Shanken's Impact Newsletter May 15, 2022

OVERALL, GIN IN THE U.S. STRUGGLED IN 2021, with the category down 240,000 cases to 9.18 million, according to Impact Databank. The top 10 brands—making up roughly 78% of the category—faced challenging conditions, with only two of the 10 seeing growth last year. Once again, the pockets of growth, concentrated in the higher-end of the category, weren’t enough to offset the continued decline of more affordable offerings. While the category overall faces headwinds, imported gins and brands priced above $25 a 750-ml. are performing well, and carving out a significant niche in the market. These gins are made with a more bespoke approach and use a wider variety of botanicals to create more unique (and often less traditionally junipery) spirits that have found their audiences, and are showing a way…

AMID A PROLIFERATION OF ROSÉ WINES IN THE U.S. MARKET, THE CATEGORY CONTINued its steady climb last year across both imported and domestic offerings. Rosés from France led the other segments in volume terms, with a handful of French brands posting doubledigit U.S. depletion growth in 2021. The market’s leading French rosé brands collectively grew 5.2% to more than 2.5 million 9-liter cases in the U.S. last year, which is double 2017’s collective volume of about 1.2 million cases, according to IMPACT DATABANK. Leading French rosé brand volumes have experienced a steady increase year-over-year, but 2021’s collective growth marks a slight slowdown from recent years, when a 20%-30% pace was recorded. But as the overall U.S. wine market gravitates toward higher price points and offerings with luxury lifestyle appeal, leading…

WHILE THE ON-PREMISE MARKET IN THE U.S. REMAINS thousands of accounts short of where it was when the pandemic hit, recent months have seen strong progress for restaurants and bars, especially in states that still had Covid restrictions in place at this time last year. According to CGA Strategy, the on-premise market in the U.S. is up 17% compared with 2021, with New York velocity up 39%, Illinois up 34%, and California up 26% in recent weeks against their previous-year performances. The stronger on-premise environment has been a boon for those hospitality-centered drinks brands that were forced to pivot to retail during the worst of the pandemic, as well as entire categories, like upscale gin and aperitifs, which are now enjoying much better operating conditions. As a whole, the gin…

HEAVEN HILL BRANDS HAS ANnounced plans to build a new distillery in Bardstown, Kentucky, on a $135 million investment. Expected to open by 2024, initial production is slated for 10 million proof gallons a year, or 150,000 barrels, with capacity to ramp up to producing 30 million proof gallons, or 450,000 barrels. The new distillery will sit on a 61-acre site at 1015 Old Bloomfield Pike, off KY 245. It marks the company’s return to distilling in Bardstown following a 1996 fire when Heaven Hill lost its onsite distillery, seven rickhouses, and almost 100,000 barrels of whiskey. “Our new distillery will honor our long-time Bardstown roots while applying state-of-the-art equipment and processes to produce the highest quality American whiskey and build upon our meaningful partnership with Bardstown and the Commonwealth…

WILLIAM GRANT & SONS RECENTLY launched its new ready-to-serve cocktail line, Batch & Bottle, nationally. The launch drops the company into one of the hottest categories in the U.S. and comes amid a period of growth for William Grant & Sons, whose total portfolio in the U.S. grew by 6.5% to over 3.2 million cases last year, according to IMPACT DATABANK. “Capitalizing on the trends over the last couple of years, we’ve had very strong business growth,” Paul Basford, U.S. president and managing director at William Grant & Sons, told Impact. “There are very nice trends from 2021 carrying into 2022. I think it’s a very encouraging Q1 start to the business.” He pointed to Hendrick’s and Tullamore Dew as two brands performing especially well for WG&S so far this…

SCOTCH WHISKY PLAYER COMPASS Box has announced a new majority investment from London-based firm Caelum Capital, and named Caelum advisor Maurice Doyle as CEO. Doyle, who previously held senior executive roles at Bacardi and William Grant & Sons, will lead Compass Box alongside founder and whiskymaker John Glaser. Financials on the Caelum deal weren’t disclosed, but the firm’s strategy calls for making equity investments of between $50 million and $200 million. Caelum founder and managing partner Manish Rungta was previously part of the global M&A team at Diageo.…