Shanken's Impact Newsletter October 15, 2021

EACH YEAR, IMPACT SALUTES THE BEST performing wine, spirits, and beer brands in the U.S. market over the long term with its “Blue Chip Brands” honor roll. The challenges of the past year and a half have certainly created new business dynamics—accelerating some areas of the market while hampering others—but, as the Blue Chips roster shows, many of the industry’s major players remain at the top of their game. To meet Impact’s Blue Chip criteria, brands must show at least 10 consecutive years of volume growth, or average annual compound growth of at least 0.5% from 2010 through 2020 with positive growth in at least eight of those 10 years. In addition, the brands must have maintained gross margins of at least $25 million last year. This year’s Blue Chip…

FOR 20 YEARS, CANADIAN WHISKY HAS BEEN HOVERING BETWEEN 21 AND 23 MILLION cases worldwide, finding favor in its domestic market. But aside from standout labels like Crown Royal, the category continues to stagnate in the U.S., its top global market. While Canadian whisky has yet to garner the enthusiastic following of American Bourbons and ryes, global depletions held steady last year at 21.3 million cases, including flavors, boosted by Crown Royal’s 3% increase. In Canada, the second-largest market for the spirit, Canadian whisky increased a sizable 4.2% to 3.6 million cases. However, the category still faces challenges in the U.S., which accounts for more than half of total consumption. In 2020, depletions stateside fell 1.1% to 12.5 million cases, excluding flavors. Still, suppliers have been successfully using innovation in…

IN THE DRINKS BUSINESS, AS ELSEWHERE, ATTENTION tends to fly to the latest trends and the newest innovations. It’s not hard to see why, because each innovative new category or brand can hold the potential to capture consumers’ interest and become the next significant growth engine for the industry. But as the market chases the next prime growth opportunity—be it seltzers, spirits-based cocktails, or “better for you” wines—it’s worth noting the existing brands that have become the industry’s benchmarks. These are the brands that drive consistently strong performance year in and year out over the long haul. In short, they are the “Blue Chips” of the business. This year, Impact’s “Blue Chip Brand” awards honor a total of 71 labels from across the wine, spirits, and beer categories, featuring household…

STOLI GROUP SUBSIDIARY TENUTE del Mondo has acquired a 50% stake in Provence winery Chateau Miraval from actress Angelina Jolie for an undisclosed sum. That makes the drinks group a 50/50 partner with Brad Pitt, Jolie’s ex-husband and former partner in the winery. Miraval, which is handled by Vineyard Brands in the U.S., recently earned an Impact “Hot Prospect” award after rising 17.4% to just under 150,000 cases in the U.S. market last year. The chateau in Correns, France sits on 400 hectares (988 acres) and was acquired by Pitt and Jolie in 2012 for an estimated $60 million. It was said to be worth about €140 million ($162m) currently. Tenute del Mondo now adds the 50% interest in Miraval to its existing holdings. The company owns Argentina’s Achaval Ferrer…

THE LARGEST SELLING SPIRITS BRAND in the U.S., Tito’s Handmade Vodka long ago transcended its category and imposed itself as a dominant force in the market propelling the fortunes of distributors and retailers across the country. According to IMPACT DATABANK, Tito’s finished 2020 at 10.4 million cases on 18% growth, capping a five-year run in which it expanded by 25% annually and tacked on more than 7 million cases. This year the brand appears poised to continue its double-digit trajectory, even from its enormous base, with its control state volume rising 11% in the first seven months of 2021. Impact Databank projects that Tito’s will surpass the 11-million-case mark for the full calendar year. As large as the brand has become, Tito’s marketers see ample white space for it to…

DIAGEO WILL INVEST $500 MILLION IN ITS TEQUILA PRODUCTION FACILITIES in Mexico to help meet surging demand. Alvaro Cardenas, president of Diageo’s Latin America and Caribbean region, said the drinks giant will use the outlay to open its third local facility in La Barca, Jalisco, calling the move the most significant investment the company has made in the Latin America and Caribbean region in a decade. Diageo’s Don Julio and Casamigos Tequila brands continue to surge, and the company sees ample room for further growth looking ahead as more consumers gravitate to the category. Meanwhile, Diageo said it’s seeing net sales momentum across all regions so far in its new fiscal year, which ends next June. “Our North American business is performing strongly, despite some supply chain constraints, reflecting resilient…