News & Politics
Shanken's Impact Newsletter

Shanken's Impact Newsletter July 1, 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

5 min.
the rndc-young’s deal shakes up the middle tier landscape

WITH THE ANNOUNCEMENT THAT REPUBLIC National Distributing Co. (RNDC) and Young’s Market will join forces to create a 33-market, $11 billion distribution giant, the middle tier’s long-term consolidation trend continues. The RNDC-Young’s combination will boast a market share of nearly 19%, behind top-ranked Southern Glazer’s Wine & Spirits at 32%. The top two distributors nationwide thus will have an aggregate share of above 50%. Overall, the top 10 distributors will combine for a share of nearly 75% this year, up from 59% in 2010. Pending regulatory approval, RNDC and Young’s will form a joint venture to operate in all markets where Young’s is now present. RNDC will lead operations in all 33 markets and become managing partner of the joint venture for the Young’s states, which will continue to be called Young’s…

9 min.
rum marketers eye premiumization

WHILE TOTAL RUM VOLUMES DECLINED IN THE U.S. LAST YEAR, DOWN 1% TO 22.6 MILLION cases, according to IMPACT DATABANK, marketers are putting renewed efforts toward premiumizing the category. Overall, 10 of the top 15 rum brands in the U.S. receded last year and, as rum has largely been left out of the brown spirits boom, its U.S. volume has slipped by about 1 million cases since 2010. At the same time, however, global rum volumes rose 1% to 123.8 million cases in 2018. The top 10 brands outpaced the category as they climbed 1.8% to 46.2 million cases, driven by brands like Bacardi (+2% to 17 million cases), Havana Club (+4.1% to 4.6 million cases), Brugal (+7.3% to 2.8 million cases), and The Kraken (+18.5% to 800,000 cases). Premiumization and product…

1 min.
rndc makes its move

HEADING INTO THIS YEAR, THE DRINKS INDUSTRY was focused on how the proposed RNDC-Breakthru Beverage merger would impact the landscape within the U.S. market’s wholesaler tier. As it turned out, that deal fell apart due to resistance from the Federal Trade Commission. But RNDC has quickly rebounded, agreeing to form a joint venture with Young’s Market Co. in all of Young’s existing markets. The combined company will now have a 33-market footprint and revenues of approximately $11 billion. Importantly, gaining federal approval is not expected to be a hindrance to this deal as it was with RNDC-Breakthru. Young’s CEO Chris Underwood told Impact that due to the lack of overlap between Young’s and RNDC in any market except Arizona, he sees the transaction as “pro-competitive,” and the two parties expect it…

1 min.
casella family denies a sale is in the works

CASELLA FAMILY BRANDS HAS CONFIRMED that outside investors have expressed interest in its wine business, including the Yellow Tail brand, but countered recent reporting that a sale process is underway. The Australian Financial Review reported that a potential sale could garner in the range of A$500 million ($345m). In a statement, Casella Family Brands confirmed that unnamed investors have approached the company about purchasing its wine brands but said no sale process has been initiated, adding that it will continue to invest in its portfolio. While Yellow Tail is the largest of Casella’s wine brands, the company’s range also includes Peter Lehmann and Laira, among others. In the U.S., Yellow Tail is handled by Deutsch Family Wine & Spirits, and was down 2% to 7.2 million cases in 2018, excluding…

1 min.
brown-forman makes gin buy, adding fords

BROWN-FORMAN HAS AGREED TO ACQUIRE The 86 Company and its Fords gin brand for an undisclosed sum. A collaboration between Simon Ford and master distiller Charles Maxwell of Thames Distillers, Fords gin retails in the super-premium segment and is aimed at the mixology community. Brown-Forman president and CEO Lawson Whiting said the move gives the company a brand with strong momentum in one of the more vibrant areas of the spirits market. Ford and The 86 Company team will continue to be involved in producing and building the brand moving forward.…

2 min.
cuervo bolsters its tradicional tier

WITH 100%-BLUE AGAVE TEQUILAS soaring in the U.S., market leader Jose Cuervo is turning up the volume on its higher-priced Tradicional tier with a new multi-million dollar ad campaign called the “Father of Tequila.” Last year, the Jose Cuervo brand had a U.S. media spend of $15.4 million, according to Kantar, up 8.8% from the previous year. Created with advertising agency Crispin Porter + Bogusky, the ads highlight Cuervo’s heritage as the originator of 100%-blue agave Tequila. The new campaign includes 15- and 30-second TV spots set at a party hosted by the “Father of Tequila” and featuring pioneers and innovators in the arts and sciences throughout history. The Tequila dates back to 1795 and has passed through 10 generations of Cuervos, starting with its namesake, José Antonio de Cuervo. “Cuervo Tradicional…