Indholdsfortegnelse for January 1-15, 2019 i Shanken's Impact Newsletter

WITH THE WINE MARKET CONTINU-ing to premiumize, Terlato Wines is targeting the luxury on-premise segment with its growing Cru Collection portfolio. Spearheaded by vice chair-man John Terlato, the Cru Collection has a total of 24 producers and is focused on Burgundy, but also includes high-end offerings from Spain, Austria, and other regions. The portfolio finished last year at around 20,000 cases, with an average retail price of $100 a 750-ml. and most of the volume drawn from the on-trade. “We see continued movement to-ward premiumization, and we feel we’re well-positioned to take advantage of that trend,” Terlato says. At the high end of the market, Terlato says Cru wines like Ramonet, Roumier, Château de la Tour Clos-Vougeot, Niellon, Damoy, Groffier, and Château de Meursault are well-established among Burgundy consumers and…

FRATELLI BRANCA, THE PRODUCER of Fernet-Branca, Carpano Antica For-mula vermouth, and other brands, has created a New York-based company, Branca USA, to handle its U.S. busi-ness. Branca takes over its import rights from Infinium Spirits, which has im-ported its brands for the last 15 years. Branca USA CEO Steve Brecher previously held the same role at Infinium. Fratelli Branca CEO Patrick Piana credited Infinium with successfully establishing the company’s brands in the U.S. over the past decade. In addition to the new import unit, Fratelli Branca has tapped Young’s Market Co. to distribute its brands in Young’s 10-state, West Coast footprint. The flagship Fernet-Branca bitter is above 70,000 cases in the U.S. and is being promoted as a cocktail ingredi-ent to introduce more drinkers to its herbal flavor profile.…

In its most recent fiscal year, ended last June, Diageo saw its North America sales in-crease 4% to £4.1 billion ($5.2b), with its core U.S. spirits business advancing by 3%. Operating profit rose 2% to £1.9 billion ($2.4b). In recent years, Diageo’s net sales gains have been pro-pelled by ongoing growth across a range of brown spirits brands—including Crown Royal, Bulleit, and Johnnie Walker. In calendar 2018, the company saw those brands continue their prog-ress, according to Impact Databank estimates, with Crown Royal leading the charge with 4% growth to 6.3 million cases. In the waning days of the year, Diageo offered analysts an update on its North American business, discussing the outlook for its core portfolio and the spirits market as a whole. Following the call, Impact associate editor…

WHILE CONSUMER TRENDS HAVE SHOWN RISING interest in smaller brands across a host of product categories in re-cent years—as evidenced by the boom in craft distilling—the spirits industry continues to derive the lion’s share of its growth from its largest players. In 2018, the total U.S. spirits category advanced by 2%, adding about 4.3 million cases, according to Impact Databank. The top 25 spirits brands accounted for nearly 84% of that increase, under-scoring their appeal for consumers even as the craft segment continues to expand its share of the category. Standout brands like Jameson and Tito’s continue to churn out impressive gains, but they’re not the only ones providing momentum for the business. Longtime leaders like Crown Royal, Patrón, Jim Beam, and Ketel One all grew at rates of 4%…

ALTRIA, THE PARENT COMPANY OF Ste. Michelle Wine Estates and Marlboro, has entered the cannabis category with a $1.8 billion investment in Canadian producer Cronos Group. The investment will give Altria a 45% stake in Cronos at C$16.25 per share. Altria will name four directors to Cronos’ board, which will expand from five to seven members, and will have the right to increase its stake to 55% over the next four years at a price of C$19 per share. The initial purchase price represents a 16.2% premium compared to the cannabis company’s stock price at closing on December 6 on the Toronto Stock Exchange. Altria’s move will help bolster Cronos’ position in the market and give the startup access to regulatory, marketing, and government expertise as it navigates the fledgling…

AB INBEV HAS PARTNERED WITH Canadian cannabis producer Tilray to research and develop non-alcoholic cannabis drinks. The partnership, which is exclusive to Canada, is handled through AB InBev’s Labatt Brew-eries subsidiary and Tilray’s High Park Company (its subsidiary handling development, distribution, and mar-keting for its Canadian cannabis portfolio). Each company has committed to investing up to $50 million to develop beverages containing cannabis compounds THC and CBD. The two companies noted that the venture is currently in the research phase and any commercial launches remain a ways off.…

LAST MONTH, ACTIVIST INVESTMENT fund Elliott Management Corp. took aim at the management of Pernod Ricard, in which it holds a 2.5% stake, urging the world’s second-largest spirits marketer to take steps to shed non-core assets and seek new perspectives on the business with the goal of expanding operating margins. Pernod responded with a statement of its own, acknowledging discussions with Elliott but defending its recent performance. In its statement, Pernod noted that its organic sales and operating profit growth ramped up significantly in its fiscal year ended in June—to 6% and 6.3% respectively—with both measures above the medium-term guidance the company issued in 2015. The French drinks giant also highlighted the diversification of its portfolio, both in terms of categories and markets, adding that innovation has accounted for about…

AT MORE THAN 20 MILLION CASES, E.&J. Gallo’s Barefoot franchise trails only The Wine Group’s Franzia in the U.S. market in volume terms, according to Impact Databank, but Gallo believes the brand’s best days are still ahead. To maintain Barefoot’s momentum, the wine giant continues to innovate with the goal of extending into new consumption occasions. Among the offshoots driving gains for Barefoot, E.&J. Gallo CMO Steph-anie Gallo says that its canned Spritzers are rising fast. Retailing at $3 a 250-ml. can or $9 a four-pack, the canned Spritzer range has a low abv of 5.5% and comes in Moscato, Rosé, Summer Red, Crisp White, and Red Sangria. “Barefoot as a whole has maintained positive growth, due in large part to the explosive growth of Barefoot Spritzer in cans as…

DIAGEO HAS ANNOUNCED THAT IT WILL INVEST $130 MILLION OVER THREE years in a new Kentucky-based distillery. It will have an initial capacity of approxi-mately 10 million proof gallons. The new facility will consist of a distillery, dry house, and warehouse in Leba-non, Kentucky, with the capability to distill a variety of Diageo Bourbon and American whiskey brands. The site will supplement the company’s other Kentucky operations: Stitzel-Weller in Louisville, and The Bulleit Distilling Co. in Shelbyville. The latter opened in 2017 on a $115 million investment, and has a capacity of around 1 million cases. Diageo is investing in its Kentucky operations with a view toward ongoing growth in American whiskey. The company’s flagship Bulleit brand has continued to expand markedly, with its U.S. sales up 10% in the…

•DON SEBASTIANI & SONS has named Omar Percich as COO, replacing Tom Hawkins, who retired at the end of last year. Per-cich, formerly Don & Sons’ CFO, joined the company in 2017 after previously serving as CFO at Foley Family Wines. The Don Sebastiani & Sons portfolio includes wine brands B Side, Aqui-nas, and The Crusher, among others, as well as Contigo, El Fumador, and El Macho Tequilas. •Deutsch Family Wine & Spirits has named Scott Ehrlich as vice president of fine wine. Ehrlich comes to Deutsch Family from Constellation Brands, where he spent six years and most recently served as director of portfolio strategy. In his new role, Ehrlich will oversee Deutsch Family’s portfolio of high-potential priority and scalable brands, as well as its direct-to-consumer sales. Moving forward, he’ll…

•FOLIO FINE WINE PARTNERS HAS added Portugal’s Quinta do Crasto to its imported wine portfolio. Located in the Douro Valley, Quinta do Crasto offers a diverse lineup of still wines—ranging from Crasto DOC Red and DOC White ($20 a 750-ml.) to the luxury Vinha Maria Teresa ($240)—as well as a number of Port expressions. Folio, led by Michael Mondavi, will handle 15 of Quinta do Crasto’s wines in the U.S. These are the first Portuguese offerings in the importer’s portfolio, joining a range of brands spanning California, Italy, Spain, France, Argentina, and Austria. •7-ELEVEN IS JOINING THE CANNED wine craze with Roamer, a new private label brand. Roamer will come in Rosé and Chardonnay varieties priced at $5 a can. Canned wine sales have been expanding markedly in the U.S.,…