Premiumization Train Headed For a Bump in the Road?
Will a slowing economy and rumors of a recession hurt the premiumization train? Respondents to the WSD annual truth squad survey were split down the middle when asked if consumers have already started trading down. Some said yes, some said no, and some said it really depends on what the economy does. Here’s what you had to say.
“Maybe not so much from the $20 premium end, but from the elite super-super premiums ($50+ bottles). The aspirational lifestyle of celebutante/life-in-excess trend is fading for the average consumer. Nobody wants to shell out $400 for a bottle and a table at a night club to look cool. There are better ways to impress!”
“The super premium spirit category is too broad, now mainly anything over $20 now qualifies. I think the proven $20-$30 spirits are still popular although the improved quality of value wine brands has consumers trading down.”
“In wine, they will be forced to move up from the lowest price point as the super-value segment disappears, due to short vintages and reduction in bulk wine surpluses. There may be some trading down at the lower luxury levels. The collectible wine always seems to find buyers if the scores are there and supply is limited.”
“In the wine category consumers are trading down more due to the Charles Shaw phenomenon and to a lesser extent Yellow Tail at the lower mid range price.”
“Not yet. There will be some trading down, but mostly domestic wine and super premium vodkas will be affected.”
“We have very educated consumers and the younger folks representing the next biggest target market are very savvy consumers. There is no room for losers or empty marketing schemes, but these consumers are spenders not savers like their parents.”
“I don't think so, I think that some of the super-premium products are "getting old" and consumers are looking for new super premiums.”
“To an extent I'm sure, but many are still brand loyal. Unless the economic swing is drastic, I don't see folk giving up their "Tanqueray and Tonic" quite yet.”
“I have not noticed it to any great degree. They continue to accept price increases on most commodity items. Milk and eggs have increased more than 20% in the last year.”
“Slightly - mostly in scotch, gin, and Canadian.”
“Seeing more of occasion trading down- I still see consumers ordering upscale brands but maybe trading down at retail.”
“Not going to happen; once you get the taste you don't go backwards. They may undertake a search for good values but that is a positive.
“No evidence of that in wine; millennials seem willing to pay more for perceived quality.”
“Our research suggests that generally only the consumers that are infrequent purchasers of premium and super-premium wines and/or spirits will start to trade down. Those that are now still purchasing mid-priced and lower-priced range beverages most of the time will purchase them more frequently and reduce their previous "occasional" higher priced product purchases especially in the "off-premise" markets.”
“The softening in super-premium wine that began in Australia and California a year or two ago is spreading to market stalwarts like Bordeaux, Burgundy, Barolo, etc. Trading down is inevitable, although some segments of the wine enthusiast population may simply choose to drink less.”
“Recent data shows that they aren't, and retailers and restaurants both are making decisions on the assumption that they aren't. Can perception make the reality true? I don't know.”
“The luxury tier is unaffected. Super and Ultra Premium are experiencing lower rates of growth, but are still growing. Economy is reversing earlier declines.”
WILL WINE OR SPIRITS PERSEVERE? A small majority, 30%, said distilled spirits will be hurt the most by the current slowdown, while 27% cited wine. 17% said neither spirits nor wine will have any problems, and 20% believe both will have a difficult time in 2008. The remaining 7.3% said “I don’t know.”
RNDC COMPLETES ACQUISITION OF REPUBLIC BEVERAGE CO.
Republic National Distributing Company (RNDC) has completed its purchase of Republic Beverage Company (RBC) of Omaha, Neb., RNDC President Tom Cole announced today.
RBC, formerly known as United Distillers Products Company, is now the Eagle Division of RNDC-Nebraska. RBC Chairman David Friedland will serve as chairman of this new division and Ted Friedland will serve as division president. All other members of RBC management as well as their sales team also have joined RNDC.
In addition, RNDC-Nebraska has created the Falcon Division following its recent purchase of Nebraska Wine & Spirits. Also based in Omaha, this RNDC division is headed by Paul and Gary Epstein whose father, Harold Epstein, was the founder and board chairman of Nebraska Wine & Spirits.
WSD BRIEFS:
JACK DANIEL MASTER DISTILLER JIMM BEDFORD will retire effected March 31, the company announced today. Jimmy is only the sixth Master Distiller in the brand's history.
“This year marks my 40th with the Jack Daniel Distillery and my 20th year as the master distiller,” said Bedford. “And it seemed like a good time to make the decision I’ve been thinking about for some time. It’s time I step aside and let the next generation continue the Jack Daniel’s tradition.”
The 68-year old Bedford began working at the distillery in 1968 and has served as its Master Distiller since 1988. Beam said the seventh Master Distiller will be announced soon.
MIA’S PLAYGROUND, owned by Don Sebastiani & Sons, will shift its emphasis to Burgundian varietals from the Sonoma Coast. According to company marketing director Donny Sebastiani, the focus of Mia’s Playground going forward will be a “vineyard program,” using grapes sourced from specific vineyards in the Russian River Valley and Sonoma Coast appellations. Mia’s Playground will also feature a new wrap-around label and continue to retail from $25 to $40 per bottle.
HEAVEN HILL DISTILLERIES has named Ryan O’Connor as Area Manager for Georgia and will be responsible for all of Heaven Hill’s extensive brand portfolio. He will report to Heaven Hill Regional Manager Mike Adams.
Until tomorrow, Megan
“I get up every morning determined to both change the world and have one hell of a good time. Sometimes this makes planning my day difficult.”
-E. B. White
--------- Sell Day Calendar ----------
Today’s Sell Day: 18
Sell days this month: 21
Sell days this month last year: 20
This month ends on a: Fri.
This month last year ended on a: Wed.
YTD sell days Over/Under: 0
“Maybe not so much from the $20 premium end, but from the elite super-super premiums ($50+ bottles). The aspirational lifestyle of celebutante/life-in-excess trend is fading for the average consumer. Nobody wants to shell out $400 for a bottle and a table at a night club to look cool. There are better ways to impress!”
“The super premium spirit category is too broad, now mainly anything over $20 now qualifies. I think the proven $20-$30 spirits are still popular although the improved quality of value wine brands has consumers trading down.”
“In wine, they will be forced to move up from the lowest price point as the super-value segment disappears, due to short vintages and reduction in bulk wine surpluses. There may be some trading down at the lower luxury levels. The collectible wine always seems to find buyers if the scores are there and supply is limited.”
“In the wine category consumers are trading down more due to the Charles Shaw phenomenon and to a lesser extent Yellow Tail at the lower mid range price.”
“Not yet. There will be some trading down, but mostly domestic wine and super premium vodkas will be affected.”
“We have very educated consumers and the younger folks representing the next biggest target market are very savvy consumers. There is no room for losers or empty marketing schemes, but these consumers are spenders not savers like their parents.”
“I don't think so, I think that some of the super-premium products are "getting old" and consumers are looking for new super premiums.”
“To an extent I'm sure, but many are still brand loyal. Unless the economic swing is drastic, I don't see folk giving up their "Tanqueray and Tonic" quite yet.”
“I have not noticed it to any great degree. They continue to accept price increases on most commodity items. Milk and eggs have increased more than 20% in the last year.”
“Slightly - mostly in scotch, gin, and Canadian.”
“Seeing more of occasion trading down- I still see consumers ordering upscale brands but maybe trading down at retail.”
“Not going to happen; once you get the taste you don't go backwards. They may undertake a search for good values but that is a positive.
“No evidence of that in wine; millennials seem willing to pay more for perceived quality.”
“Our research suggests that generally only the consumers that are infrequent purchasers of premium and super-premium wines and/or spirits will start to trade down. Those that are now still purchasing mid-priced and lower-priced range beverages most of the time will purchase them more frequently and reduce their previous "occasional" higher priced product purchases especially in the "off-premise" markets.”
“The softening in super-premium wine that began in Australia and California a year or two ago is spreading to market stalwarts like Bordeaux, Burgundy, Barolo, etc. Trading down is inevitable, although some segments of the wine enthusiast population may simply choose to drink less.”
“Recent data shows that they aren't, and retailers and restaurants both are making decisions on the assumption that they aren't. Can perception make the reality true? I don't know.”
“The luxury tier is unaffected. Super and Ultra Premium are experiencing lower rates of growth, but are still growing. Economy is reversing earlier declines.”
WILL WINE OR SPIRITS PERSEVERE? A small majority, 30%, said distilled spirits will be hurt the most by the current slowdown, while 27% cited wine. 17% said neither spirits nor wine will have any problems, and 20% believe both will have a difficult time in 2008. The remaining 7.3% said “I don’t know.”
RNDC COMPLETES ACQUISITION OF REPUBLIC BEVERAGE CO.
Republic National Distributing Company (RNDC) has completed its purchase of Republic Beverage Company (RBC) of Omaha, Neb., RNDC President Tom Cole announced today.
RBC, formerly known as United Distillers Products Company, is now the Eagle Division of RNDC-Nebraska. RBC Chairman David Friedland will serve as chairman of this new division and Ted Friedland will serve as division president. All other members of RBC management as well as their sales team also have joined RNDC.
In addition, RNDC-Nebraska has created the Falcon Division following its recent purchase of Nebraska Wine & Spirits. Also based in Omaha, this RNDC division is headed by Paul and Gary Epstein whose father, Harold Epstein, was the founder and board chairman of Nebraska Wine & Spirits.
WSD BRIEFS:
JACK DANIEL MASTER DISTILLER JIMM BEDFORD will retire effected March 31, the company announced today. Jimmy is only the sixth Master Distiller in the brand's history.
“This year marks my 40th with the Jack Daniel Distillery and my 20th year as the master distiller,” said Bedford. “And it seemed like a good time to make the decision I’ve been thinking about for some time. It’s time I step aside and let the next generation continue the Jack Daniel’s tradition.”
The 68-year old Bedford began working at the distillery in 1968 and has served as its Master Distiller since 1988. Beam said the seventh Master Distiller will be announced soon.
MIA’S PLAYGROUND, owned by Don Sebastiani & Sons, will shift its emphasis to Burgundian varietals from the Sonoma Coast. According to company marketing director Donny Sebastiani, the focus of Mia’s Playground going forward will be a “vineyard program,” using grapes sourced from specific vineyards in the Russian River Valley and Sonoma Coast appellations. Mia’s Playground will also feature a new wrap-around label and continue to retail from $25 to $40 per bottle.
HEAVEN HILL DISTILLERIES has named Ryan O’Connor as Area Manager for Georgia and will be responsible for all of Heaven Hill’s extensive brand portfolio. He will report to Heaven Hill Regional Manager Mike Adams.
Until tomorrow, Megan
“I get up every morning determined to both change the world and have one hell of a good time. Sometimes this makes planning my day difficult.”
-E. B. White
--------- Sell Day Calendar ----------
Today’s Sell Day: 18
Sell days this month: 21
Sell days this month last year: 20
This month ends on a: Fri.
This month last year ended on a: Wed.
YTD sell days Over/Under: 0
posted at 3:31 PM
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