TTB to Propose Adding American Single Malt Whiskey to Spirits Identities

Posted on July 28, 2022 by Joel Whitaker

Friday (7/29) morning’s Federal Register includes a Notice of Proposed Rulemaking to add American Single Malt Whiskey to the Standards of Identity for Distilled Spirits.  The proposal follows petitions and more than 200 comments from several distillers and the American Single Malt Whiskey Commission seeking such a proposal, TTB said.

“This is great news for U.S. distillers and consumers,” said Chris Swonger, president/CEO, Dstilled Spirits Council of the U.S. “We want to thank TTB for listening to the industry’s requests and we look forward to working with the Bureau to develop an official new category for American Single Malt Whisky.

“The formal establishment of standards of identity for American Single Malt Whisky is a clear recognition that this rapidly growing category is unique and deserves to be defined and protected as a distinctive product of the United States.

“Consumer fascination with American Single Malt Whisky is at an all‐time high and establishing a clear definition will drive innovation and help maintain the integrity of this category as more products enter the market.”

TTB noted that the distillers “stated that establishment of a standard of identity would benefit consumers, as it would provide a definition for the product, establish trust in the category, clarify label declarations, and equip consumers with the necessary information to make informed decisions so they can have confidence in the products they are choosing to buy in a similar way that Scotch whisky standards provide such information to American consumer. They also believe establishment of a standard of identity would strengthen the U.S. economy by increasing tax revenue related to the sale of American Single Malt Whiskey, and by creating jobs related to producing, distributing, and selling such a product and the ingredients used in this product.”

TTB requested comments on the proposed change.  It noted that any current Certificate of Label Approval that does not meet the standards proposed in the Federal Register notice would “by operation of regulation” be revoked.  It said it has searched its COLA database and does not believe any existing COLA would be affected, but specifically requested comments if any label would be.

TTB added that distillers currently using the designations “malt whisky,” “American malt whisky,” “whisky distilled from malt mash,” or “American whisky distilled from malt mash” on their labels could continue to do so.

Comments due: September 27. 

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Diageo Net Sales Jump 21.4%in fiscal 2022, Net Profit After Tax Rises 19.3%

Posted on July 28, 2022 by Joel Whitaker

The company noted the sales growth “reflects contined growth of the on-trade, resilient consumer demand in the off-trade and market shares gains and was underpinned by favorable industry share trends of spirits taking share of total bev/al and by premiumization.”  Earnings per share rose 23.2%.

In North America, reported net sales grew 17% (organic, 14%), largely driven by U.S. spirits, the company said. U.S. spirits net sales grew 17%, Diageo said, reflecting recovery on the on-trade channel and resilient consumer demand in the off-trade channel, spirits taking share of total bev/al, and replenishment of stock levels by distributors.  U.S. Spirits shipments were ahead of depletions, the company added.

U.S. spirits growth was driven primarily by tequila, up 57%, as well as double-digit growth in scotch and U.S. whiskey and growth in Canadian whisky.  “This more than offset declines in Baileys and in rum. ”

Diageo Beer Co. net sales rose 2%, reflecting increased sales of Guinness, which were driven by on-premise recovery and ready-to-drink recovery, partially offset by a decline in flavored malt beverages.

CEO Ivan Menezes said he was “very pleased with our fiscal 22 results. We delivered double-digit organic net sales growth across all regions and we gained or held off-trade market share in over 85%(1) of our total net sales value in measured markets. We expanded operating margin while increasing marketing investment ahead of net sales growth and we used our strong cash generation to invest in long-term growth. I am very proud of what my 28,000 colleagues have achieved through their energy and creativity.

“In a year of significant global supply chain disruption, our double-digit volume growth demonstrates the tremendous agility and resourcefulness of our teams. Our net sales growth was across categories. We benefitted from the on-trade recovery, continued global premiumization trends, with our super-premium-plus brands up 31%, and from price increases across our regions. I am particularly proud of the performance of Johnnie Walker, which delivered double-digit growth across all regions to surpass 21 million cases globally. This fantastic milestone exemplifies our world-class brand-building and execution capabilities.

“Looking ahead to fiscal 23, we expect the operating environment to be challenging, with ongoing volatility related to Covid-19, significant cost inflation, a potential weakening of consumer spending power and global geopolitical and macroeconomic uncertainty. Notwithstanding these factors, I am confident in the resilience of our business and our ability to navigate these headwinds.

“We believe we have an advantaged portfolio with extraordinary brands across geographies, categories and price points. And we continue to actively shape our portfolio to fast-growing categories through innovation and acquisitions. We are staying close to our consumers and our digital tools and data capabilities enable us to quickly understand trends and execute with precision.

“Total beverage alcohol is an attractive sector with strong fundamentals and we are making good progress towards our ambition of delivering a 50% increase in our value share to 6% by 2030. Despite the challenging environment, we are executing our strategic priorities, including our ambitious 10-year sustainability plan. I am confident that we are well-positioned to deliver our medium-term guidance for fiscal 23 to fiscal 25 of organic net sales growth consistently in the range of 5% to 7% and organic operating profit growth sustainably in the range of 6% to 9%.”

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AB-InBev 2d Quarter Sales Up 11.3%, Volume Up 3.4%, Net Falls 16.6%

Posted on July 28, 2022 by Joel Whitaker

Before you read this, I suggest you take a break and enjoy this song from the 1958 film version of the 1949 Broadway hit, South Pacific.

Anheuser-Busch InBev reports what at first glance seems positive earnings.  Total revenue grew 11.3% in the fiscal first half, with its global brands growing 11.3%, and total volume was up 3.4%.  By any definition that’s good news.  But ABI also reports “normalized EBITDA” was up 7.2%, and that’s the rub.  EBITDA by definition is before interest and taxes, which are real, cash charges, and depreciation with is a non-cash bookkeeping entry.  Adjust for those three minor details and it turns out that net profit falls 16.6%.

Trumpeting EBITDA when net profit under GAAP falls reminds us of that old line, “figures don’t lie buy liars figure.”  Except that accounting hawks at places like the Securities & Exchange Commission won’t let a firm lie, so ABI calculates percentage changes for things like revenue and “normalized” EBITDA, but not for net profit after tax nor for earnings per share.

Still, ABI has a positive story to tell.  In the second quarter, combined revenue of its global brands (Budweiser, Stella Artiois, and Corona) rose 9.7 % outside their home markets, total beer volume grew 3.4% with own-beer volume up 2.7%.   The company achieved volume growth in more than 60% of its markets, Stella Artois grew 7.75 outside its home market, its above-core portfolio gew 12% in the second quarter.

In the U.S., revenue grew 2.7%, and revenue per hectoliter grew 5.5%.  Sales to wholesalers were down 2.7% as sales to retailers eased 3.4%.

 

 

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A-B to Be Official Beer Sponsor in Miller’s Hometown Stadium

Posted on July 28, 2022 by Joel Whitaker

Wouldn’t you love to be the fly of a boardroom at times?  I would.

For instance, it would have been interesting to hear the discussion that led to Anheuser-Busch being the official beer sponsor at Fiserv Forum.  That’s where the Milwaukee Bucks play.  In Milwaukee, the beer town.  The hometown of Miller Brewing Co., whose headquarters is at 3939 W. Highland Blvd.

But of course, Miller is owned by Molson Coors, and a few years ago that company moved to Chicago.  So when the Molson Coors brass goes to a ballgame, they won’t be humiliated by seeing a Budweiser bowtie atop Fiserv arena.  But their Milwaukee area employees will.

Not only did A-B get exclusive beer and hard seltzer sponsorship rights, but it also bought non-exclusive sponsorship in the ready-to-drink canned cocktails category.

As for Molson Coors, having lost the sponsorship rights to A-B in Fiserv Arena, it issued a statement asserting, “Milwaukee is more than a sponsorship to us, it’s our home. And whether it’s our county parks or community organizations across the Milwaukee area, or the Brewers, the Packers, and Summerfest, we will continue investing here in our hometown. We wish the team success, and we will continue finding unique ways to invest in this city.”

Matt Green, who was visiting Milwaukee from St. Louis, the hometown of Anheuser-Busch, told WISN-TV he  thinks such a change seems wrong. “Miller is iconic.  It goes with the Bucks, goes with the Brewers. So, I’d say keep it Miller. It’s like naming Busch Stadium, Miller Park. You can’t really do that. Can you?”

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Marie Brizard 2d Quarter Revenue Rose 7.5%

Posted on July 28, 2022 by Joel Whitaker

Marie Brizard Wine & Spirits reports second quarter revenue rose 7.5%, largely a result of its international cluster which grew 13.2% vs. its French cluster which inched up 2.5% from a year earlier.

The Group’s main brands posted a resilient performance in the first half of 2022, particularly Marie Brizard and San José. Other brands including Sobieski posted growth in the on-trade business, while off-trade sales dipped slightly in the second quarter. Despite a general slowdown in the under-12-year blended whisky market (down 6.7% in the first half), William Peel recorded a small decline in sales in the first half of 2022 compared to 2021, thanks to a new listing obtained in the second half of 2021 enabling it to gain market share.

The first half upswing in France cluster sales was impacted by severe disruption in raw material supply chains since the beginning of March, notably due to the Russia-Ukraine conflict and soaring raw material costs, which have particularly affected the glassmaking industry since early April. The Group is dealing with this situation by adopting allocation measures per brand based on available volumes. Furthermore, sales pricing policy adjustments across all distribution channels have been and will continue to be necessary in order to adapt to this new volatile environment.

International cluster

The International cluster posted first half revenues  up 9.2% from first half 2021 at constant exchange rates.

US revenues for the first half of 2022 were down versus 2021 due to the continuing decline in Sobieski sales due to aggressive promotional strategies by competitors in the vodka segment and ongoing pressure on sea transport capacity.

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Moet & Chandon Retains Rank as World’s Most Valuable Wine Brand

Posted on July 28, 2022 by Joel Whitaker

Moët & Chandon (brand value up 15% to $1.4 billion) retains its top position as the most valuable brand in the annual ranking of the world’s most valuable brands by the leading brand valuation consultancy, Brand Finance. The luxury champagne brand owned by fashion house LVMH continues to dominate the sector by increasing its network of products and introducing new product options for its growing consumer base.

Every year, leading brand valuation consultancy Brand Finance puts 5,000 of the world’s biggest brands to the test, and publishes around 100 reports, ranking brands across all sectors and countries. The world’s top 50 most valuable and strongest wine and champagne brands are included in the annual Brand Finance Wine and Champagne 10 ranking.

With pandemic travel restrictions ending, there has been a resurgence of in-person celebrations across the world, with delayed weddings, delayed family reunions, and delayed tourism creating celebratory moments for consumers globally. With Moët & Chandon building its distribution network, more customers are choosing to celebrate with their products. The brand has also increased its product offerings with new lines of wine and spirits to meet consumer demand. For instance, the brand recently introduced a new line of rosé to celebrate the Queen’s platinum jubilee over the recent four-day long weekend in the United Kingdom.

Brand Finance ranks the 10 most valuable wine brands as:

  1. Moet & Chandon
  2. Vueve Cliquot
  3. Chandon
  4. Changyou
  5. Dom Perignon
  6. Lindemans
  7. Barefoot
  8. Martini
  9. Concha y Toro
  10. Jacob’s Creek

In addition to brand value, Brand Finance determines the relative strength of brands through a balanced scorecard of metrics evaluating marketing investment, stakeholder equity, and business performance. Compliant with ISO 20671, Brand Finance’s assessment of stakeholder equity incorporates original market research data from over 100,000 respondents in more than 35 countries and across nearly 30 sectors. In addition to being the most valuable brand in the ranking, Moët & Chandon (brand value up 15% to US$1.4 billion) is also the strongest brand in the ranking with a Brand Strength Index (BSI) score of 82.1 out of 100 and a corresponding brand rating of AAA-.

Moët & Chandon is strengthening its branding with strong retail partnerships with luxury brands including Harrods and Selfridges. Moët & Chandon has launched a permanent champagne bar in Harrods’s food hall, the first of its kind. In addition to high-end retail partners, the brand also partners with online grocery stores such as Ocado and Whole Foods to ensure availability and a strong distribution network across its target markets.

Here are the 10 strongest wine brands, according to Brand Finance:

  1. Moet & Chandon
  2. Jacob’s Creek
  3. Vuve Cicquot
  4. Chandon
  5. Lindemans
  6. Dom Perignon
  7. Changyu
  8. G.H. Mumm
  9. Barefoot
  10. Martini

Lindeman’s leads the 10 fastest-growing wine brands this year, according to Brand Finance.  Lindeman’s (brand value up 81% to US$664 million) is the fastest-growing brand in the champagne and wine ranking. The brand climbed two ranks from last year and made it into the top ten most valuable brands in this year’s ranking. Earlier this year, the Australian wine brand celebrated reaching its goal of 100% carbon neutrality across its wine portfolio. The brand is also working towards transitioning to 100% renewable energy by 2024 to reduce its carbon footprint and contribute to a sustainable future. To achieve and promote its sustainable goals, Lindeman’s is partnering with organisations such as the Carbon Trust and Ecologi.

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