News & Politics
Shanken's Impact Newsletter

Shanken's Impact Newsletter August 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

12 min.
premium wines fuel category growth as consumers trade up

AUGUST 1 & 15, 2019 THE U.S. MARKET’S PREMIUM WINE CAT-egory continued to show solid gains last year, with domestic and imported wines at $10 a 750-ml. and above showing steady growth. Wines priced at $10 and above neared the 80-million-case mark last year on a 4.7% volume rise, according to Impact Data-bank. Super-premium wines (priced above $14 a bottle) grew by 4.2% to 60.8 million cases, comprising about a 77% share of the premium-and-above wine market in the U.S. On the retail value side, both the premium and super-premium wine segments made impressive gains, with super-premium wines jumping 4.6% to more than $9 billion in retail sales last year. Premium wines (priced $10-$14 a bottle) expanded to nearly $4.5 billion in retail sales on a 7.2% gain. Combined, the two segments’…

11 min.
key players on the move in china

CHINA HAS BEEN A SIGNIFICANT SOURCE OF GROWTH FOR THE GLOBAL DRINKS INDUS-try over the past decade, with imported wine and spirits making inroads with the country’s rapidly expanding middle class. But China’s recent economic slowdown has hampered expansion for key categories including baijiu, Cognac, and French wine. The Chinese economy has slumped to its slowest pace in 27 years—registering 6.2% growth year-on-year through the second quarter of 2019. In addition to the ongoing trade war with the U.S., high consumer debt dating back to the 2008 financial crisis has resulted in more cautious spending patterns, from personal technology to cars to beverage alcohol. While the consequent belt-tightening has been exacerbated by the trade war, the economy already had been gradually decelerating since 2007. Against that backdrop, total wine volumes declined by…

1 min.
tapping the high end

PREMIUM WINES ARE CLEARLY ON THE RISE IN THE U.S. market. In the last five years alone, wines retailing at $10 and above have expanded by almost 15 million cases, and added nearly five percentage points of share on a volume basis. The premium category now accounts for 27.4% of the total wine market in volume terms, up from 22.6% in 2014. While the premium segment’s rapid share gains have come in part due to the decline of the lower end, upscale wines continue to show strong momentum in the marketplace. Driven by hot categories like imported rosés, sparkling wines, and California red blends, the $10 and over category has seen its retail value climb by 24% since 2015, topping $13.5 billion last year, according to Impact Databank. While the $10-$14 segment…

1 min.
sevenfifty, bev media join forces

SEVENFIFTY TECHNOLOGIES AND Beverage Media Group have formed a strategic alliance to create a comprehensive new online marketplace for beverage alcohol in the U.S. The two companies will leverage Seven-Fifty’s digital platform and Beverage Media’s business-to-business data to offer what they say will be the largest e-commerce channel for the beverage alcohol trade. SevenFifty and Beverage Media’s combined marketplaces will contain over 1,000 distributors, 120,000 buyers, and 1 million unique product listings across the country, with expected sales volume for distributors from on-and off-premise retailers approaching $1 billion in 2019, according to the companies. The partners say the alliance will “put a more robust set of sales and intelligence tools at distributors’ fingertips, from traditional price books to game-changing reporting analytics.” In the coming months, SevenFifty and Beverage Media plan to roll out…

1 min.
rndc, young’s market finalize joint venture

REPUBLIC NATIONAL DISTRIBUTING Co. (RNDC) and Young’s Market Company have formally closed their deal to form a new joint venture across all of Young’s 10 markets. Originally announced June 13, the RNDC-Young’s combination will create an $11 billion wholesale giant with a 32-market footprint and a 19% market share, second only to Southern Glazer’s 32% share. RNDC will lead operations in all 32 markets and be-come managing partner of the joint venture for the Young’s states, which will continue to be called Young’s Market Company. As a result of the new partnership, RNDC will now employ nearly 13,000 people. “The deal is final and we are eager to begin capitalizing on the strengths of both companies,” said RNDC president and CEO Tom Cole, who will hold the same title at the new…

1 min.
englishaustralian wines rebound in u.s.

AFTER WEATHERING CHALLENGING CONDITIONS IN THE U.S. IN RECENT YEARS, Australian wine exports to the U.S. grew by 2% to A$432 million ($305m) in the 12 months through June, with growth concentrated among premium and luxury brands. According to Aaron Ridgway, regional general manager for the Americas at Wine Australia, Cabernet Sauvignon, Chardonnay, and Grenache priced above $10 performed particularly well. “We know that dramatic change in the U.S. wine market is pretty difficult to achieve,” says Ridgway. “But consistent, steady change, with volume declining slightly and value increasing slightly, is absolutely consistent with the Wine Australia strategy. Australia’s over-representation at lower price points is starting to correct, and the more favorable price points are starting to increase.” In the year-to-date through June 16, Australian wines were roughly flat from a…