Shanken's Impact Newsletter May 15, 2017

TEQUILA IS IN THE MIDST OF A GRADUAL, yet unwavering evolution. Once known mainly as the province of Margaritas and shots, this quintessential Mexican spirit has been trending upward and expanding its modes of consumption. For years, mixto Tequilas (at least 51% agave and 49% neu-tral spirit) were the norm for the category. But over the past two decades, the presence of 100% agave Tequila has soared. Last year the tipping point arrived, as 100% agave’s share of the U.S. market finally passed the 50% threshold, according to Impact Databank, to account for 50.3% of total U.S. Tequila imports. “Exports of standard (mixto) Tequila to the U.S. are flat, while 100% agave Tequila is growing at nearly double-digits,” notes Luis Velasco Fernandez, president of the Ca-mara Nacional De La Industria…

SPIRITS GROWTH IN CONTROL STATES CONTINUED AT A BRISK PACE LAST YEAR AS SHIFTS in consumption patterns intensified toward Irish and American whiskies, Cognac and Te-quila. A major milestone was achieved as total spirits volume surpassed 50 million nine-liter cases for the first time in the 17 control states. Meanwhile, premiumization trends contin-ued as spirits’ dollar sales grew 5% and outpaced a 2.8% volume increase, according to NABCA/Impact Databank. “The trends show that in recent years people are willing to buy more and they are willing to buy higher up on the shelf,” says Andy Deloney, chair-man, Michigan Liquor Control Commission. Irish whiskey—led by Pernod Ricard’s Jameson—boasted the highest category growth rate in control states last year at 14.6%. Fueled by Hennessy VS, brandy/Cognac grew 9.4% and Tequila was up…

LONG KNOWN MAINLY AS THE BACKBONE OF THE Margarita cocktail and as a shot favorite, Tequila has now come into its own as an upscale sipping spirit alongside high-end Scotch, Bour-bon, Cognac and other prestigious categories. Last year marked a major milestone for Tequila, as the higher-qual-ity 100%-agave segment of the category accounted for more than half of overall U.S. volume for the first time. The dynamic growth of leading luxury Tequila brands like Patrón, Diageo’s Don Julio and Brown-Forman’s Herradura has played a large part in driving 100%-agave sales. The strong results—and enormous po-tential—at Tequila’s high end are drawing ambitious new entrants. Most recently, Moët Hennessy’s Volcan De Mi Tierra has joined the fray, competing alongside the above-mentioned stalwarts as well as fellow high-profile brands like Avión (Pernod Ricard)…

MOËT HENNESSY HAS INTRODUCED Volcan De Mi Tierra, its much-antici-pated super-premium Tequila brand, which has been in development for nearly three years. Volcan De Mi Tierra launches with two expressions: a Blanco ($40 a 750-ml.) and a Cristalino ($59.99). The initial rollout will be in the key urban markets of New York, Miami, Dallas, Austin, Los Angeles, San Francisco, Las Vegas and Chicago. The focus is on-premise, where the brand will seek to penetrate upscale, cocktail-driven restaurants and bars. It will also be sold in Mexico. Volcan De Mi Tierra is a joint ven-ture between Moët Hennessy and the Gallardo family, whose lineage in Mex-ico dates back to the 17th century. The Volcan De Mi Tierra name, which translates as “Land of the Volcano,” is inspired by the distillery’s location…

STRONG GROWTH IN THE SINGLE MALT SEGMENT DROVE SCOTCH WHISKY exports to gains in both volume and value in 2016, according to the Scotch Whisky Association (SWA), marking a solid performance after years of mixed results. Sin-gle malt Scotch shipments surpassed £1 billion ($1.3b) in value for the first time last year on 12% growth, with the segment now accounting for just over a quarter of the total value of global Scotch exports. The U.S. remains the leading market by value for Scotch whisky exports, with shipments up 14% to £865 million ($1.12b) last year. The SWA credited surging single malt Scotch sales, as well as growing consumer interest in premium prod-ucts overall, with driving U.S. value progress. The results were also aided by a weaker pound sterling, which slumped…

TREASURY WINE ESTATES HAS NAMED Robert Foye to succeed Bob Spooner at the head of its Americas unit. Foye, currently president and managing di-rector Asia and Europe, will assume the role of president, North America and LATAM, effective January 1, 2018. Additionally, Foye will become global COO, overseeing all of TWE’s major operating units. He will be based in Napa. Spooner will become general manager, global strategic initiatives, systems and processes, reporting di-rectly to TWE CEO Michael Clarke.Foye takes the helm of a Treasury Americas unit that has shown im-proved results the past two years. In the six months through December, vol-ume grew 13% to 7.9 million cases, with revenue up 26% to $433 million. Clarke recently told Impact that TWE is now seeing good momentum across the business, with…