Shanken's Impact Newsletter September 1-15, 2018

WITH CONSUMERS INCREASINGLY DRINKing across categories and drawing from a diverse repertoire of brands, Impact’s “Hot Prospects” showcase some of the rising stars that are capturing their attention. This year, 74 brands earned Hot Prospect honors across the spirits, domestic wine, and imported wine categories. All 74 brands have met the lofty criteria necessary for Hot Prospect recognition. All honorees across both wine and spirits must have had depletions of 50,000-200,000 cases in 2017, either as new products or existing brands that achieved at least 15% growth over the previous year while also enjoying positive growth in 2015 and 2016. The Hot Prospects spirits roster continues to be led by American whiskey, which claims a total of 10 entrants this year. Following close on whiskey’s heels is vodka, which despite…

GROWTH SLOWED SLIGHTLY FOR THE TOP 10 SPIRITS MARKETERS WORLDWIDE IN 2017, but they still posted a collective increase of 0.4% to 595 million cases, according to IMPACT DATABANK, up from 589 million cases two years earlier. With that performance, the top 10 players boosted their share of the global spirits business to 48.8%, continuing to expand their presence even amid a consumer shift to craft labels and away from mainstream brands—particularly in the U.S. market. Among the main spirits categories driving growth, Bourbon (+6.2%), Irish whiskey (+10.7%), and Japanese (+7.6%) whisky all posted impressive progress in the global market last year, as did Cognac (+6.2%) and gin (+4.4%). The world’s top 10 spirits marketers are responsible for a large share of that growth, with brands like Bulleit, Woodford Reserve,…

IT’S BEEN SAID THAT THE FUTURE IS MORE IMPORTANT than the past. If that maxim holds true, this issue contains some very important information indeed. Impact’s annual “Hot Prospects” list represents the future stars of the drinks industry, highlighting the wine and spirits brands that are achieving dynamic growth from small bases, and positioning themselves to make a significant impact in the market in the years ahead. This year’s Hot Prospects roster counts 74 brands, each of which is striking a chord with consumers. In spirits, the list is weighted toward the thriving brown spirits category, with American whiskey accounting for nearly one-third of the winners. Among domestic wines, premium-plus California bottlings continue to gain favor, while rosés and sparkling wines are the dominant styles on the imported wine list.…

STE. MICHELLE WINE ESTATES PRESIdent and CEO Ted Baseler will retire October 1 after a 17-year tenure leading the Washington-based wine giant. Baseler will be succeeded by Jim Mortensen, a veteran of Philip Morris International. Baseler is credited with overseeing a marked expansion of the Ste. Michelle business, including a number of strategic acquisitions, capital investments, and the development of an imported wines division which now includes Marchesi Antinori (Italy), Miguel Torres (Spain, Chile), Champagne Nicolas Feuillatte (France), and Villa Maria (New Zealand). He also orchestrated SMWE’s acquisition of Stag’s Leap Wine Cellars with the Antinori family in 2007, and led a commitment to wine quality across the company, earning accolades including Wine Spectator’s Wine of the Year for Columbia Crest 2005 Reserve Cabernet Sauvignon in 2009. As president and…

CONSTELLATION BRANDS IS MAKING a major bet on the future of the cannabis category, announcing a $4 billion investment in Canada-based producer Canopy Growth, in which it already held a partial stake. Constellation, which took an initial 9.9% interest in Canopy for $191 million last fall, is acquiring 104.5 million shares directly from Canopy Growth to take its stake to 38%. Constellation is acquiring the new shares at a price of C$48.60 ($38.08) per share, a 51.2% premium to the closing price on August 14. In addition, Constellation has acquired warrants which, if exercised, would take its stake to above 50%. Constellation will gain four seats on Canopy’s board as part of the deal. Constellation says the move will allow Canopy to bolster its leadership position in the global cannabis…

AMERICAN WHISKIES AND TEQUILA DROVE GROWTH FOR BEAM SUNTORY IN the U.S. in the six months through June, representing the first half of the company’s fiscal year. In the U.S., Beam Suntory’s sales were up by mid-single-digits on an organic basis in the first half, with Bourbons like Jim Beam, Maker’s Mark, and Basil Hayden’s leading the way. Sauza Tequila, in particular its higher-priced Hornitos offering, also contributed to the sales rise. In control states, Beam Suntory’s volume was up 4.9% overall in the six months through June, with growth led by Jim Beam (+7.2%), Maker’s Mark (+9.5%), and Sauza (+11%). Among other key brands in control states, DeKuyper liqueurs were down 5.5%, but Pinnacle vodka—which had been in decline—rebounded with 2.9% progress. According to IMPACT DATABANK, Jim Beam was…