News & Politics
Shanken's Impact Newsletter

Shanken's Impact Newsletter April 1-15, 2019

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

15 min.
consolidation, cannabis top of mind for u.s. wholesalers

AMID A RAPIDLY CHANGING WINE AND spirits landscape in the U.S. market, the country’s top wholesalers are striving to transform their operations to match the new realities of the marketplace, while keeping at least one eye squared firmly on the competition. This year, overall wholesale revenues in the U.S. wine and spirits market are expected to increase 2.8% to $59.1 billion. Trends of the last few years have been dominated by the mega-mergers occurring at the top of the ladder—Southern Glazer’s is now two and a half years into its journey as a national player, and RNDC and Break-thru continue to work toward the closing of their own massive combination into a 30-state colossus. While challenges abound—including sluggish volume growth, increasing direct-to-consumer sales, the emergence of canna-bis, and an ongoing deluge of…

1 min.
the middle tier’s evolution

IT’S HARD TO OVERSTATE HOW MUCH CHANGE HAS been taking place across the drinks landscape, where the rise of ecommerce and direct-to-consumer sales are reshaping the business. No one knows this better than the wholesale tier, which has been busy adapting to the new realities of the marketplace—always with an eye toward gaining a competitive edge. Direct-to-consumer (DTC) now accounts for about 10% of the U.S. wine business and is growing at 15% annually, totaling about 6 million cases and $3 billion in sales. As wineries look to connect directly with consumers, wholesalers are seeking out new ways to add value. Those efforts have included backing three-tier friendly e-commerce platforms like Drizly, providing enlarged distribution footprints, and harnessing data and analytics to better understand consumer trends. Southern Glazer’s is now two and…

1 min.
champagne shipments hit new record in u.s.

DESPITE A MODEST 2.4% INCREASE last year, Champagne export shipments to the United States rose to a new all-time high of just under 2 million cases, surpassing the previous record set during the pre-millennial celebrations of 1999, according to recently released statistics from Business France. The U.S. is the second-largest export market for Champagne, after only the U.K., and last year’s increase marked its sixth consecutive annual gain. Veuve Clicquot and Moët & Chandon, both owned by Moët Hennessy, continue to drive the U.S. market forward, with solid 2018 depletions increases of 3.8% and 2.1%, respectively, according to Impact Databank. Those two brands combine for nearly 65% of Champagne consumption in the U.S. market. Placing a distant third is Pernod Ricard’s Perrier-Jouët, which outpaced the market with a 6% gain last…

2 min.
tariffs hinder u.s. whiskey exports

THE GROWTH OF AMERICAN WHISKEY outside the United States has been a boon to U.S. distillers in recent years, but that progress stalled in the latter half of 2018 owing to trade tensions between the U.S. and its major global partners. Exports of American whiskey took a sharp hit following the mid-2018 implementation of retaliatory tariffs across the most important global whiskey markets, according to data from the Distilled Spirits Council of the U.S. The tariffs, levied in response to the U.S. administration’s higher levies on steel and aluminum, range from 10% in Canada to 25% in the E.U. and Mexico. In addition, all U.S. spirits face a 15%-30% tariff in China. According to the data, global exports of American whiskey fell by 8.2% to $526 million from July-November 2018 year-on-year, after…

1 min.
treasury’s 19 crimes enters beer category

TREASURY WINE ESTATES HAS EXtended its 19 Crimes brand into the beer category. The releases include a Pilsner, an American IPA, and a Lager and will initially launch in Ohio with more states to come by the end of the year. The beers will be packaged in 6-packs of 12-ounce cans and will retail for $13. Like the 19 Crimes wine portfolio, the beers will feature Australian convicts on their labels and will use the Living Wine Labels augmented reality app to tell their stories. Last year, the 19 Crimes wine lineup surged 47% to 1.56 million cases in the U.S., according to Impact Databank.…

1 min.
cuervo warns of higher agave costs

GRUPO CUERVO ENJOYED SOLID REVENUE GROWTH IN THE U.S. AND CANADA last year, with its North American net sales up 6.2% to MX$18 billion ($939m), boosted by premiumization within the portfolio. Volume in the region increased 1.4% to 12 million 9-liter cases. Across its global business, Cuervo posted an 8.5% rise in net sales to MX$28.2 billion ($1.5b). While sales growth was robust, operating profit slipped 18% to MX$5.5 billion ($289m) as higher costs cut into earnings. Cuervo noted that it has seen “increases in third-party agave supply costs and lower production efficiencies, reflecting the impact of higher demand of superpremium Tequila along with the industry-wide sourcing of younger agave plants, affecting our distilling efficiency.” In the U.S., the core Jose Cuervo Tequila brand was up 2% to 3.7 million…