News & Politics
Shanken's Impact Newsletter

Shanken's Impact Newsletter May 15, 2018

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

11 min.
patrón leads a host of brands making gains at the high end

GLOBAL TEQUILA VOLUMES INCREASED BY 3% to 22.6 million cases last year, according to Impact Databank, with eight of the top 10 brands posting solid gains. In the U.S., which accounts for nearly 80% of all Tequila consumption, volumes rose by 7.5% to nearly 17.4 million cases in 2017. Overall, Tequila exports have expanded by nearly 30% since 2010. The U.S. market’s luxury and super-premium tiers continue to outperform the category. Luxury Tequila (above $40 a 750-ml.) increased by 11% to nearly 3.7 million cases last year, led by Patrón, whose volume rose by 7.5% to 2.5 million cases. Earlier this year, Bacardi Ltd. acquired full control of the Patrón franchise (which also includes the higher-end Roca Patrón and Gran Patrón labels as well as Patrón XO Café and Citrónge liqueurs)…

11 min.
control states invest to keep pace

LOOKING TO KEEP IN STEP WITH CONSUMER TRENDS AND THWART PRIVATIZATION EFFORTS, the 17 U.S. control states continue to refresh their business models. Control states are investing in category management through upgraded technology, and adding new stores as well as renovating and relocating existing locations. They’re also offering more packaging variety and retail discounts. “We have the specter of privatization hanging over us every time the legislature comes into session,” says Hannibal “Mac” Gipson, administrator of the Alabama Alcoholic Beverage Control Commission. “We learned a lesson from Washington State. We try to upgrade, remodel, and relocate as many stores as we can to enhance the shopping pleasure of our customers.” Faced with significant privatization pressure over recent years, Oregon, the number-six control state by volume, has been steadily expanding its number…

1 min.
tequila’s high-end surge

AS CONSUMER TRENDS TOWARD CRAFTED PRODUCTS and connoisseurship continue to drive the upper echelons of the drinks market, Tequila is increasingly asserting itself as a force at the high end. Overall, Tequila has enjoyed an impressive rise in the U.S. market, expanding by 46%—or nearly 5.5 million cases—since 2010, to cross 17 million cases. Even more striking, though, is the fact that Tequila is advancing most rapidly within its upscale segment. Offerings priced above $40 a bottle were up 11% to nearly 3.7 million cases last year, and brands retailing in the $25-$40 area advanced by 14% to 2.9 million cases. As recently as 2013, the above-$25 Tequila category had total volume of 4.7 million cases. Since then, that segment has expanded by 40% to 6.6 million cases, and shows no…

1 min.
breakthru to acquire majestic wine & spirits

BREAKTHRU BEVERAGE GROUP IS acquiring Pennsylvania-based Majestic Wine and Spirits USA for an undisclosed sum. The deal is expected to close around May 31. Breakthru president and CEO Greg Baird called Majestic “one of Pennsylvania’s premier brokerages,” adding that the acquisition will expand Breakthru’s presence in the Keystone State, where Majestic has statewide coverage. Breakthru had Pennsylvania revenues of $215 million last year. The new Majestic Division of Breakthru Beverage Pennsylvania will operate as a separate sales unit. In the run-up to the completion of its proposed merger with RNDC—expected before the end of June—Breakthru has been solidifying its Northeastern footprint. In addition to the deal for Majestic, Breakthru affiliate Connecticut Distributors recently acquired fellow Connecticut wholesaler New England Wine & Spirits.…

1 min.
boston beer rebounds in early part of 2018

THE BOSTON BEER COMPANY’S revenue grew 17.8% to $190.5 million in the first quarter, with shipments rising 15% over the same period last year. The strong first quarter, with depletions rising 8%, was attributed to solid showings from the Twisted Tea, Truly Spiked & Sparkling, and Angry Orchard labels. Sam ’76 and other new Samuel Adams releases also performed well. For 2018 as a whole, Boston Beer projects sales growth of 0%-6% and will increase prices by as much as 2%. The first quarter marked a rebound for the company, which saw revenue decline 4.8% to $863 million last year.…

2 min.
prosecco’s torrid pace cools down

GLOBAL GROWTH OF PROSECCO slowed somewhat in 2017, as export shipments increased just 4.6% in volume terms to 28.8 million 9-liter cases, compared to 19% growth the year prior. Shipment volume to the United States also decelerated last year, rising 5% to 5.5 million cases. That marked the first time in five years that Prosecco failed to grow by double-digits in the American market. In IRI channels, Prosecco was up 30% in the U.S. in 2016, but slowed to 17% in 2017, and in the 24 weeks through March 24, volume growth decelerated to 11%. The leading Prosecco brands in the U.S. continued to show healthy increases last year, but their growth has slowed somewhat compared to the torrid pace of recent years. E.&J. Gallo’s La Marca, the market’s top Prosecco…