Shanken's Impact Newsletter August 1-15, 2021

DESPITE MARKET DISRUPTIONS CAUSED by the global pandemic in 2020, the U.S. market’s premium-plus table wine category posted remarkable gains, driven largely by the strength of imports and a thriving off-premise channel. The total above-$10 wine market last year posted 4.4% volume growth in the U.S., adding more than 3.5 million cases to 2019’s total, according to Impact Databank. Most leading brands across both the domestic and imported segments achieved significant volume gains, but the overall category’s expansion was driven almost entirely by imported standouts like Stella Rosa and 19 Crimes. While the total U.S. wine market is still largely dominated in volume terms by the $10-and-below value segment, the premium-plus segment has been steadily gaining share in recent years. In 2020, wines below $10 a 750-ml. bottle maintained a…

THERE’S NO COMPARISON IN THE INDUSTRY TO WHAT’S HAPPENING WITH HARD SELT-zer right now. A practically non-existent category as recently as six years ago, hard seltzer has trended upward at a dizzying pace, dominating headlines, spawning memes, and generally thriving as Covid-19 shuttered on-premise venues. When the pandemic reached the U.S. full bore in March 2020, it was an open question how it would affect hard seltzer. On the one hand, bar and restaurant closures aren’t necessarily unfavorable for a category that does the vast majority of its business in the off-premise. On the other, hard seltzer is a highly social category and is most closely associated with use occasions like barbecues, beach days, or an afternoon with friends in the park. The isolation of quarantine put a damper on…

IMPACT DATABANK PROJECTS THAT THE U.S. WINE market will decline in volume terms this year for the first time in nearly three decades, with the category expected to slip 0.5% to 334.5 million 9-liter cases. To be sure, wine is running into some heightened competition from spirits, premixed cocktails, and hard seltzers, all of which have been cutting into its market share. But even as marketers work to reverse those negative effects on the category, it bears pointing out that the premium end of the wine market continues to expand significantly, as consumers actively trade up to higher priced bottles. Premium-plus table wines (retailing at $10 a 750-ml. and higher) recorded solid growth in 2020, combining for a 4.4% volume increase. Premium-plus brands accounted for fully half of the total…

CINCORO, THE LUXURY TEQUILA brand backed by a group of NBA owners including Michael Jordan, launched just ahead of the pandemic in fall of 2019, but the unprecedented condi-tions haven’t stopped it from gaining strong momentum at the category’s top tier. Cincoro starts at $70 for its Blanco expression and reaches $1,600 for its Extra Añejo. “Our May sales more than tripled since last May, making us the fastest growing Tequila brand, year on year, according to Nielsen,” says Cincoro CEO Emilia Fazzalari. “We closed the month of June with all-time record high sales.” For the current calendar year, Cincoro, which is packaged in six-pack cases, is expected to reach the equivalent of 75,000 9-liter cases. Fazzalari adds that the brand aver-ages a 50% reorder rate nationally with its most…

DIAGEO POSTED SALES UP 16% ON AN organic basis to £12.7 billion ($17.7b) for its fiscal year ended in June, with operating profit up 17.7% to £3.7 billion ($5.2b). The company hailed a 20% organic sales increase in North America, “reflecting resilient consumer demand, spirits taking share of total beverage alcohol, and the replenishment of stock levels by distributors and retailers.” Tequila was a major driver of U.S. growth during the fiscal year, with net sales up 87%, led by Don Julio (+69%) and Casamigos (+126%), despite sup-ply constraints on some aged expressions. Crown Royal (+13%) also saw some supply issues, but was boosted by its Peach, Apple, and Vanilla flavored offerings. Among other key whiskies in the portfolio, Johnnie Walker rose 19% in the U.S., while Bulleit was up…

INDUSTRY VETERAN MIKE KEYES WILL RETIRE AS PRESIDENT AND CEO OF PROX-imo Spirits by the end of the year, with Luis Félix, currently Grupo Cuervo’s man-aging director for Mexico & Latam, set to replace him. Prior to joining Proximo in 2019, Keyes had a long career at Brown-Forman, including time as president of the North America region. Meanwhile, Cuervo posted second quarter net sales up 9.7% to $480 million, despite a 3.8% decline to $343 million in North America, where the company was hampered by “foreign exchange effects, and the difficult comparison with Covid-19 pandemic-driven results in the second quarter of 2020, partially offset by price increases in selected markets.” Cuervo’s North America volume was down 5.1% to 4.4 million cases in the second quarter, affected by tough comps and…