Shanken's Impact Newsletter February 1-15, 2018

ALTHOUGH THE TEQUILA CATEGORY HAS seen its share of acquisition activity lately—with Diageo buying Casamigos last year and Pernod swooping for full control of Avión in the early days of 2018—the biggest move was yet to come. Last month, Bacardi announced that it has agreed to acquire 100% of Patrón Spirits in a transaction valuing the luxury Tequila giant at $5.1 billion. The deal, which is expected to close before the end of June, comes a decade after Bacardi first took a 30% stake in Patrón for an undisclosed sum. Adding the Patrón lineup is a game-changer for Bacardi, expanding the company’s super-premium spirits portfolio by 2.5 million cases in the U.S. market. The brand ranks among just six spirits labels with U.S. retail sales above $1 billion, along with…

THE BOURBON PHENOMENON CONTINUES TO EXPAND AS CONSUMERS AROUND THE globe propel the category to new heights. Last year, global Bourbon volume grew by 5.5% to 36.7 million nine-liter cases, representing an increase of 12 million cases since 2010. Although the pace of growth slowed slightly from the 6% gain posted in 2016, Bourbon continues to grow at a robust rate. The U.S., which consumes roughly 60% of Bourbon’s total volume, advanced by 3.5% to 21.1 million cases last year, according to IMPACT DATABANK. In the U.S., growth has been widespread for the top players. Within the top 25 brands, only eight labels posted losses last year and none declined by more than 4.4%. The market continues its trend toward premiumization, with most of the declining brands being at the…

LESS THAN THREE MONTHS INTO THE TENURE OF ITS new CEO, Mahesh Madhavan, Bacardi Ltd. has made one of the most transformative acquisitions in its long and storied history. With last month’s multi-billion dollar deal for full control of Patrón Spirits, in which it already held a 30% stake, the world’s largest privately held spirits company took a huge leap forward in the U.S. market, where it now ranks second behind only Diageo in terms of retail sales at roughly $4.5 billion. While Bacardi was already benefiting from Patrón’s dominant position in luxury Tequila prior to the deal due to its minority stake, acquiring 100% of one of the spirits market’s most revered super-premium brands is a clear game-changer. Bacardi now controls about 70% of the $40-and-above Tequila segment in…

TREASURY WINE ESTATES HAS RE-vealed significant changes to its distributor lineup, parting with Southern Glazer’s in a number of key markets. Among the changes, Treasury is switching to a direct sales and distribution model in the California and Washington markets for its largest retail partners. For the on-premise and smaller retailers, TWE has appointed Classic Wines of California and Vehrs Distributing in Washington to handle its brands. In Florida, TWE is implementing a new hybrid distribution model where it will directly manage relationships with its largest retail partners in collaboration with Breakthru Beverage. Breakthru will operate a full service distribution model for the remainder of the market, including the on-premise channel, and independent and small chain retailers. In a number of other states, TWE has also appointed new full service…

ANCHOR DISTILLING HAS BEEN RE-named Hotaling & Co., assuming the moniker of one of San Francisco’s legendary liquor merchants of the 19th century. The change stems from Anchor Brewing’s $85-million sale to Sapporo last year, which included rights to the Anchor trademark. The renamed Hotaling & Co. remains jointly owned by Tony Foglio and Berry Bros. & Rudd. Hotaling & Co. continues to be led by president and CEO Dennis Carr, who says the company finished 2017 at about 190,000 cases, with Hine Cognac, Luxardo liqueur, and Old Potrero, Nikka and Kavalan whiskies driving gains. Hotaling is on the hunt for a site for a new distillery and headquarters in San Francisco and is in talks regarding a few different potential properties. “Our vision is to stay at roughly our…

WHYTE & MACKAY IS BEST KNOWN FOR UPSCALE SINGLE MALTS THE DALMORE ($65-$230) and Jura ($55), as well as Shackleton ($35), its new blended malt. Now, in partnership with U.S. importer E.&J. Gallo, W&M is focusing on the John Barr Reserve Blend. In 2016, John Barr ($25) got a makeover, with a new package and reworked liquid, matured in ex-Bourbon barrels and finished in Sherry butts. “This whisky is crafted along the lines of the original blend but takes con-temporary tastes into account,” says W&M VP, Americas, Chris Watt. W&M is looking for John Barr to pass 150,000 cases in the coming years, which would rank it just outside the top five blends in the U.S., and third among standard brands.…