News & Politics
Shanken's Impact Newsletter

Shanken's Impact Newsletter December 1-15, 2017

Shanken’s Impact Newsletter, the leading source for exclusive data on the alcoholic beverage industry in the United States and internationally. Every issue features up-to-the-minute data and analysis on trends in the worldwide drinks market.

United States
M Shanken Communications
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in this issue

5 min.
rndc, breakthru join forces, creating a 30-state footprint

COMPETITION IS ABOUT TO GET EVEN stiffer in the U.S. wine and spirits market’s wholesale tier. Just a year after the creation of $17.5 billion giant Southern Glazer’s Wine & Spirits, the current number-two and -three wholesalers in the market— Republic National Distributing Co. (RNDC) and Breakthru Beverage Group (BBG), respectively—have announced plans to merge. The deal, which is subject to regulatory approval and other customary closing conditions, is scheduled to be completed late in the second quarter of next year. RNDC, the nation’s second-largest wholesaler with estimated 2017 sales of $7.5 billion and a market share of 13.6%, has operations in 23 markets across the U.S. Breakthru, which was formed last year through the merger of the former Wirtz Beverage Group and Charmer Sunbelt Group, currently ranks third in the…

10 min.
smaller brands help lift liqueurs

WHILE THE OVERALL LIQUEURS CATEGORY HAS FACED AN UPHILL BATTLE LATELY, THE famously nomadic tastes of millennial consumers and the ongoing momentum of the cocktail movement are still providing growth opportunities for a host of brands. In the U.S., total category volume has slid by about 1.5 million cases since 2010, weighed down by the struggles of big-volume players like DeKuyper, Jägermeister, Southern Comfort and Kahlúa. On the other hand, a host of smaller brands like Patrón Citrónge, St-Germain, Campari, Aperol and others have been in expansion mode, boosted by a prominent position within the mixology set. The global liqueurs category has decreased for four consecutive years, but the decline decelerated to 1% last year from 2.5% in 2015. Among the top 10 liqueur brands worldwide, five lost volume in 2016,…

1 min.
wholesale giants

ANOTHER YEAR, ANOTHER BLOCKBUSTER DEAL AT the middle tier. While distributor consolidation has been an ongoing trend in the U.S. market, the movement accelerated with the creation of Breakthru Beverage and Southern Glazer’s in 2016, and now comes the merger of Breakthru with Republic National Distributing Co. (RNDC). The proposed merger of RNDC and Breakthru will form a distribution giant with a presence in 30 markets and revenues approaching $14 billion. As such, the combined company will present a worthy competitor to middle-tier leader Southern Glazer’s, which has revenues of $17.5 billion and a foot-print of 46 markets. The main difference remains Southern Glazer’s presence in New York and on the West Coast, which RNDC-Breakthru lacks. When Southern Glazer’s opened for business at the start of 2016, it offered suppliers their first…

2 min.
diageo lays out roadmap for 2018

AFTER POSTING AN ACCELERATION IN top-line growth in the key North American market over the past year, Diageo is looking to bolster its core stable of brands and stoke the progress of growth players like Bulleit, Buchanan’s and Don Julio. The North America region accounted for about one-third of Diageo’s total £12.1 billion ($16.3b) in sales and half of its £3.6 billion ($4.9b) in operating profit in its fiscal year ended in June. Diageo’s North America sales grew by 3.4% for the fiscal year. While some observers have pointed to a slowdown for spirits sales in Nielsen channels, Diageo North America president Deirdre Mahlan recently noted that the industry is faring better in control states, which, like Nielsen, account for about 20% of the total spirits market. Mahlan expects the U.S.…

1 min.
ste. michelle’s intrinsic rapidly gains traction

LATE IN THE FIRST QUARTER OF 2016, Ste. Michelle Wine Estates launched Intrinsic ($22), an upscale Cabernet Sauvignon from Washington’s Columbia Valley with a unique production process. Intrinsic got off to a strong start, with that inaugural 2014 vintage finishing at number-32 on Wine Spectator’s Top 100 list. Intrinsic is the creation of Juan Muñoz-Oca, head winemaker at Ste. Michelle’s Columbia Crest winery. It’s made with a process called extreme extended maceration, whereby 40%-50% of the fermented grapes remain on the skins for nine months, compared to a one-month average for most red wines. “Our idea was for the skin to resolve the tannins like French oak barrels normally do,” says Muñoz-Oca. “We’re reaching for what’s ‘intrinsic’ to the grapes and letting the skins develop that texture.” Ste. Michelle has been steadily…

1 min.
bacardi backs havana club in u.s.

BACARDI IS ROLLING OUT A NEW MULTIMILLION-DOLLAR CAMPAIGN BEHIND its Havana Club rum in the U.S. Written, produced and directed by Cuban exiles in Miami, it runs under the tagline “Forced from home. Aged in Exile. Forever Cuban.” The digital and social push will extend to out-of-home and radio in New York and Florida. In the year-to-date, Havana Club is at 10,000 cases in Nielsen channels and 5,000 cases in control states. Bacardi tells Impact that the brand’s sales have exceeded expectations since it went national over the past 18 months.…