ZINIO logo
Shanken's Impact Newsletter

Shanken's Impact Newsletter October 15, 2018

Add to favorites

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.

Read More
United States
M Shanken Communications

in this issue

9 min.
hennessy, rémy martin drive gains in high-flying category

NOT SO LONG AGO, COGNAC PRODUCERS were facing significant challenges. Sales in China, one of Cognac’s key markets, had declined precipitously, thanks to President Xi Jinping’s austerity campaign, which included a crackdown on extravagant government gifting of upscale spirits. Top Cognac brands like Martell, Rémy Martin, and Hennessy saw sales suffer, especially at the ultra-premium end. Five years later, Cognac has rebounded dramatically, with volume increasing by double-digits in some markets, including China, where consumption grew by 31.8% last year to 2 million cases. Along with whisk(e)y categories like Bourbon and Irish, Cognac is enjoying a renaissance. Last year global volumes increased by a robust 5.5% to 15.4 million cases. Cognac sales surged even higher in the 12 months through this past July, as shipments rose 8.2% to 16 million 9-liter cases…

8 min.
premium focus drives value growth

WHILE IT’S BEEN A STRUGGLE FOR SOME OF THE LARGER BLENDED SCOTCH WHISKY brands in recent years, the overall Scotch category has carved out solid gains in value terms lately, driven by consumer thirst for upscale bottlings, especially in the rising single malt segment. According to Impact Databank, global Scotch volume rose 1.5% to 85.3 million cases last year. While volume growth has been sluggish—with the category roughly flat over the past five years—export value rose 9% to £4.4 billion ($5.8b) in 2017. That performance capped a run from 2010-2017 in which shipments jumped by a sum of more than £900 million ($1.18b). Export growth continues to ramp up on a per-case basis, particularly in the U.S., where per-case value has leapt by 64% since 2010, reaching £92.98 ($121.91) in 2017.…

1 min.
ongoing expansion

WITH THE U.S. SPIRITS MARKET PROJECTED TO GROW by 2% in volume terms this year, according to Impact Databank, high-end brown spirits like single malt Scotch whisky and Cognac continue to be among the key categories driving progress. Scotch whisky has become a tale of two categories in recent years, with upscale single malts propelling growth and offsetting the struggles of the mainstream blended category. Single malt Scotch advanced by 4.5% in the U.S. last year to approach 1.7 million cases. Single malts now account for 22% of the total Scotch market in the U.S., far surpassing their global share of 7.4%. With consumers gravitating to higher-priced bottlings across the brown spirits realm, the U.S. now represents more than one-quarter of the entire global market for single malts. If there’s a U.S.…

1 min.
diageo’s distill invests in westward whiskey

DIAGEO-BACKED DRINKS ACCELERAtor Distill Ventures has added House Spirits’ Westward American single malt whiskey to its portfolio, making an undisclosed minority investment in the brand, whose distillery is based in Portland, Oregon. The move comes as a wave of ambitious craft distillers continue to develop the small but growing American single malt category. Westward is a 45% abv, non-age-statement blend of whiskies made from Pacific Northwest-sourced barley. The whiskey retails at around $85 a 750-ml. and is available throughout the U.S. As it joins the Distill portfolio, Westward’s production capacity is set to expand by around 40% next year, according to Diageo, and its reach will broaden to include an international audience as well. This year, Westward will lay down about 1,200 barrels of whiskey, which will translate into volume of roughly…

1 min.
breakthru strikes cannabis deal

BREAKTHRU BEVERAGE HAS SIGNED a letter of intent to become the exclusive distribution partner for cannabis producer CannTrust in Canada. Under the proposed deal, Breakthru will make a strategic investment in CannTrust, establishing a cannabis-focused sales brokerage company and developing a route-to-market platform for recreational sales. That brokerage will remain separate from Breakthru’s existing Canadian organization. Breakthru will be purchasing 902,405 common shares of CannTrust at a purchase price of $10.23 per share for gross proceeds of $9,231,600. Breakthru will also have the option to purchase up to an additional 2,000,000 common shares looking forward. The transaction remains subject to typical closing conditions, including the signing of a definitive agreement and completion of due diligence. Recreational sales of cannabis will begin in Canada on October 17, and other drinks players including Constellation, Southern…

2 min.
proximo expands in irish whiskey

GRUPO CUERVO SUBSIDIARY PROXIMO SPIRITS IS LOOKING TO RAISE ITS PROfile in Irish whiskey with the launch of Proper No. Twelve, a new brand owned by mixed martial arts (MMA) fighter Conor McGregor. Proper No. Twelve, produced at Cuervo’s Bushmills Distillery, is a 40% abv, blended Irish whiskey that retails at around $25 and is rolling out nationally. McGregor is the founder, chairman, and owner of the brand through his Éire Born Spirits company, and Proximo is handling global distribution. McGregor worked extensively with master distiller David Elder on the liquid, creating around 100 different blends before settling on the final version, which is aged for at least three years in Bourbon barrels. Proximo Spirits acting CEO Michael Cheek, who replaced the recently departed Mark Teasdale, told Impact the company has…