It’s Good to be Value
In this economic environment value priced brands are benefiting the most in the spirits segment. After years of little or no growth, value brands are starting to gain share and grow at a faster rate, as seen in Nielsen numbers to October 18. Dollar sales of value spirits grew 2.4% in the 52 weeks, 3.2% in the 12 weeks and 4.3% in the four weeks.
The data showed evidence of consumers trading down from ultra-premium spirits, which lost a significant amount of share in October. The category gained 9.7% in dollar sales in the 52 weeks to October 18, 5.1% in the 12 weeks and 2.3% in the four weeks.
Growth of mid-priced brands stayed relatively the same and premium brands lagged slightly, growing 2.2% in the 52 weeks and only 1.2% in the four weeks.
Overall, dollar sales of total distilled spirits grew 2.8% in the four weeks to October 18 and 2% in case sales. In the 52 weeks, dollar sales were up 3.4% and volume rose 2.1%.
Vodka once again experienced the highest amount of growth and actually gained some share in October. In the four weeks, vodka grew 5.7% in dollar sales and 5.2% in the 52 weeks. Growth of tequila declined considerably, with dollar sales rising 4.3% in the 52 weeks and only 1.3% in the 4 weeks.
Whiskey, gin and rum were closer across the board, with dollar sales in the four weeks up 0.7%, 0% and 1.7%, respectively, and 0.7%, -0.4% and 2.3% in the year.
BEER TAKES BACK SOME SHARE
Paul Varga attributed Brown-Forman’s “strong brands” and off-premise performance for the company’s better than expected second quarter earnings in an interview with CNBC Friday (December 5). He acknowledged that beer is getting a boost from the poor economy and taking some share from wine and spirits, but spirits continues to outgrow beer on a dollar basis.
“Wine and spirits brands over the last 7-8 years really took share from beer...in this environment we’ve seen a little bit of a shift back to that. Spirits continue to outgrow particularly in the dollar basis because there tends to be more premium entities in the spirits business than there are in the beer business. But I think all three segments are holding up pretty well throughout all of this.”
When asked about consolidation and if he views B-F as a potential takeover target from industry giants such as Diageo and ABInbev, Paul answered: “There’s been quite a bit of consolidation across the spirits industry today but the top 10 players only control about 20-25% of the world market, so it is still quite a bit of a fragmented market.”
He seemed bright about the company’s future, commenting “we’ve been more of a buyer, of course, than a seller” and believes it’s a good time for mid-sized and small spirits companies to do well.
One of the biggest trends alcohol companies are seeing in the current economy is consumers shifting to the off-premise. While this isn’t bad news, it’s not great news either. Spirits companies in particular rely on bars, nightclubs and restaurants to build brands. The on-premise, said Paul, is a “buoyant environment for brand building in our business. A lot of brands and drinks that we sell get introduced to people in the on-premise.” On the upside, strength in the off-premise allowed B-F to report good earnings.
STOLI LAUNCHES “WILD WILD EAST”
Stolichnaya is aiming a new $10-15 million ad campaign at 25- to 34-year-old vodka drinkers, reports AdWeek, with a bold pitch stating: “In a world of gold diggers, hustlers and pretenders, Stolichnaya is the only true thing.” The ads “somewhat mimic Russia’s current club scene” and features lines such as: "who will be your accomplice tonight" and "everybody is somebody's secret."
The campaign, entitled “Wild Wild East,” is meant to reflect consumers' "desire for adventure and intrigue, and Stoli's role within that desire," Andrey Skurikhin, minority shareholder at SPI Group, said in a statement, adding that the goal is to grow Stoli sales in the U.S. over the next five years. The ads are also reportedly meant to promote the brand as "independent of geography," said the company.
In the U.S. alone, ad spending for Stolichnaya topped $10 million last year (including online) and $2 million in the first five months of 2008, according to TNS Media Intelligence.
CROWN ROYAL “STAYS TRUE” IN ADVERTISING
Crown Royal is launching its first advertising campaign in more than five years. The theme centers on “strength of character” and shows accomplished individuals who have managed to stay true to their values. The two 30-second spots, titled "Set" and "Billiards," depict ordinary people doing small, yet notable things. The spot was created by Grey Worldwide New York and directed by Fredrik Bond, and will begin airing this month.
Until tomorrow, Megan
If not actually disgruntled, he was far from being gruntled.
P. G. Wodehouse
--------- Sell Day Calendar ----------
Today's Sell Day: 6
Sell days this month: 22
Sell days this month last year: 20
This month ends on a: Wed.
This month last year ended on a: Mon.
YTD sell days Over/Under: +1
BEER SUMMIT 2009 - The Four Seasons, Austin, Texas - Join us for great speakers, intelligent discourse, good food, and of course great beer at the next Beer Summit on March 1 - 2, 2009. Click here: http://tinyurl.com/beersummit
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.
The data showed evidence of consumers trading down from ultra-premium spirits, which lost a significant amount of share in October. The category gained 9.7% in dollar sales in the 52 weeks to October 18, 5.1% in the 12 weeks and 2.3% in the four weeks.
Growth of mid-priced brands stayed relatively the same and premium brands lagged slightly, growing 2.2% in the 52 weeks and only 1.2% in the four weeks.
Overall, dollar sales of total distilled spirits grew 2.8% in the four weeks to October 18 and 2% in case sales. In the 52 weeks, dollar sales were up 3.4% and volume rose 2.1%.
Vodka once again experienced the highest amount of growth and actually gained some share in October. In the four weeks, vodka grew 5.7% in dollar sales and 5.2% in the 52 weeks. Growth of tequila declined considerably, with dollar sales rising 4.3% in the 52 weeks and only 1.3% in the 4 weeks.
Whiskey, gin and rum were closer across the board, with dollar sales in the four weeks up 0.7%, 0% and 1.7%, respectively, and 0.7%, -0.4% and 2.3% in the year.
BEER TAKES BACK SOME SHARE
Paul Varga attributed Brown-Forman’s “strong brands” and off-premise performance for the company’s better than expected second quarter earnings in an interview with CNBC Friday (December 5). He acknowledged that beer is getting a boost from the poor economy and taking some share from wine and spirits, but spirits continues to outgrow beer on a dollar basis.
“Wine and spirits brands over the last 7-8 years really took share from beer...in this environment we’ve seen a little bit of a shift back to that. Spirits continue to outgrow particularly in the dollar basis because there tends to be more premium entities in the spirits business than there are in the beer business. But I think all three segments are holding up pretty well throughout all of this.”
When asked about consolidation and if he views B-F as a potential takeover target from industry giants such as Diageo and ABInbev, Paul answered: “There’s been quite a bit of consolidation across the spirits industry today but the top 10 players only control about 20-25% of the world market, so it is still quite a bit of a fragmented market.”
He seemed bright about the company’s future, commenting “we’ve been more of a buyer, of course, than a seller” and believes it’s a good time for mid-sized and small spirits companies to do well.
One of the biggest trends alcohol companies are seeing in the current economy is consumers shifting to the off-premise. While this isn’t bad news, it’s not great news either. Spirits companies in particular rely on bars, nightclubs and restaurants to build brands. The on-premise, said Paul, is a “buoyant environment for brand building in our business. A lot of brands and drinks that we sell get introduced to people in the on-premise.” On the upside, strength in the off-premise allowed B-F to report good earnings.
STOLI LAUNCHES “WILD WILD EAST”
Stolichnaya is aiming a new $10-15 million ad campaign at 25- to 34-year-old vodka drinkers, reports AdWeek, with a bold pitch stating: “In a world of gold diggers, hustlers and pretenders, Stolichnaya is the only true thing.” The ads “somewhat mimic Russia’s current club scene” and features lines such as: "who will be your accomplice tonight" and "everybody is somebody's secret."
The campaign, entitled “Wild Wild East,” is meant to reflect consumers' "desire for adventure and intrigue, and Stoli's role within that desire," Andrey Skurikhin, minority shareholder at SPI Group, said in a statement, adding that the goal is to grow Stoli sales in the U.S. over the next five years. The ads are also reportedly meant to promote the brand as "independent of geography," said the company.
In the U.S. alone, ad spending for Stolichnaya topped $10 million last year (including online) and $2 million in the first five months of 2008, according to TNS Media Intelligence.
CROWN ROYAL “STAYS TRUE” IN ADVERTISING
Crown Royal is launching its first advertising campaign in more than five years. The theme centers on “strength of character” and shows accomplished individuals who have managed to stay true to their values. The two 30-second spots, titled "Set" and "Billiards," depict ordinary people doing small, yet notable things. The spot was created by Grey Worldwide New York and directed by Fredrik Bond, and will begin airing this month.
Until tomorrow, Megan
If not actually disgruntled, he was far from being gruntled.
P. G. Wodehouse
--------- Sell Day Calendar ----------
Today's Sell Day: 6
Sell days this month: 22
Sell days this month last year: 20
This month ends on a: Wed.
This month last year ended on a: Mon.
YTD sell days Over/Under: +1
BEER SUMMIT 2009 - The Four Seasons, Austin, Texas - Join us for great speakers, intelligent discourse, good food, and of course great beer at the next Beer Summit on March 1 - 2, 2009. Click here: http://tinyurl.com/beersummit
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 1:23 PM
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