Judge & Dolph Completes Deal in Illinois
Wirtz Beverage Group announced that its merger with Glazer’s Union Beverage in Illinois to form Judge & Dolph has been completed. The partnership was announced in March and creates an Illinois based company with 1,100 employees and approximately $850 million in annual revenue.
Rocky Wirtz will serve as president of the new Judge & Dolph, which is now the leading wine and spirits wholesaler in Illinois.
The new company’s suppliers include Brown-Forman, Kendall-Jackson Wine Estates, Diageo, William Grant and Sons, Rodney Strong, Barton Brands, Kobrand, Remy Cointreau, Sidney Frank Importing Company and Proximo Spirits, E. & J. Gallo Winery, Banfi Wines, Constellation Wines, Luxco, Sazerac, McCormick Distilling, Maisons Marques and Domaines, Winebow, Schmitt Sohne, King Estate, Precept Brands.
“As we usher in a new era in Illinois, this really is the first of several exciting announcements that are in store,” said Judge & Dolph president Rocky Wirtz.
FUTURE OF JUDGE & DOLPH. Speaking to WSD earlier today, Ed Callison, VP/General Manager of Judge & Dolph Spectrum said the company’s first initiative is to focus on executing this partnership.
When asked if this deal paves the way to future mergers with Glazer’s, Ed said:
“Our friends at Glazer’s have worked diligently to help make this a partnership in every sense of the word. It has been, and will continue to be our privilege to call them our partners. Today, we’re focused on this partnership. It’s a great partnership that brings the strengths of both companies to bear on those we serve.”
UBS ON BROWN-FORMAN, PERNOD AND DIAGEO
UBS analyst Melissa Earlam issued three separate research notes today on Brown-Forman, Pernod and Diageo. Here are some excerpts.
BROWN-FORMAN. UBS lowered its Brown-Forman rating to neutral due to reduced earnings per share to $4.03 from $4.11, among other things. UBS says this reflects spirits category slowdown, macro issues in the US and Western Europe and accelerating commodity inflation.
“Although the sprits industry has been relatively immune to economic slowdowns in the past, BFB trends have lagged total spirits growth on core brands while key commodities such as wood, grain, and energy have continued to rise and impact margins. Additionally, with 70% exposure to the US & Western Europe, we see macro-economic challenges limiting near-term upside. In the US, while the pricing environment remains favorable, we believe this is priced into the stock following BFB’s rise of roughly 6% since May 1st.”
UBS says positive factors through 2008 should limit the down side, including the spirits industry historical resilience to economic slowdowns, the lapping of a Jack Daniels price increase and sales restructuring and easier comps ahead.
PERNOD. UBS rated Pernod at “buy,” citing its business model and increased demand for premium spirits in emerging markets. UBS lowered growth in the Americas for fiscal 2009-2010 to 6% and 5% and now assume 6.2% group sales growth in 2009 and 5.9% in 2010.
“We believe the consumer of premium spirits is on balance less macro sensitive than a beer consumer,” said Melissa.
She also remarked that the best case scenario for Pernod in terms of exiting its agreement to distribution SPI’s Stoli “would be for Fortune Brands to distribute or acquire Stoli thereby releasing Pernod early from Future Brands.”
DIAGEO. UBS downgraded Diageo from buy to neutral, claiming management is likely to be more cautious in fiscal 2009 due to rising US unemployment data and concerns about emerging market consumption.
However, UBS believes “Diageo is defensive and its key growth levers remain intact: (1) global Scotch growth, (2) good pricing, (3) premiumization, (4) Latam strength.”
FOSTER’S AN UNLIKELY TAKEOVER TARGET IN SHORT TERM
It is unlikely that Foster’s will be a takeover target anytime soon, as the beer and wine segments continue to under-perform. Foster’s stock dropped 3% to A$4.82 at market close in Sydney today. Earlier, its shares traded at A$4.66, the lowest in almost four years. Andy Kovacs of Macquarie Group described the situation as “woeful” and says the company is losing sales at both its championed beer and wine units.
“Foster's core business has continued its woeful performance in the Australian liquor market as shown by its volume and value decline across all liquor segments,” said Andy, who rates the stock ‘underperform.’ “It is Foster's domestic beer business which is considered to be the key attraction to an acquirer, and this decline and underperformance could dampen interest.”
“Furthermore, the weak operational performance highlights why this is a risky option, with acquirers, at least for the wine business, very difficult to identify,” he continued.
ALCOHOL’S ECONOMIC RESILIENCE COULD BE SHORT LIVED
Business Week issued an interesting write up that sums up several reports and themes over the past couple of months in the industry.
1. For example, alcoholic beverages are pretty recession resistant and are not as affected by the economy as other consumer-discretionary products.
2. Premium and ultra-premium spirits continue to outperform the rest of the market.
3. Although Fortune issued a profit warning yesterday, analysts generally agree that its spirits division is less sensitive to the slowing economy than its home and hardware and golf divisions.
4. Spirits has been taking back market share from the beer industry since 2001, but is expected to moderate.
"We think wine and spirits will be the last to be impacted, so some of this may be a delay. But there's enough strength in that income [group] that they can probably weather this pretty well," says Richard Hurst of Nielsen, as quoted in the article.
WHITE ROCKET INTRODUCES FRENCH MAID
White Rocket Wine Co., developed by Kendall-Jackson to market wines to Millennials, is introducing French Maid from the renowned Languedoc region of southern France. The product line includes French Maid Cabernet Sauvignon, Merlot, Chardonnay, Pinot Noir and Sauvignon Blanc, which the company says carves a new niche for French wines by falling in the $12 premium price point.
“Imported wines now account for nearly one-third of the U.S. wine business, an all-time high,” says White Rocket VP of marketing Mark Feinberg. “In 2007, dollar sales of imports rose 9%, outpacing the growth of the total U.S. wine market...French Maid is destined to charm the sophisticated Millennial Generation consumers who are fast embracing super-premium wines, especially imports, as their beverages of choice.”
French Maid wines are crafted by White Rocket winemaker Melissa Bates and the Bonfils family of Languedoc, France. Melissa said the new wine appeals to both Old and New World palates.
ANDREW PELLER BUYS WORLD VINTNERS
Canadian wine company Andrew Peller said today it has bought consumer-made wine kit company World Vintners Inc. for $9-million. The acquisition adds 75 franchised wine on-premise and retail outlets under the Wine Kitz brand name to Andrew Peller.
“This acquisition significantly strengthens our consumer-made wine business, and enhances our presence in a number of markets,” president and CEO John Peller said in a statement.
WSD BRIEFS:
A BORDEAUX COURT RULED YESTERDAY THAT THE 2006 ST. EMILION classification is invalid and can no longer be used. The St. Emilion Wine Union is now awaiting a decision from INAO (Institut National des Appellations d'Origine) on whether an appeal will be launched.
MARTINI & ROSSI IS PARTNERING WITH THE ANDY WARHOL FOUNDATION to launch four revived print ads Andy Warhol drew in the late ‘50s and early ‘60s for Martini & Rossi. The ads will run through the end of the year.
Until tomorrow, Megan
“Some of the worst mistakes of my life have been haircuts.”
Jim Morrison
--------- Sell Day Calendar ----------
Today’s Sell Day: 2
Sell days this month: 23
Sell days this month last year: 22
This month ends on a: Thur
This month last year ended on a: Tues.
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.
Rocky Wirtz will serve as president of the new Judge & Dolph, which is now the leading wine and spirits wholesaler in Illinois.
The new company’s suppliers include Brown-Forman, Kendall-Jackson Wine Estates, Diageo, William Grant and Sons, Rodney Strong, Barton Brands, Kobrand, Remy Cointreau, Sidney Frank Importing Company and Proximo Spirits, E. & J. Gallo Winery, Banfi Wines, Constellation Wines, Luxco, Sazerac, McCormick Distilling, Maisons Marques and Domaines, Winebow, Schmitt Sohne, King Estate, Precept Brands.
“As we usher in a new era in Illinois, this really is the first of several exciting announcements that are in store,” said Judge & Dolph president Rocky Wirtz.
FUTURE OF JUDGE & DOLPH. Speaking to WSD earlier today, Ed Callison, VP/General Manager of Judge & Dolph Spectrum said the company’s first initiative is to focus on executing this partnership.
When asked if this deal paves the way to future mergers with Glazer’s, Ed said:
“Our friends at Glazer’s have worked diligently to help make this a partnership in every sense of the word. It has been, and will continue to be our privilege to call them our partners. Today, we’re focused on this partnership. It’s a great partnership that brings the strengths of both companies to bear on those we serve.”
UBS ON BROWN-FORMAN, PERNOD AND DIAGEO
UBS analyst Melissa Earlam issued three separate research notes today on Brown-Forman, Pernod and Diageo. Here are some excerpts.
BROWN-FORMAN. UBS lowered its Brown-Forman rating to neutral due to reduced earnings per share to $4.03 from $4.11, among other things. UBS says this reflects spirits category slowdown, macro issues in the US and Western Europe and accelerating commodity inflation.
“Although the sprits industry has been relatively immune to economic slowdowns in the past, BFB trends have lagged total spirits growth on core brands while key commodities such as wood, grain, and energy have continued to rise and impact margins. Additionally, with 70% exposure to the US & Western Europe, we see macro-economic challenges limiting near-term upside. In the US, while the pricing environment remains favorable, we believe this is priced into the stock following BFB’s rise of roughly 6% since May 1st.”
UBS says positive factors through 2008 should limit the down side, including the spirits industry historical resilience to economic slowdowns, the lapping of a Jack Daniels price increase and sales restructuring and easier comps ahead.
PERNOD. UBS rated Pernod at “buy,” citing its business model and increased demand for premium spirits in emerging markets. UBS lowered growth in the Americas for fiscal 2009-2010 to 6% and 5% and now assume 6.2% group sales growth in 2009 and 5.9% in 2010.
“We believe the consumer of premium spirits is on balance less macro sensitive than a beer consumer,” said Melissa.
She also remarked that the best case scenario for Pernod in terms of exiting its agreement to distribution SPI’s Stoli “would be for Fortune Brands to distribute or acquire Stoli thereby releasing Pernod early from Future Brands.”
DIAGEO. UBS downgraded Diageo from buy to neutral, claiming management is likely to be more cautious in fiscal 2009 due to rising US unemployment data and concerns about emerging market consumption.
However, UBS believes “Diageo is defensive and its key growth levers remain intact: (1) global Scotch growth, (2) good pricing, (3) premiumization, (4) Latam strength.”
FOSTER’S AN UNLIKELY TAKEOVER TARGET IN SHORT TERM
It is unlikely that Foster’s will be a takeover target anytime soon, as the beer and wine segments continue to under-perform. Foster’s stock dropped 3% to A$4.82 at market close in Sydney today. Earlier, its shares traded at A$4.66, the lowest in almost four years. Andy Kovacs of Macquarie Group described the situation as “woeful” and says the company is losing sales at both its championed beer and wine units.
“Foster's core business has continued its woeful performance in the Australian liquor market as shown by its volume and value decline across all liquor segments,” said Andy, who rates the stock ‘underperform.’ “It is Foster's domestic beer business which is considered to be the key attraction to an acquirer, and this decline and underperformance could dampen interest.”
“Furthermore, the weak operational performance highlights why this is a risky option, with acquirers, at least for the wine business, very difficult to identify,” he continued.
ALCOHOL’S ECONOMIC RESILIENCE COULD BE SHORT LIVED
Business Week issued an interesting write up that sums up several reports and themes over the past couple of months in the industry.
1. For example, alcoholic beverages are pretty recession resistant and are not as affected by the economy as other consumer-discretionary products.
2. Premium and ultra-premium spirits continue to outperform the rest of the market.
3. Although Fortune issued a profit warning yesterday, analysts generally agree that its spirits division is less sensitive to the slowing economy than its home and hardware and golf divisions.
4. Spirits has been taking back market share from the beer industry since 2001, but is expected to moderate.
"We think wine and spirits will be the last to be impacted, so some of this may be a delay. But there's enough strength in that income [group] that they can probably weather this pretty well," says Richard Hurst of Nielsen, as quoted in the article.
WHITE ROCKET INTRODUCES FRENCH MAID
White Rocket Wine Co., developed by Kendall-Jackson to market wines to Millennials, is introducing French Maid from the renowned Languedoc region of southern France. The product line includes French Maid Cabernet Sauvignon, Merlot, Chardonnay, Pinot Noir and Sauvignon Blanc, which the company says carves a new niche for French wines by falling in the $12 premium price point.
“Imported wines now account for nearly one-third of the U.S. wine business, an all-time high,” says White Rocket VP of marketing Mark Feinberg. “In 2007, dollar sales of imports rose 9%, outpacing the growth of the total U.S. wine market...French Maid is destined to charm the sophisticated Millennial Generation consumers who are fast embracing super-premium wines, especially imports, as their beverages of choice.”
French Maid wines are crafted by White Rocket winemaker Melissa Bates and the Bonfils family of Languedoc, France. Melissa said the new wine appeals to both Old and New World palates.
ANDREW PELLER BUYS WORLD VINTNERS
Canadian wine company Andrew Peller said today it has bought consumer-made wine kit company World Vintners Inc. for $9-million. The acquisition adds 75 franchised wine on-premise and retail outlets under the Wine Kitz brand name to Andrew Peller.
“This acquisition significantly strengthens our consumer-made wine business, and enhances our presence in a number of markets,” president and CEO John Peller said in a statement.
WSD BRIEFS:
A BORDEAUX COURT RULED YESTERDAY THAT THE 2006 ST. EMILION classification is invalid and can no longer be used. The St. Emilion Wine Union is now awaiting a decision from INAO (Institut National des Appellations d'Origine) on whether an appeal will be launched.
MARTINI & ROSSI IS PARTNERING WITH THE ANDY WARHOL FOUNDATION to launch four revived print ads Andy Warhol drew in the late ‘50s and early ‘60s for Martini & Rossi. The ads will run through the end of the year.
Until tomorrow, Megan
“Some of the worst mistakes of my life have been haircuts.”
Jim Morrison
--------- Sell Day Calendar ----------
Today’s Sell Day: 2
Sell days this month: 23
Sell days this month last year: 22
This month ends on a: Thur
This month last year ended on a: Tues.
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 1:26 PM
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