Constellation Fully Acquires Effen Vodka
In Constellation’s third quarter conference call today, the company said it has acquired the remaining 50% equity stake in its Planet 10 Spirits j-v. Terms of the transaction were not disclosed. Effen vodka is Planet 10’s leading brand and increased 55% in volume during the 52-week period, according to IRI data.
SPIRITS. Speaking of spirits, Svedka reportedly saw a shipment growth of 50% in the third quarter. Perhaps all that “risqué” marketing is working after all. Besides Svedka, spirits growth was driven by premium brands including Black Velvet, Ridgemont Reserve Bourbon and 99 Schnapps family.
Total spirits net sales increased 31% for the quarter, primarily due to the March 2007 acquisition of Svedka Vodka, with 12% growth in organic net sales reflecting higher average selling prices and volume gains.
WINE. The Beam Global acquisition has certainly been helpful in boistering Constellation’s premium and super-premium wine portfolio. The star of the portfolio, Clos du Bois, has been growing at a volume rate of 18% in the last 52 weeks period (based on IRI data), noted Chief Rob Sands.
"To fully leverage the acquisition we will realign the sales and marketing organization supporting our U.S. wine business. The sales and marketing teams will focus on specific consumer segments that include luxury/fine wine, premium wine and value/specialty wine. In connection with these actions, we are also rationalizing our U.S. wine product portfolio, primarily related to our value products, which we believe will generate efficiencies and enhance our focus on higher growth, higher margin brands," he continued.
As you know, premiumization is a big part of Constellation’s strategy. The company said “positive momentum” continues in the trading up arena, helped by Robert Mondavi, Estancia, Black Stone, Kim Crawford, and Simi just to name a few.
North America branded wine sales rose 5%, reflecting sold growth in US. The US wine business returned to targeted wine sales growth levels during the quarter as the distributor inventory reduction initiative was essentially completed in the 2nd quarter. Now that the reductions are done, Constellation expects a lower growth rate in Q-4 as they return to the lower levels established at the end of the second quarter.
AUSTRALIAN DROUGHT. The company continues to face competitive market issues in the UK and Australia. Although bulk wine is shrinking in the UK, the country’s market pricing has not changed significantly as major grocery chains continue to drive competition. Rob said that drought conditions are expected to effect Australian wine but they’re not sure how much.
“If you look at Australia it’s an over-supply situation turning into a balanced situation potentially turning into under-supply but we don’t think those trends will be unfavorable to us.”
“Pricing is going to have to be taken,” continued Rob. “In our industry and other industries suppliers are indicating pretty much across all consumer goods durables that they’re going to take pricing. I would say that as a consequence of that, we’re hopeful the environment will be positive in that regard. Will the retailers like it? No, they’re saying they don’t like it in the UK...they will try to do whatever they can to avoid it or offset it.”
ABSOLUT. Rob said “it’s possible” that Constellation could benefit for the eventual Absolut acquisition. Although the company doesn’t plan to bid on the Swedish vodka, it might try to acquire brands for sale by companies that are trying to make room for Absolut.
SOUTHERN WINE & SPIRITS ENTERS DELAWARE
Southern Wine & Spirits has acquired the former Delaware Importers LLC of New Castle,
Delaware to form Southern Wine & Spirits (SWS) of Delaware. Delaware Importers was a j-v between Ed Stegemeier and Roger Hart, the company's founders, and Eber Bros. Wine & Spirits Corp. of Rochester, New York.
Steven Dick, executive VP, GM of SWS of Pennsylvania has been promoted to executive VP, GM of SWS of Delaware, effective January 1. Meanwhile, Brad Waxman will fill the title of VP, GM of SWS Pennsylvania.
In another transaction, SWS has also bought Postiy Wine & Spirits of Ohio, which is based in Columbus. As you’ll recall, SWS entered Ohio earlier last year with the acquisition of Paramount Distillers Brokerage operations. SWS Robinson Cooper has been appointed VP, GM of SWS Ohio. The appointment is also effective January 1. Rob comes to SWS from Beam Global.
INDUSTRY TAKES SIDES OVER WINE.COM
The incident between Wine.com and other wine retailers is really heating up, and it seems that everyone has an opinion on the issue. As you’d expect, a lot of people in the wine industry, excluding wholesalers, are entirely in opposition against what they consider a sting operation by Wine.com to rat out competition. Wine.com or friends of the company supposedly ordered wine from competitors illegally and then turned them in to authorities. Of course, there are always (at least) two sides to every situation, and the WSWA applauds Wine.com for exposing “unregulated, illegal interstate shipments of alcohol to consumers.”
As you’ll recall, Wine.com ceo Richard Bergsund Wine.Com is sending letters to state government agencies telling them the names of competitors who they claim are illegally shipping wine to consumers in states that outlaw such practices. Furthermore, Bergsund is requesting that the state take legal action on those companies. For some more background on the issue, click here.
Vinography posted an interesting editorial on the issue. Here’s an excerpt:
“The wine industry has a bit of a dirty little secret -- people break the rules all the time. Wineries and retailers (especially retailers) and the consumers that buy from them have all sorts of ways of getting around the shipping regulations.”
“Those who don't want to break the rules, however, must be resigned to opening operations (distribution centers, offices, etc.) in every restrictive state in order to be able to sell wine to consumers in that state legally.”
“The wine industry, while competitive, is generally marked by a real collegiality, and it's despicable to see such shallow, backstabbing behavior on the part of Wine.Com. Shame on them. It's mean spirited from a competitive standpoint, and it has the indirect effect of screwing ordinary consumers.”
To read the whole post, click here.
WSD BRIEFS:
WINDSOR SONOMA, a winery created by Pat Roney and Leslie Rudd, is scheduled to release its first vintages of sauvignon blanc, chardonnay, and pinot noir in January, while final details are completed to build their new 6,700 sq. ft. boutique facility in Healdsburg. Construction is expected to be finished by harvest of 2009.
GLAZER’S of Texas has appointed James LaBarba as VP Wines, the company said yesterday. LaBarba will be responsible for all sales and marketing activities on Glazer's Wine brands in the state.
360 VODKA, owned by McCormick, will be the Official Spirit of the 2008 Sundance Film Festival.
Until tomorrow, Megan
“The chief obstacle to the progress of the human race is the human race.”
Don Marquis
--------- Sell Day Calendar ----------
Today's Sell Day: 5
Sell days this month: 22
Sell days this month last year: 22
This month ends on a: Thur
This month last year ended on a: Wed.
YTD sell days Over/Under: 0
SPIRITS. Speaking of spirits, Svedka reportedly saw a shipment growth of 50% in the third quarter. Perhaps all that “risqué” marketing is working after all. Besides Svedka, spirits growth was driven by premium brands including Black Velvet, Ridgemont Reserve Bourbon and 99 Schnapps family.
Total spirits net sales increased 31% for the quarter, primarily due to the March 2007 acquisition of Svedka Vodka, with 12% growth in organic net sales reflecting higher average selling prices and volume gains.
WINE. The Beam Global acquisition has certainly been helpful in boistering Constellation’s premium and super-premium wine portfolio. The star of the portfolio, Clos du Bois, has been growing at a volume rate of 18% in the last 52 weeks period (based on IRI data), noted Chief Rob Sands.
"To fully leverage the acquisition we will realign the sales and marketing organization supporting our U.S. wine business. The sales and marketing teams will focus on specific consumer segments that include luxury/fine wine, premium wine and value/specialty wine. In connection with these actions, we are also rationalizing our U.S. wine product portfolio, primarily related to our value products, which we believe will generate efficiencies and enhance our focus on higher growth, higher margin brands," he continued.
As you know, premiumization is a big part of Constellation’s strategy. The company said “positive momentum” continues in the trading up arena, helped by Robert Mondavi, Estancia, Black Stone, Kim Crawford, and Simi just to name a few.
North America branded wine sales rose 5%, reflecting sold growth in US. The US wine business returned to targeted wine sales growth levels during the quarter as the distributor inventory reduction initiative was essentially completed in the 2nd quarter. Now that the reductions are done, Constellation expects a lower growth rate in Q-4 as they return to the lower levels established at the end of the second quarter.
AUSTRALIAN DROUGHT. The company continues to face competitive market issues in the UK and Australia. Although bulk wine is shrinking in the UK, the country’s market pricing has not changed significantly as major grocery chains continue to drive competition. Rob said that drought conditions are expected to effect Australian wine but they’re not sure how much.
“If you look at Australia it’s an over-supply situation turning into a balanced situation potentially turning into under-supply but we don’t think those trends will be unfavorable to us.”
“Pricing is going to have to be taken,” continued Rob. “In our industry and other industries suppliers are indicating pretty much across all consumer goods durables that they’re going to take pricing. I would say that as a consequence of that, we’re hopeful the environment will be positive in that regard. Will the retailers like it? No, they’re saying they don’t like it in the UK...they will try to do whatever they can to avoid it or offset it.”
ABSOLUT. Rob said “it’s possible” that Constellation could benefit for the eventual Absolut acquisition. Although the company doesn’t plan to bid on the Swedish vodka, it might try to acquire brands for sale by companies that are trying to make room for Absolut.
SOUTHERN WINE & SPIRITS ENTERS DELAWARE
Southern Wine & Spirits has acquired the former Delaware Importers LLC of New Castle,
Delaware to form Southern Wine & Spirits (SWS) of Delaware. Delaware Importers was a j-v between Ed Stegemeier and Roger Hart, the company's founders, and Eber Bros. Wine & Spirits Corp. of Rochester, New York.
Steven Dick, executive VP, GM of SWS of Pennsylvania has been promoted to executive VP, GM of SWS of Delaware, effective January 1. Meanwhile, Brad Waxman will fill the title of VP, GM of SWS Pennsylvania.
In another transaction, SWS has also bought Postiy Wine & Spirits of Ohio, which is based in Columbus. As you’ll recall, SWS entered Ohio earlier last year with the acquisition of Paramount Distillers Brokerage operations. SWS Robinson Cooper has been appointed VP, GM of SWS Ohio. The appointment is also effective January 1. Rob comes to SWS from Beam Global.
INDUSTRY TAKES SIDES OVER WINE.COM
The incident between Wine.com and other wine retailers is really heating up, and it seems that everyone has an opinion on the issue. As you’d expect, a lot of people in the wine industry, excluding wholesalers, are entirely in opposition against what they consider a sting operation by Wine.com to rat out competition. Wine.com or friends of the company supposedly ordered wine from competitors illegally and then turned them in to authorities. Of course, there are always (at least) two sides to every situation, and the WSWA applauds Wine.com for exposing “unregulated, illegal interstate shipments of alcohol to consumers.”
As you’ll recall, Wine.com ceo Richard Bergsund Wine.Com is sending letters to state government agencies telling them the names of competitors who they claim are illegally shipping wine to consumers in states that outlaw such practices. Furthermore, Bergsund is requesting that the state take legal action on those companies. For some more background on the issue, click here.
Vinography posted an interesting editorial on the issue. Here’s an excerpt:
“The wine industry has a bit of a dirty little secret -- people break the rules all the time. Wineries and retailers (especially retailers) and the consumers that buy from them have all sorts of ways of getting around the shipping regulations.”
“Those who don't want to break the rules, however, must be resigned to opening operations (distribution centers, offices, etc.) in every restrictive state in order to be able to sell wine to consumers in that state legally.”
“The wine industry, while competitive, is generally marked by a real collegiality, and it's despicable to see such shallow, backstabbing behavior on the part of Wine.Com. Shame on them. It's mean spirited from a competitive standpoint, and it has the indirect effect of screwing ordinary consumers.”
To read the whole post, click here.
WSD BRIEFS:
WINDSOR SONOMA, a winery created by Pat Roney and Leslie Rudd, is scheduled to release its first vintages of sauvignon blanc, chardonnay, and pinot noir in January, while final details are completed to build their new 6,700 sq. ft. boutique facility in Healdsburg. Construction is expected to be finished by harvest of 2009.
GLAZER’S of Texas has appointed James LaBarba as VP Wines, the company said yesterday. LaBarba will be responsible for all sales and marketing activities on Glazer's Wine brands in the state.
360 VODKA, owned by McCormick, will be the Official Spirit of the 2008 Sundance Film Festival.
Until tomorrow, Megan
“The chief obstacle to the progress of the human race is the human race.”
Don Marquis
--------- Sell Day Calendar ----------
Today's Sell Day: 5
Sell days this month: 22
Sell days this month last year: 22
This month ends on a: Thur
This month last year ended on a: Wed.
YTD sell days Over/Under: 0
posted at 2:14 PM
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