Shanken's Impact Newsletter May 15, 2021

DESPITE THE WIDESPREAD ON-PREMISE closures throughout the U.S. in 2020, gin marketers successfully pivoted and the category returned to growth, bumping up 2.5% to reach just under 9.3 million cases. The largest ten brands in the category did even better, growing by nearly 4% to over 7.4 million cases. Half of the top ten—including the four largest brands—posted growth ranging from 4% to over 10%. While the category is far from its mid-70s peak, when gin depleted nearly 20 million cases a year, producers are connecting with consumers and redefining what the U.S. gin market looks like, with a greater emphasis on the premium and the super-premium price tiers. Although growth was spread across price points, with both budget-friendly and more premium segments of the market enjoying gains, within price…

THE U.S. CONSUMER DEMAND FOR ROSÉ WINES HAS CONTINUED TO EXPAND LATELY despite some significant headwinds that faced both domestic and imported brands. Competition has ratcheted up as new brands continue to flood the market, each looking to carve out a niche in the exciting but very crowded category. And of course, the pandemic has upended the traditional selling channels. Marketers with on-premise-heavy brands swiftly switched course to focus on off-premise sales, heightening competition in a sector that is bursting at the seams. The result has been cognizance within that trade that, on one hand, consumer demand for rosé is stronger than ever and, on the other, the market is becoming overwhelmed with options. “We know that there is going to be consolidation of the number of rosés on the…

THERE’S BEEN NO SHORTAGE OF NEWS ACROSS THE drinks business lately, from mergers and acquisitions to celebrity brand rollouts to key executive changes, but one recent development in particular has the potential to change the calculus for the business and open up a huge new avenue for growth. Top-ranked wine and spirits wholesaler Southern Glazer’s announced in recent weeks that it has agreed to handle the CBD beverage port-folio of Constellation-backed cannabis producer Canopy Growth in the U.S., beginning with Quatreau, a new sparkling CBD offering launching across multiple states. Constellation has never been shy about placing big bets on what it believes is the next major growth opportunity, but it shocked many across the drinks business when it aligned with Canopy back in 2017. Three and a half years…

TREASURY WINE ESTATES HAS ANnounced an expansion of its partnership with second-ranked U.S. distributor Republic National Distributing Co. (RNDC). The two companies’ new long-term deal includes nine markets, including California, Texas, Louisiana, Oklahoma, Kentucky, Mississippi, Utah, Wyoming, and Nebraska. TWE and RNDC were already linked in Michigan, Georgia, and New Mexico. With the new agreement, RNDC will now handle more than one-third of Treasury’s U.S. business. Southern Glazer’s has previously served as TWE’s distributor in the affected markets, except for California, where the company was aligned with Bronco/Classic Wines. “With our divestiture of commercial wine brands, we decided to reevaluate our business needs to position our company for future growth,” said TWE Americas president Ben Dollard.…

AFTER A CHALLENGING YEAR WEATHering the worst of the Covid-19 pandemic, Rémy Cointreau posted organic sales up 1.8% to $1.26 billion (€1.04b) for its fiscal year ended March 2021. While its year-end results only showed moderate growth, the company saw organic growth jump 15.1% in the fourth quarter, pointing to a brighter future as more markets fully reopen and the pandemic wanes. Globally, the company reported organic growth of 3.7% for its Cognac division, to roughly $920 million (€763m), which the company attributed to its momentum in the U.S. and China.…

PROXIMO SPIRITS HAS ACQUIRED A majority stake in Proper No. Twelve Irish Whiskey via a new long-term deal worth up to $600 million for brand co-founders Conor McGregor, Audie Attar, and Ken Austin. That sum, according Austin, includes the $250 million the team has already earned in the brand’s first two years in business with Proximo, which previously held a 49% stake. Neither the length of the new agreement, nor Proximo’s new stake in the brand were disclosed, though Proximo CEO Mike Keyes told Impact that all three founders will retain an interest in the brand and will maintain active roles in the whiskey’s future. “When we started this business with Proximo, we basically laid out, I’ll call it certain hurdles, that would allow them to buy pieces of the…