Shanken's Impact Newsletter October 1, 2021

SINGLE MALT SCOTCH WHISKY WAS AN unfortunate standout category in 2020, with the largest brands facing nearly uniform declines and spotty progress among the smaller leaders in the category. A one-two punch—from tariffs and the upheaval of the Covid-19 pandemic—pushed the category back, though the challenges only erased one year of gains. For 2020, single malts in the U.S. declined overall by 5.5% to just over 1.7 million cases, keeping their level above that of 2018. Assuming the tariffs are permanently removed—they were suspended for five years in June—and the pandemic is a temporary speed bump, it seems likely that single malt Scotch will bounce back for another round and return to growth. While last year’s declines are significant and put the category’s leaders in a difficult position, on a…

THE WINE SPECTATOR SCHOLARSHIP FOUNDATION IS DONATING $10 MILLION TO expand and update the teaching facilities of Napa Valley College (NVC) and its Viticulture, Wine and Technology (VWT) program. Marvin R. Shanken, editor and publisher of Wine Spectator, announced the donation September 15, as part of the Scholarship Foundation’s efforts to help educate the next generation of American winemakers and grapegrowers. “If there was ever an educational institution poised for significant contributions to the growth of the California wine industry, this is it,” said Shanken. “It is our hope that the door for learning opens wider for young adults from all walks of life, providing a path for future leaders in the wine industry.” Napa Valley College’s VWT is one of the largest wine technology college programs in the country,…

FORMERLY ONE OF THE BEST-PERFORMING SEGMENTS of the U.S. spirits market, the single malt Scotch category was buffeted by the twin challenges of Covid and tariffs last year, resulting in the category’s first U.S. decline in memory, a 5.5% dip to 1.74 million cases, according to Impact Databank. This year, with the broad reopening of the on-premise and tariff relief riding to the rescue, the category is in recovery. Indeed, single malt Scotch has been quietly outperforming most other spirits so far this year, especially in the off-premise. For the 26-week period ending July 17 in Nielsen channels, single malt dollar sales registered a 15% increase—versus 6% for blended Scotch—faster than any other major spirits category, other than pre-packaged cocktails (+47%). The only other segments to outperform single malt Scotch…

DIAGEO HAS ANNOUNCED THE ACQUISITION OF A MINORITY STAKE IN JAPAN’S Komasa Kanosuke Distillery for an undisclosed sum. The investment was made through Diageo-backed Distill Ventures, and will allow the distillery to expand production, new product development, and its international sales and marketing teams. Based in Kagoshima, the distillery is known for its Kanosuke whisky brand. It debuted its first single malt whisky (a three-year-old) in June, to be followed by further limited cask-strength releases ahead of the launch of its flagship single malt brand, slated for next year. So far, distribution has been limited to Japan, but Diageo is eyeing international expansion in the coming years. According to Diageo, “the investment agreement envisages a transition to a 50:50 joint-venture ownership structure with Diageo subject to future performance.” Komasa Kanosuke…

PERNOD RICARD HAS TAKEN A MI-nority stake in Sovereign Brands, the company behind the highly successful French sparkling wine brand Luc Belaire. No financial details or the exact stake in Sovereign were disclosed. The deal will allow Sovereign to retain day-to-day independence and the company will maintain its current management and it’s distribution network. The companies describe the deal as the first step in a long term partnership that may lead to co-developed commercial and industrial projects. “Sov-ereign Brands has demonstrated exceptional innovation and marketing skills. We are thrilled to partner with Brett and Brian Berish, two of the most innovative entrepreneurs of our industry,” said Alexandre Ricard, CEO of Pernod Ricard. Sovereign flagship Luc Belaire, a portfolio of French sparkling wines, has seen tremendous growth over the last few…

DISARONNO INTERNATIONAL HAS launched a number of new offerings over the past year to strong initial response. “2020 was our year for innovation, after not having any innovation in our portfolio, in the case of the brand Disaronno, for 500 years,” Ray Stoughton, executive vice president and general manager of Disaronno International, told Impact. Disaronno’s core amaretto increased 1.1% to 336,000 cases in the U.S. last year, according to Impact Databank. At the forefront of this innovation push is Disaronno Velvet ($30 a 750-ml.), a cream offshoot of the almond liqueur and the first line extension in the history of the brand, which launched in April 2020. Unable to pursue many of the typical brand activations that accompany a new product launch due to Covid restrictions, the company pushed forward…