Alcohol Sales Soft in December
Alcohol sales over the holidays were not so good, according to IRI’s four week data ending December 28. A calendar shift is one reason for the decline. Not only was Thanksgiving late this year, but the period ended two days earlier than the same period last year. The next set of data should give a better read.
Nonetheless, Morgan Stanley noted that alcohol volumes were soft, declining -3.6% altogether. Beer volumes were down -3.3%, while spirits volumes declined -5.6% and wine dropped -2.9%. Domestic beer volumes fared better than imports.
Meanwhile, the average price per volume softened somewhat. The industry average increased 2.3% with domestic beer’s average price growing 6%. The average price of imported beer grew 1%, while spirits pricing was flat and wine pricing increased 1%.
The shift in the calendar exacerbated trade-down in wine, said Morgan Stanley. In the latest 4 weeks, wine priced $7 and above wine saw sales decline -4.5%, while $7 and below grew 1%. Constellation continued to lose share in wine.
HARD TIMES FOR AUSSIE WINERIES
The global recession is making things difficult for wine grape growers in Western Australia who are struggling to find buyers for this season’s grapes. It doesn’t help that its two largest export markets, the United States and the United Kingdom, are in a recession, prompting large winemakers to think long and hard before entering into a contract. According to the AWBC, exports to the U.S. and Britain declined -26.5% and -18.2%, respectively. Australia's overall wine exports dropped a whopping -26.3% in November and value fell -18% to $2.47 billion last year.
As a result, winemakers are lending premium quality grapes to cheaper labels, or dropping prices altogether. According to local reports, Winemakers Federation of Australia chief Stephen Strachan said he expected the situation to last for about 12 months, which will force the industry to make some adjustments.
In the beginning of 2008, the strong Australian dollar was making it more difficult for winemakers to compete internationally, and a low 2007 grape harvest put pressure on supply. In the second half of the year, the Aussie dollar declined some and a large 2008 harvest took care of supply concerns. However, the poor economy has put a big constraint on exports.
For example, wine grape growers in the Riverland district were reportedly warned they would be paid 30% less than normal, sometimes even below the cost. Constellation also said Wednesday that the situation in Australia, along with the UK, is posing difficulties for the company. Meanwhile, Foster’s is still trying to sort out its wine business. Theoretically, we should know what Foster’s plans to do with the company by mid February when it releases the outcome of its Strategic Wine Review.
WAL-MART SHOWS SIGNS OF STRUGGLE IN RECESSION
It seems even Wal-Mart is having problems in the recession after being one of only two members of the Dow Jones Industrial Average to have made gains last year. The retailer announced it missed expectations for December sales yesterday, prompting management to trim its earnings forecast by 7 cents to 91-94 cents as a result of lower-than-expected sales at its Sam's Club warehouse and higher costs. As the Financial Times put it: “If a discounter - until now a beneficiary of shopper thriftiness - is struggling, the outlook for consumer spending must be bleak indeed.”
However, Constellation noted in its conference call earlier this week that it has accelerated its presence at mass merchandisers like Costco and Wal-Mart as consumers increasingly shift their shopping patterns to non-traditional formats. Compared to other retailers, Wal-Mart is doing quite nicely. Traffic to its stores has risen in each of the past three months and profits are expected to grow in 2009. In the U.S., Wal-Mart’s net sales grew 4.3% in December. Comparable same-stores sales excluding fuel grew 2.6% for Wal-Mart in the U.S. and 1.3% for Sam’s.
“Due to the difficult economy and severe winter weather in some regions, the holiday season was more challenging for retailers than expected,” said Eduardo Castro-Wright, vice chairman, Wal-Mart Stores. “We are pleased that we had positive traffic for the third month in a row and that Walmart performed relatively well given the environment.”
“We believe we continue to gain market share on the strength of positive traffic in response to Walmart’s price leadership, as well as overall customer experience improvements,” Castro-Wright added.
Meanwhile, December same-store sales for Costco grew 2% in the U.S. excluding the negative
impacts from gasoline deflation and foreign exchange.
SKYY VODKA FOUNDER LAUNCHES NEW LABEL
Maurice Kanbar, developer of Skyy Spirits and founder of Blue Angel Spirits, is launching Blue Angel Ultra Premium Vodka (suggested retail $29.99 per 750ml). Recall that Maurice sold Skyy to Campari in 2005, and is a well-known inventor that holds more than 40 U.S. patents from various industries.
According to the press release, he “has made significant advancements to the multi-stage distillation and filtration systems he pioneered during the 1990’s,” resulting in his new vodka. He uses a new multi-column distillation process that removes potential headache causing congeners (alcohol impurities) at specific temperatures.
Blue Angel will initially launch in California with Southern Wine and Spirits, and additional states are planned throughout 2009.
“The luxury vodka market, with just two or three highly successful brands, is exhibiting terrific growth and we anticipate this trend to continue”, said Jim Eason, VP and COO of Blue Angel Spirits, LLC. “Overall, the vodka category dominates the U.S. distilled spirits market with nearly 30% share of consumption and our ambitious goal is to grow the luxury segment by trading up consumers from the mid-priced tier.”
WSD BRIEF:
YUCAIPA BUYS 7% STAKE IN WHOLE FOODS. After Ron Burkle’s Yucaipa Cos. disclosed a 7% stake in Whole Foods, the grocer posted its biggest gain in Nasdaq trading since going public 17 years ago. Whole Foods climbed $2.26, or 23 percent, to $12.27 at 4 p.m. in Nasdaq Stock Market trading, the biggest gain since its initial offering in 1992. Although the company has suffered in the recession, Yucaipa said in a filing: “There are substantial opportunities for the company to improve operations and its pricing image while maintaining its high-quality product offering.”
Until Monday, Megan
“The whole problem with the world is that fools and fanatics are always so certain of themselves, but wiser people so full of doubts.”
Bertrand Russell
--------- Sell Day Calendar ----------
Today's Sell Day: 6
Sell days this month: 21
Sell days this month last year: 22
This month ends on a: Fri
This month last year ended on a: Thurs
YTD sell days Over/Under: 0
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.
Nonetheless, Morgan Stanley noted that alcohol volumes were soft, declining -3.6% altogether. Beer volumes were down -3.3%, while spirits volumes declined -5.6% and wine dropped -2.9%. Domestic beer volumes fared better than imports.
Meanwhile, the average price per volume softened somewhat. The industry average increased 2.3% with domestic beer’s average price growing 6%. The average price of imported beer grew 1%, while spirits pricing was flat and wine pricing increased 1%.
The shift in the calendar exacerbated trade-down in wine, said Morgan Stanley. In the latest 4 weeks, wine priced $7 and above wine saw sales decline -4.5%, while $7 and below grew 1%. Constellation continued to lose share in wine.
HARD TIMES FOR AUSSIE WINERIES
The global recession is making things difficult for wine grape growers in Western Australia who are struggling to find buyers for this season’s grapes. It doesn’t help that its two largest export markets, the United States and the United Kingdom, are in a recession, prompting large winemakers to think long and hard before entering into a contract. According to the AWBC, exports to the U.S. and Britain declined -26.5% and -18.2%, respectively. Australia's overall wine exports dropped a whopping -26.3% in November and value fell -18% to $2.47 billion last year.
As a result, winemakers are lending premium quality grapes to cheaper labels, or dropping prices altogether. According to local reports, Winemakers Federation of Australia chief Stephen Strachan said he expected the situation to last for about 12 months, which will force the industry to make some adjustments.
In the beginning of 2008, the strong Australian dollar was making it more difficult for winemakers to compete internationally, and a low 2007 grape harvest put pressure on supply. In the second half of the year, the Aussie dollar declined some and a large 2008 harvest took care of supply concerns. However, the poor economy has put a big constraint on exports.
For example, wine grape growers in the Riverland district were reportedly warned they would be paid 30% less than normal, sometimes even below the cost. Constellation also said Wednesday that the situation in Australia, along with the UK, is posing difficulties for the company. Meanwhile, Foster’s is still trying to sort out its wine business. Theoretically, we should know what Foster’s plans to do with the company by mid February when it releases the outcome of its Strategic Wine Review.
WAL-MART SHOWS SIGNS OF STRUGGLE IN RECESSION
It seems even Wal-Mart is having problems in the recession after being one of only two members of the Dow Jones Industrial Average to have made gains last year. The retailer announced it missed expectations for December sales yesterday, prompting management to trim its earnings forecast by 7 cents to 91-94 cents as a result of lower-than-expected sales at its Sam's Club warehouse and higher costs. As the Financial Times put it: “If a discounter - until now a beneficiary of shopper thriftiness - is struggling, the outlook for consumer spending must be bleak indeed.”
However, Constellation noted in its conference call earlier this week that it has accelerated its presence at mass merchandisers like Costco and Wal-Mart as consumers increasingly shift their shopping patterns to non-traditional formats. Compared to other retailers, Wal-Mart is doing quite nicely. Traffic to its stores has risen in each of the past three months and profits are expected to grow in 2009. In the U.S., Wal-Mart’s net sales grew 4.3% in December. Comparable same-stores sales excluding fuel grew 2.6% for Wal-Mart in the U.S. and 1.3% for Sam’s.
“Due to the difficult economy and severe winter weather in some regions, the holiday season was more challenging for retailers than expected,” said Eduardo Castro-Wright, vice chairman, Wal-Mart Stores. “We are pleased that we had positive traffic for the third month in a row and that Walmart performed relatively well given the environment.”
“We believe we continue to gain market share on the strength of positive traffic in response to Walmart’s price leadership, as well as overall customer experience improvements,” Castro-Wright added.
Meanwhile, December same-store sales for Costco grew 2% in the U.S. excluding the negative
impacts from gasoline deflation and foreign exchange.
SKYY VODKA FOUNDER LAUNCHES NEW LABEL
Maurice Kanbar, developer of Skyy Spirits and founder of Blue Angel Spirits, is launching Blue Angel Ultra Premium Vodka (suggested retail $29.99 per 750ml). Recall that Maurice sold Skyy to Campari in 2005, and is a well-known inventor that holds more than 40 U.S. patents from various industries.
According to the press release, he “has made significant advancements to the multi-stage distillation and filtration systems he pioneered during the 1990’s,” resulting in his new vodka. He uses a new multi-column distillation process that removes potential headache causing congeners (alcohol impurities) at specific temperatures.
Blue Angel will initially launch in California with Southern Wine and Spirits, and additional states are planned throughout 2009.
“The luxury vodka market, with just two or three highly successful brands, is exhibiting terrific growth and we anticipate this trend to continue”, said Jim Eason, VP and COO of Blue Angel Spirits, LLC. “Overall, the vodka category dominates the U.S. distilled spirits market with nearly 30% share of consumption and our ambitious goal is to grow the luxury segment by trading up consumers from the mid-priced tier.”
WSD BRIEF:
YUCAIPA BUYS 7% STAKE IN WHOLE FOODS. After Ron Burkle’s Yucaipa Cos. disclosed a 7% stake in Whole Foods, the grocer posted its biggest gain in Nasdaq trading since going public 17 years ago. Whole Foods climbed $2.26, or 23 percent, to $12.27 at 4 p.m. in Nasdaq Stock Market trading, the biggest gain since its initial offering in 1992. Although the company has suffered in the recession, Yucaipa said in a filing: “There are substantial opportunities for the company to improve operations and its pricing image while maintaining its high-quality product offering.”
Until Monday, Megan
“The whole problem with the world is that fools and fanatics are always so certain of themselves, but wiser people so full of doubts.”
Bertrand Russell
--------- Sell Day Calendar ----------
Today's Sell Day: 6
Sell days this month: 21
Sell days this month last year: 22
This month ends on a: Fri
This month last year ended on a: Thurs
YTD sell days Over/Under: 0
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 2:32 PM
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