Millennials Choose Beer
Beer remains the beverage of choice for Millennials, according to an article in Nielsen’s Consumer Insights. On a dollar basis, beer accounts for 47% of Gen Y alcoholic beverage spending, and on a volume basis, 83% of purchases. Millennials are almost twice as likely as older consumers to purchase imported beers and almost three times as likely to pick up a craft beer.
However, Nielsen discovered that beer consumption dropped 12% in the 1997–2007 period among consumers aged 21–30, who instead traded up to wine and spirits. Although the same pattern is evidenced for drinkers over 30, beer consumption only dropped 6% among older drinkers.
“Along with sophisticated media consumption patterns comes a more sophisticated palate,” said the article.
“It’s a new age of media and a new generation of challenging consumers with money to spend, a discerning eye, and an electronic neural network that never rests.”
COURT DECISION NOT A LOSS FOR FORTUNE
Courts in both New York and Stockholm denied a request from Fortune for a preliminary injunction to prevent V&S from transferring its minority stake in Beam Global to the Swedish government. However, both courts did not reject the actual claim.
According to Dow Jones:
“While the courts did not provide injunctive relief at this time, it's important to recognize that the courts in both New York and Stockholm did not reject the merits of our claim that V&S is prohibited from moving their minority interest in Beam Global outside of V&S,” said a Fortune spokesman via email.
A court in Stockholm stated that V&S must sell their minority interest to Fortune prior to the change of ownership of V&S and that an indirect transfer of the minority interest to a company outside V&S's control would be a breach of the contract, the spokesman continued.
As a result, the two companies have agreed to accept one of the arbitrators proposed by V&S. Fortune initially offered to pay $350 million for the 10% stake, while V&S asked for $1.1 billion, which included a certain amount allocated to debt.
THE NEXT NAPA VALLEY PIONEER
Who will be the next Robert Mondavi? Is Napa Valley past the point of producing such leaders? These are questions many have asked since his death last Friday. Los Angeles Times staff writer Corie Brown wrote an interesting piece on the subject.
Back in the early days of Mondavi (1966), there were considerably less wineries in operation and land was much cheaper. The biggest challenge then was to convince Americans to drink wine at all. Today, says Corie, the Valley is dominated by small producers competing for market share.
Many people are concerned by the amount of wineries in Napa that are owned by corporations. Is it only going to get worse? According to the article, there has yet to be a rush of outside investors into Napa.
Whoever takes his place, says Jacques Lurton of Bordeaux, will be someone who can transform Napa Valley yet again. “‘That person will be the new hero,’” he told the LA Times.
To view the article, click here.
CALIFORNIA FACING A GRAPE SHORTAGE
After years of dealing with a grape glut, the Califoria north coast is now facing a possible grape shortage. Unusually late frosts followed by extreme heat are causing growers to worry that the weather could reduce the size of the 2008 harvest. Pinor Noir and Chardonnay, in particular, are in short supply.
Some people in the industry have warned for years that California is headed for a shortage, and are urging growers to plant new vineyards or replant old ones to keep up with growing demand for fine wines. If not, imports could take even more share of the U.S. wine market.
However, for many growers it’s not that simple. Older vintners are facing generational transitions and have no heirs willing or able to take over their vineyards. Also, land is becoming increasingly expensive, but grape prices haven’t kept pace in all parts of the north coast.
“In sum,” according to Wines & Vines, “California growers need to plant more grapes, but it's becoming increasingly difficult to justify--except on the land's appreciation. That's fine for investors, but not for those who want to create lasting family traditions.”
DIAGEO ACQUIRES CONSTELLATION’S VALLEYFIELD FACILITY
As we reported yesterday, Constellation has agreed to sell its Valleyfield, Quebec, Canada, distillery and bottling facility to Diageo. The transaction is expected to close in June, following customary regulatory review, diligence and approvals.
"This is a good business opportunity for both Diageo and Constellation," said Andy Berk, ceo at Constellation's imported beers and spirits business unit. "Constellation will eliminate excess capacity and consolidate its operations to maximize asset utilization, improve efficiencies, generate cash flow, enhance ROIC and reduce costs, while Diageo will add the capacity it needs for Canadian production of its brands. This will be a 'win' for both companies."
Constellation will move production of its Black Velvet and Schenley Canadian whiskeys to the company's Lethbridge, Alberta, Canada, distillery and bottling facility.
The approximately 230 people working at the Valleyfield facility are to become Diageo employees. Coincidentally, Valleyfield already makes and packages Crown Royal under contract for Diageo.
Terms of the deal won't be disclosed and were “not material,” said Constellation spokesman Mike Martin, reports Bloomberg.
This marks the second acquisition announcement this year for Diageo.
JOHN MACKEY SPEAKS HIS MIND
In 2007, the ceo of Whole Foods, John Mackey, came under fire for anonymous postings he made on a financial forum involving Whole Food and Wild Oats under the alias “Rahodeb.” The comments were made years before Whole Foods acquired Wild Oats for $500 million and underwent a long investigation by the FTC.
In a recent interview with the Boston Globe, he had the chance to defend himself. He told the Globe: “I have to be more thoughtful and careful with what I say because it could show up on the front page of The Wall Street Journal or Boston Globe.” He said he had to “address a lot of the falsehoods that the media said” and even considered leaving the company at one point.
“I want to do it as long as it's fun because I don't need to do it any longer. Last year wasn't fun,” he told the Globe. “My heart didn't tell me to leave yet. Sometimes you need to really get your face slammed in the ground to really learn what you need to learn. I got slammed pretty hard in the ground, and I learned some very valuable lessons that will benefit Whole Foods over the long term. And I'm still really having a good time.”
He also said he is not ashamed of what he wrote and that things were taken out of context.
SENATE CONSIDERING AMBITIOUS IMMIGRATION PLAN
The Senate is considering a bill that would allow over 2 million immigrants to gain temporary legal status for up to five years. The controversial immigration plan gives legal status to 1.35 million farm workers, spouses and children.
A committee added the provision last week to a $194 billion emergency spending bill that will fund the wars in the Middle East.
In the past, Sen. John McCain supported an ambitious agricultural guest-worker plan, but as the presidential candidate for the Republican Party he will likely oppose anything in favor of immigrants.
WSD BRIEF:
RICHARD SANDS, Constellation’s chairman of the board of directors, will receive the 2008 Lifetime Achievement Award from the Los Angeles International Wine & Spirits Competition at its annual dinner on May 28.
Until tomorrow, Megan
“Imagination is as good as many voyages – and how much cheaper!.”
George William Curtis
--------- Sell Day Calendar ----------
Today's Sell Day: 15
Sell days this month: 22
Sell days this month last year: 23
This month ends on a: Fri.
This month last year ended on a: Thurs.
YTD sell days Over/Under: 0
WINE & SPIRITS DAILY
Subscribe or check back issues at: www.winespiritsdaily.com
Send news and comments in confidence to: megan@winespiritsdaily.com
© 2008 Wine & Spirits Daily, all rights reserved. May quote with attribution.
However, Nielsen discovered that beer consumption dropped 12% in the 1997–2007 period among consumers aged 21–30, who instead traded up to wine and spirits. Although the same pattern is evidenced for drinkers over 30, beer consumption only dropped 6% among older drinkers.
“Along with sophisticated media consumption patterns comes a more sophisticated palate,” said the article.
“It’s a new age of media and a new generation of challenging consumers with money to spend, a discerning eye, and an electronic neural network that never rests.”
COURT DECISION NOT A LOSS FOR FORTUNE
Courts in both New York and Stockholm denied a request from Fortune for a preliminary injunction to prevent V&S from transferring its minority stake in Beam Global to the Swedish government. However, both courts did not reject the actual claim.
According to Dow Jones:
“While the courts did not provide injunctive relief at this time, it's important to recognize that the courts in both New York and Stockholm did not reject the merits of our claim that V&S is prohibited from moving their minority interest in Beam Global outside of V&S,” said a Fortune spokesman via email.
A court in Stockholm stated that V&S must sell their minority interest to Fortune prior to the change of ownership of V&S and that an indirect transfer of the minority interest to a company outside V&S's control would be a breach of the contract, the spokesman continued.
As a result, the two companies have agreed to accept one of the arbitrators proposed by V&S. Fortune initially offered to pay $350 million for the 10% stake, while V&S asked for $1.1 billion, which included a certain amount allocated to debt.
THE NEXT NAPA VALLEY PIONEER
Who will be the next Robert Mondavi? Is Napa Valley past the point of producing such leaders? These are questions many have asked since his death last Friday. Los Angeles Times staff writer Corie Brown wrote an interesting piece on the subject.
Back in the early days of Mondavi (1966), there were considerably less wineries in operation and land was much cheaper. The biggest challenge then was to convince Americans to drink wine at all. Today, says Corie, the Valley is dominated by small producers competing for market share.
Many people are concerned by the amount of wineries in Napa that are owned by corporations. Is it only going to get worse? According to the article, there has yet to be a rush of outside investors into Napa.
Whoever takes his place, says Jacques Lurton of Bordeaux, will be someone who can transform Napa Valley yet again. “‘That person will be the new hero,’” he told the LA Times.
To view the article, click here.
CALIFORNIA FACING A GRAPE SHORTAGE
After years of dealing with a grape glut, the Califoria north coast is now facing a possible grape shortage. Unusually late frosts followed by extreme heat are causing growers to worry that the weather could reduce the size of the 2008 harvest. Pinor Noir and Chardonnay, in particular, are in short supply.
Some people in the industry have warned for years that California is headed for a shortage, and are urging growers to plant new vineyards or replant old ones to keep up with growing demand for fine wines. If not, imports could take even more share of the U.S. wine market.
However, for many growers it’s not that simple. Older vintners are facing generational transitions and have no heirs willing or able to take over their vineyards. Also, land is becoming increasingly expensive, but grape prices haven’t kept pace in all parts of the north coast.
“In sum,” according to Wines & Vines, “California growers need to plant more grapes, but it's becoming increasingly difficult to justify--except on the land's appreciation. That's fine for investors, but not for those who want to create lasting family traditions.”
DIAGEO ACQUIRES CONSTELLATION’S VALLEYFIELD FACILITY
As we reported yesterday, Constellation has agreed to sell its Valleyfield, Quebec, Canada, distillery and bottling facility to Diageo. The transaction is expected to close in June, following customary regulatory review, diligence and approvals.
"This is a good business opportunity for both Diageo and Constellation," said Andy Berk, ceo at Constellation's imported beers and spirits business unit. "Constellation will eliminate excess capacity and consolidate its operations to maximize asset utilization, improve efficiencies, generate cash flow, enhance ROIC and reduce costs, while Diageo will add the capacity it needs for Canadian production of its brands. This will be a 'win' for both companies."
Constellation will move production of its Black Velvet and Schenley Canadian whiskeys to the company's Lethbridge, Alberta, Canada, distillery and bottling facility.
The approximately 230 people working at the Valleyfield facility are to become Diageo employees. Coincidentally, Valleyfield already makes and packages Crown Royal under contract for Diageo.
Terms of the deal won't be disclosed and were “not material,” said Constellation spokesman Mike Martin, reports Bloomberg.
This marks the second acquisition announcement this year for Diageo.
JOHN MACKEY SPEAKS HIS MIND
In 2007, the ceo of Whole Foods, John Mackey, came under fire for anonymous postings he made on a financial forum involving Whole Food and Wild Oats under the alias “Rahodeb.” The comments were made years before Whole Foods acquired Wild Oats for $500 million and underwent a long investigation by the FTC.
In a recent interview with the Boston Globe, he had the chance to defend himself. He told the Globe: “I have to be more thoughtful and careful with what I say because it could show up on the front page of The Wall Street Journal or Boston Globe.” He said he had to “address a lot of the falsehoods that the media said” and even considered leaving the company at one point.
“I want to do it as long as it's fun because I don't need to do it any longer. Last year wasn't fun,” he told the Globe. “My heart didn't tell me to leave yet. Sometimes you need to really get your face slammed in the ground to really learn what you need to learn. I got slammed pretty hard in the ground, and I learned some very valuable lessons that will benefit Whole Foods over the long term. And I'm still really having a good time.”
He also said he is not ashamed of what he wrote and that things were taken out of context.
SENATE CONSIDERING AMBITIOUS IMMIGRATION PLAN
The Senate is considering a bill that would allow over 2 million immigrants to gain temporary legal status for up to five years. The controversial immigration plan gives legal status to 1.35 million farm workers, spouses and children.
A committee added the provision last week to a $194 billion emergency spending bill that will fund the wars in the Middle East.
In the past, Sen. John McCain supported an ambitious agricultural guest-worker plan, but as the presidential candidate for the Republican Party he will likely oppose anything in favor of immigrants.
WSD BRIEF:
RICHARD SANDS, Constellation’s chairman of the board of directors, will receive the 2008 Lifetime Achievement Award from the Los Angeles International Wine & Spirits Competition at its annual dinner on May 28.
Until tomorrow, Megan
“Imagination is as good as many voyages – and how much cheaper!.”
George William Curtis
--------- Sell Day Calendar ----------
Today's Sell Day: 15
Sell days this month: 22
Sell days this month last year: 23
This month ends on a: Fri.
This month last year ended on a: Thurs.
YTD sell days Over/Under: 0
WINE & SPIRITS DAILY
Subscribe or check back issues at: www.winespiritsdaily.com
Send news and comments in confidence to: megan@winespiritsdaily.com
© 2008 Wine & Spirits Daily, all rights reserved. May quote with attribution.
posted at 12:09 PM
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