News & Politics
Shanken's Impact Newsletter

Shanken's Impact Newsletter October 1, 2017

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.
hennessy leads the charge as cognac’s advance continues

THE GLOBAL COGNAC MARKET CONTIN-ues to surge, propelled by substantial gains in the U.S. market and China’s ongoing rebound. The United States remains by far the world’s largest market for Cognac, im-porting nearly three times as much as second-ranked Singapore, which re-exports significant amounts to China. In 2016, Cognac shipments to the U.S. grew by 14.9% to 5.8 million nine-liter cases. That boost was driven by double-digit growth for market leader Hennessy, single-digit prog-ress for top competitors Rémy Martin, Courvoisier and Martell, and an impressive performance by relative newcomer d’Ussé. Depletions rose even faster than shipments last year, increasing by 17% to 5.4 million cases. Since 2014, U.S. Cognac depletions have risen by around 1.4 million cases, while value has jumped by a remarkable €412 million ($495.4m). With growth in six…

10 min.
premiumization drives value growth

WHILE SCOTCH WHISKY’S GLOBAL PERFORMANCE HAS LARGELY LAGGED BEHIND OTHER whiskies such as Irish and Bourbon over the past few years amid the global brown spirits boom, the category took a step forward last year and continues to see a positive outlook thus far in 2017. Scotch shipments faltered in 2014 and 2015, shrinking 3.1% and 2.5% by volume, respectively, but last year they posted a 4.7% volume increase to more than 101 million nine-liter cases worldwide, according to Impact Databank. Much of Scotch’s re-cent progress has come from its higher-end segment, leading export value to surpass £4 bil-lion ($5.2b) on 4% growth in 2016, marking the first year since 2011 that the category has recorded gains in both volume and value. “As the consumer trend toward quality becomes more ingrained,…

1 min.
brown spirits’ bounty

WITH SO MUCH ATTENTION FOCUSED ON THE FAST-growing American whiskey category, it’s easy to overlook the stellar results of fellow brown spirits segments like Cognac and Scotch whisky. But if there’s a spirits category that can rival the current en-thusiasm for American whiskey, Cognac might just be it. Indeed, driven by the remarkable growth of Hennessy, Cognac ship-ments to the U.S. vaulted 15% to 5.8 million cases last year. That capped a six-year period in which the value of Cognac entering the U.S. more than doubled to €1.1 billion ($1.3b). While Hennessy is clearly dominant, Cognac’s ascent hasn’t been a one-brand phe-nomenon. Each of the top six brands in the U.S. posted solid growth last year, with white spirits consumers increasingly migrating to the category. Progress is also afoot in Scotch whisky,…

1 min.
schaus named moët hennessy ceo

MOËT HENNESSY’S CHRISTOPHE Navarre is stepping down from his role as CEO, departing the drinks company to focus full-time on his investment fund Neptune International. Navarre joined LVMH in 1997 as president and CEO of JAS Hennessy & Co., and has served as CEO of LVMH’s Moët Hennessy unit—whose portfolio in-cludes the Moët & Chandon, Dom Pérignon and Veuve Clicquot Cham-pagne brands, Hennessy Cognac and Glenmorangie and Ardbeg Scotch whiskies, among other wines and spirits—since 2001. Hennessy, in par-ticular, has enjoyed an impressive rise during Navarre’s tenure, with the brand surging 22% to 3.7 million cases in the U.S. last year, accounting for roughly two-thirds of the overall Cognac mar-ket. Overall, Moët Hennessy’s sales jumped 10% to €2.3 billion ($2.7b) in the first half of this year, while profit from…

2 min.
smwe’s innovation efforts pay off

WASHINGTON STATE’S TOP WINE PLAYER, STE. MICHELLE WINE ESTATES HAS posted impressive growth recently, led by its flagship Chateau Ste. Michelle fran-chise, which sells more than 3.4 million cases annually. The group’s top brands also include 14 Hands and Columbia Crest, with volumes of approximately 2 mil-lion cases and 1.2 million cases, respectively. But while those labels account for most of Ste. Michelle’s sales, the company has also been active on the innovation front, with several recent launches enjoying fast starts. Introduced nationwide in April of last year, Intrinsic is an upscale Cabernet Sauvignon sourced from Washington’s Columbia Valley notable for its extended maceration process. The single-SKU offering—whose 2014 vintage ranked 32nd among Wine Spectator’s Top 100 for 2016—retails at around $22 a 750-ml. Intrinsic sold 57,000 cases in its debut…

1 min.
brown-forman opens new slane distillery

BROWN-FORMAN AND ITS PARTNERS, the Conyngham family, are set to be-gin production at their new $50 mil-lion, 600,000-case Irish whiskey dis-tillery early this fall in County Meath, 30 miles north of Dublin. The new facility, located on the 1,500-acre Slane Castle Estate, includes a visitor experi-ence that features a tasting area, a Heritage Room, a retail store offering whiskey memorabilia, a café, and two bars serving cocktails featuring local ingredients. Brown-Forman launched the Slane Irish whiskey brand in the U.S. this summer. Slane’s inaugural 40%-abv expression is made with single malt and single grain whiskies sourced from un-disclosed Irish distilleries. The whiskies are divided and matured in three dif-ferent cask types—virgin oak, seasoned oak and Oloroso Sherry—before blending. The new Slane distillery will make whiskey under the same “triple casked” process…