BEVERAGE RETAIL BEHEMOTH TOTAL Wine & More continues to make major moves across the country, entering new markets and adding locations nationwide. Total Wine opened its 216th store this month when it debuted in Grand Rapids, Michigan, on July 8. The new unit is the company’s first in Michigan. Total Wine will also expand into San Diego this year, debuting its first store in that city this fall. In all, the company expects to reach 230 stores by the end of 2021. Michigan is especially notable for Total Wine, as the company is putting a big emphasis on the Midwest for future growth. Total Wine opened its first store in Indiana during the Covid-19 pandemic last year, in the state capital Indianapolis. This follows recent additions in Fairview Heights, Illinois—a…

BEAM SUNTORY AND BOSTON BEER are forming a new alliance to target new drinks categories with some of their largest brands and leverage each other’s distribution networks. The companies will expand Boston Beer’s Truly Hard Seltzer into bottled spirits, and Beam Suntory’s Sauza Tequila brand will expand into additional RTD formats by leveraging Boston Beer’s expertise, production capabilities, and distribution footprint. Terms of the agreement weren’t disclosed. Beam Suntory CEO Albert Baladi and Boston Beer CEO Dave Burwick were former colleagues at Pepsico. “We are each tapping opportunities in adjacent categories by unleashing our shared creativity and respective distribution strengths in spaces that resonate with consumers,” said Baladi. The first new products from the partnership will launch mid-2022, with plans to add more brands in the future.…