TheRumLab Industry Newsletter Week #15 of 2024
The Rum Lab
TheRumLab - Our main focus is Rum Education. We do so through our digital magazine, events, infographics, and more.
JEFFREY ZARNOW STARR Rum, Founder & CEO.
STARR Rum is an award-winning, field-to-bottle, single estate rum made by hand from sugarcane grown, distilled, oak aged, blended, and bottled responsibly on site on the African Island Paradise of Mauritius, in the Indian Ocean, 1,000 miles East of Madagascar.
Nearly 100 years in operation, STARR Rum was created in 2005 under the New Economic Partners for African Development initiative of the African Union to bring these exceptionally smooth, approachable, easy-drinking rums for the first time into the United States and beyond as 100% Made in Africa—Fair Labor, Fair Trade Goods. ?Furthermore, STARR’s operations in Mauritius utilize sustainable practices and are committed to preserving the pristine island environment at home and across the globe. Jeffrey Zarnow is the Founder and CEO of STARR Rum. Let’s learn more about him in this interview!
TRL: Who is Jeffrey Zarnow? ?
I’m pretty random. I started my career in Entertainment. After a stint at Warner Bros. and Disney, I was working for a Production Company at Universal Pictures, which was owned at the time by Edgar Bronfman Jr, the heir of Seagram Spirits. That was my first glimpse into the spirit industry. ?Later, I started a Production / Management Company O/Z Entertainment with a partner and had a 1st Look Development Deal with Sony Pictures. ?
I then founded Zentertainment Marketing, which advised companies ranging from Citi to Coke to Global Citizen. Zentertainment and I personally most recently were instrumental in launching the Global Citizen Festival in NYC’s Central Park. ?
I had never even dreamed about going into the spirits industry, but was immediately enamored with it. When I first tried STARR, my intrigue turned into an adventure. In some ways I’m still just getting STARRted on!!!
TRL: What does the rum mean to you? What made you fall in love with rum and when did it happen?
When I first tried STARR, it was love at first sip! I realized that to drink it, I had to create a brand to export it and share it with others. Like most people (especially Americans), I had only tried a few of the mainstream rum brands. Now I’ve tried over 200 different rums and learned to love the category I knew nothing about. It’s so dynamic and versatile. There is a type of rum for everyone. ?
TRL: Three essential characteristics that define the rum according to your perspective.
I think Paul Pacult said it best in our very first review he wrote for Wine Enthusiast: “Chic, Racy & Delicious.” Superb / Highly Recommended (90-95).
“Chic” personifies our brand. Our unique, eye-catching red bottle is inspired by the peaked, volcanic mountain overlooking our sugar estate and a shape used during prohibition to smuggle liquor in from Europe as perfume. The rum itself elevates both classic and exciting, innovative cocktails but is sophisticated enough to drink by itself with ice.
“Racy” is the spirit of our company. From believing we can create the World’s first Ultra-Superior Light Rum while helping further foster African Economic Development. The dry style of our rum is not like the more common sweet Caribbean rums. Plus STARR has a subtle yet complex flavor profile that is a chameleon. Different flavors of the rum like the cherry and vanilla become highlighted depending upon what you mix with it. STARR and Coke taste like cherry Coke! ?People often criticize me for even recommending serving such a fine rum with Coke, but hey, we are racy. If you want to drink rum and Coke, it will be the best Rum and Coke you have ever tasted! I love it!
“Delicious” Ultimately, this is all that matters. Whether it is enjoyed by itself with just ice or in a complex concoction, some brilliant mixologists created, STARR drinks are delicious! Even people who say they don’t like rum appreciate STARR after tasting it. I’ve always joked that STARR is a “gateway rum” that brings drinkers into the category. ?
TRL: What is the most important contribution you have made to the rum industry?
I think that is TBD. I was honored that Noah Rothbaum credited me in his incredible book, The Business of Spirits, for being one of the people pioneering the super-premium light rum category that has never existed before by creating one of the first ones to hit the market. When I launched, everyone told me it would never work. No one would pay premium prices for light rum. Diageo launched Oronoco and Moet-Hennessy launched 10 Cane. While we may be small, unlike those brands, we are still around and continue to grow. That’s ultimately because STARR is delicious and most of the people who have tried it love it. ? ?
Additionally, from the onset of founding STARR, I wanted our company to be both socially and environmentally responsible. We are helping lead the charge in the rum industry to do so. We are just continuing to do what the distillery has done since it opened in 1926. Whenever I hear about a new rum company or one of the oldest ones adopting new initiatives that share our values, I do not take the credit for it but merely celebrate that they are doing so. It is good for the category, but more importantly, the right thing to do. We constantly try to identify ways we can be a better company without ever compromising the taste and quality of the rum itself. ?
TRL: Benefits that the rum industry has given you.
Being more open-minded. As I said before, if you told me 20 years ago that I would start a rum company, I would have said that would never happen. I hate rum. In some ways, I created the brand for myself. While I was initially our #1 customer. I’m glad that has now changed and we have numerous avid fans. I also really feel a part of the rum community along with other producers. There are so many styles and types of rum made all over the World. I wish I had discovered rum and its diversity before I entered the industry. For much of my life, I did not know what I was missing. Collectively, I think it is fair to say that all rum companies want to make rum overall get the respect it deserves for being such a rich and varied spirit more so than any other one. There’s a reason historically it has been and still is today one of the top-selling spirits in the World. ?
TRL: What’s another thing you are passionate about besides rum? Why?
I am extremely passionate about all things in Africa. As I always say, Africa is one of those places that breaks your heart and inspires you at the same time. While it is unrivaled when it comes to natural beauty and its abundance of natural resources, for me, what makes Africa special is the people. Very few people know that Africa is the most ethnically diverse place on the planet. It gives me immense pride to in my small way to help Africa and its people realize its potential. Beyond working with fair labor partners there, I sit on various Boards of NGO’s that in one way or another benefit Africa. Plus, we dedicate 95% of our promotional cases to numerous non-profit events to support their efforts that service both Africa and the communities where STARR is sold. ?
Since I got my start in entertainment and my other company, Zentertainment is still very active, the entertainment industry is my other passion. I love producing films, series, music festivals, etc. ?I now view entertainment more than my side hustle instead of looking at it as my primary business to support myself. I love telling stories and creating experiences for people. Now I look at entertainment, like STARR, as a vehicle to give people a way to take a break from their everyday lives and the headaches that come with it to relax and enjoy themselves. Take their mind off of everything. Whether that is watching a powerful film that moves you falling down the rabbit hole binge-watching a series or just checking out some amazing bands and enjoying a nice day at a festival, my hobby is to make other people have fun. Ideally, drinking STARR rum while they do so.
TRL: What is your favorite place for drinking rum?
Anywhere they serve STARR. Seriously, while I think rum is best enjoyed outside—whether at a street café in NYC or a restaurant on a beach overlooking the water or a rooftop pool downtown in a major city, I also love sipping rum in a dimly lit cocktail bar or cozying up to a fire on a cold, winter night thinking about being in the warm sun somewhere. ? ?
TRL: Favorite drink + Recipe
STARR mojito. STARR makes the best mojitos! While I’m biased, I invite you to try one and judge for yourself. When the mojito’s popularity was resurrected shortly after we launched around 2005 and 2006, people said it was a fad and would not last. For me, the mojito, like a margarita, has been elevated from a cheap sugary drink to a work of perfection when made with an exceptional rum like STARR by a skilled bartender. ?
STARR is so smooth that even a novice at-home wanna-be mixologist can make a STARR mojito taste delicious. You don’t have to cover up the taste of the rum, but STARR’s subtle yet complex flavor profile makes it the ideal rum for a mojito. Again, tasting is believing; not my words. The main problem with mojitos is that many people who order them to do not even know they are made with rum. ?
STARR “Muddle-less” Mojito
Shaken not muddled ?
2 oz STARR Ultra-Superior Light Rum
1 oz fresh lime juice
8-10 mint leaves
? oz simple syrup (or 2 teaspoons of sugar)
Top Soda Water
Clap the mint in the palm of your hand, tear the mint in half, and toss it in a shaker or glass. Add STARR rum, lime, simple syrup & ice. ?Shake or stir vigorously. Garnish with a mint sprig and lime wedge.
TRL: Why is it important to educate the rum consumer?
Again, since it is often the first spirit people drink, they do not realize how rich and varied rum is. As I have been known to tell people, this is not the rum you drank in your youth. From bartenders to brands, the more we can work together as rum fans, we can convert people to see the light as we have done. The more they learn, the more they understand what makes rum unique and special. ? ?
TRL: Any tips to train the palate and taste a good premium rum?
?I am by no means a connoisseur. My advice would be to not be intimidated. Just take sips and let it linger for a beat to savor the taste instead of shooting it down. I don’t believe in shots unless, of course, you are sipping on one. Try it neat, then on the rocks. When the alcohol chills, it will change the flavor profile and you will taste it. Your taste buds are the judge of what you like. You will either like it or you won’t. If you think something tastes good, you don’t have to be able to break down the components that make it good. You can figure it out as you enjoy drinking it. ?
I have immense respect for those with a trained palate and mine has become more refined over the years. If you want to train your palate, like anything, it is a skill that takes a lot of study and training to develop. ?
TRL: How can the rum contribute to improving the crisis in some countries?
The climate crisis that faces every country is something of an industry. We are in an especially unique vantage point to help through our direct efforts and by leading by example. I would venture to guess that over 90% of the rum in the world is made from molasses. If you think about it, molasses is the byproduct of refined sugar. Instead of discarding it as waste, molasses has been used for centuries to make delicious rums for people to enjoy. That’s the very definition of sustainable development. When they built STARR’s distillery in 1926, there was no power on that corner of the island. They generated their own through the extraction process, making it by definition sustainable. During Covid when the distillery was closed, our partners built a solar farm on the parts of the estate that were not fit for agriculture. Now, instead of simply making our power, the estate is giving back to the grid of Mauritius. For islands like Mauritius and many of the rum-producing places, the sea level rising is an immediate and not existential threat.
On a social level, I’m proud that we were one of the first American companies to participate in the African Union’s New Economic Partnership for African Development (NEPAD) initiative that aims to develop African economies and fair trade jobs by creating products designed for export to be sold around the World.?
TRL: Is the commitment to sustainable development the key to success for the permanence of the rum industry in the world? Why?
I think it is true for not only rum but all industries. ?
TRL: Who would like to meet in the rum industry? What would you say to him/her??
Joy Spence the Master Distiller, for Appleton Rum. I feel like a lot of people say this to her. Like any cliché, it’s a cliché for a reason. While I have not had the pleasure of meeting her yet, I hope our paths cross soon. Beyond just being a remarkable person from what I’ve read and been told, she is one of the best at what she does. Given the inherent connection between Jamaica and Africa, I would love to see what she thinks of STARR. The Mauritian-style rum differs greatly from its Jamaican counterpart. They are both divine in their ways. Often Jamaicans love STARR when they try it. That used to surprise me, but now I realize they just appreciate good rum. I take that as a high compliment as does the wonderful team in Mauritius that makes the rum. ??
TRL: What are your next goals in the rum industry?
Simple. Make rum “cool” and receive the respect it deserves, as is the case for bourbon, tequila, and other spirits. ?
TRL: Plans you have when you leave the rum industry.
Sitting on a beach sipping STARR.
TRL: Why is the role of the bartender important in the rum industry?
The role of the bartender is critical because they are the ultimate ambassadors for rum. When they recommend a rum or a cocktail made with rum to someone who is maybe skeptical and thinks they don’t like rum, they introduce them to rum and something new and exciting they never knew they liked. We, as rum makers and marketers, can push as much as we want. But, when someone is bellied up to the bar and tries it based upon the bartender’s recommendation, that brings someone new into the fold who hopefully will then begin to discover other rums as well. ? ?
TRL: What is your advice for new generations in the rum industry?
Taste is king. People get too caught up in everything about how it is made and what makes it different. Focus on making sure it tastes good. ?
TRL: How can people learn more about you? Website? Social media page?
8th Annual Chicago Rum Festival Returns? with a Focus on Education
April 20, 2024 at Logan Square Auditorium
The 8th Annual Chicago Rum Fest is back and better than ever, bringing together rum lovers and trade professionals from all over the country on April 20, 2024, at Logan Square Auditorium (2539 N Kedzie Blvd, Chicago, IL 60647). This year's event promises to be a one-of-a-kind experience, featuring premium rum expressions poured, speaker programing, entertainment, and more.
The USA is considered one of the most important countries in the entire rum industry. Before the American Revolution, rum was the most consumed spirit, and now experiencing a renaissance. The Rum Lab team produces the Puerto Rico Rum Festival "Taste of Rum", Miami Rum Congress, California, New York, LA Rum Fest, San Francisco Rum Fest, and the Chicago Rum Festival. Each event attracts hundreds of people from trade, rum aficionados, tourists & locals.
The state of Illinois is one of the largest rum consumer markets in the USA. This year, attendees can sample two Illinois-based vendors, Star Union Spirits and Chicago Cane Collective.
Seminar highlights: ?
Transcontinental Aging (2:45pm) - Climate, weather, barrel types, and extensive travel are challenges for rums from all over the world to create distinctive profiles, from the Caribbean or other countries to France or Spain.
Le Décollage – Cane Rules Everything Around Me C.R.E.A.M (4:45pm) - Welcome to the Jungle of newly discovered centuries old styles of cane spirits, from trailblazing Rhum Agricole, to Aguardiente de Cana.
The Importance of Puerto Rican Rum for the Spirits Industry (3:45pm)
Haitian Rhums & Culture (5:45pm)
Time to choose The Ultimate Brand Ambassador and The Ultimate Rum-Bartender 2024
Rum lovers everywhere, your time has come to help choose the ideal candidates. The Ultimate Awards platform is ready to receive your votes to determine who deserves to take home the title of The Ultimate Rum Bartender 2024 and The Ultimate WLR Rum Brand Ambassador 2024.
Simultaneous, but different
The Ultimate Awards team is working hard to run both competitions simultaneously, which although they share some aspects, are different from each other.
The Ultimate Rum Brand Ambassador 2024 is a competition organized through Women Leading Rum, a platform that celebrates the creativity, vision, leadership and advancement of women in the rum industry. On this occasion and on the occasion of the Women Leading Rum. Europe Conference 2024, its organizers wanted to recognize the work of brand ambassadors who are dedicated to spreading the values and flavors of different rum brands.
10 women are competing for the title: Ana Suárez Castrillón (Ron Barceló), Ashera Goonewardene (Bounty Rum and Rhm Clemént), Magdalena Reske (Colours of Rum), Marie "Zee Bat" (Ron Millonario and Rum Nation), Emily Gosling Bulters (Goslings Rum), Susana Ortega (Brugal Rum), Karen Alvarez Seijas (Flor de Ca?a Rum), Gosia Kolbowska (SelvaRey Rum), Daniella Sanchez (Dos Maderas Rum) and Adrienne Stoner (Maison Ferrand).
Each of these women has worked hard to raise awareness of their brands by showing exceptional commitment to representing them at events, social media, collaborations with bars and restaurants, and participation in fairs and festivals. Their authenticity and ability to connect with the public earned them a spot in this select group of candidates.
According to the public and the experts
In the case of The Ultimate Rum-Bartender, the competition will be a little different as two prizes will be awarded: one to whoever receives the most votes from the public and another assigned by a jury of specialists from the rum world, who will evaluate the expertise, experience and merits of the selected bartenders.
The jury will be composed of:
-Danilo Oribe: World cocktail champion (IBA, WFA, FBA).
-Francisco "Don Pancho" Fernández: Rum master with more than 50 years of experience.
-Nestor Parra: Venezuelan bartender with extensive experience behind the bar and organizer of the event.
-Federico Hernández: CEO of The Rum Lab and author of "Puerto Rico Rum-Clopedia".
-Pablo Mosquera: Rum bartender and event organizer.
-Juan Manuel Antelo: Founder of the Barman Academy.
This group of experts will have the task of evaluating the 25 bartender candidates who were chosen based on their merits and career. They are:
-Karl Candell (El Salvador)
-Jesús Aguirre (Panama)
-Cristian López (Paraguay)
-óscar Lafuente (Spain)
-Andrés Valencia Ariza (Ecuador)
-José Noya (Bolivia)
-Mauricio Fernández (Chile)
-Martín Tummino (Argentina)
-David "Mashynne" Rivera (Puerto Rico)
-Jeffrey Fares (Honduras)
-Iván Mu?oz (Colombia)
-Luis Claudio Sim?es (Brazil)
-Antonio Naranjo (Spain)
-Javier Antonio García (Nicaragua)
-Augusto R. Santos (Honduras)
-Felipe Fiel (Ecuador)
-José Ortega (Puerto Rico)
-Marvin Shal (Belize)
-Cheytan Báez (Dominican Republic)
-Abraham Urdaneta Conteras (Aruba)
-Gastón Santandreu (Uruguay)
-Mario Alarcón (Guatemala)
-Jair Rosas (Peru)
-Rihder Fuentes (Cuba)
-Graciliano Pereira (Venezuela)
The Ultimate Rum-Bartender 2024 award will recognize that bar professional with exceptional skills in creating rum cocktails, as well as knowledge and passion for this spirit.
Two weeks to vote
Voting began this Monday, April 8, 2024 and will run until April 20, 2024. To vote, simply log on to TheUltimateAwards.com and follow the instructions.
The winners will be announced on April 22 through the contest's social networks (@UltimateAwards on Instagram and The Ultimate Awards on Facebook) and the awards will be presented at the Spain Rum & Gin Expo, to be held this April 26 at the MEEU, Estación de Chamartín, located in the city of Madrid, Spain.
Best of luck to all participants!
CELEBRATING THE SOTL GLOBAL MOVEMENT AND RUM CULTURE IN DALLAS
Staff – 04/08/2024 – Cigar Journal
At the heart of the SOTL Global Movement, Dallas stood out with its strong sense of excitement and friendship during the TEXAS RUM FEST & SGM VIP Event. This unique and lively event brought together lovers of fine cigars, premium rum, and a strong sense of community.
This gathering was all about celebrating the Sisters of the Leaf (SOTL) Global Movement & Dallas Smoke Fest, which focuses on the appreciation of cigars and creating a welcoming, diverse environment.
The highlight of the event was not only the amazing camaraderie but also the introduction of Karen Berger cigars, which added a special touch to the rum tasting experience. The atmosphere was one of inclusivity, with everyone playing a part in celebrating the global cigar culture.
Key to the event’s success were remarkable women like Roz, who made history by opening the first African American woman-owned cigar lounge in Texas. Her lounge’s friendly vibe set the perfect tone for the entire gathering. “I’m so excited to announce that I’m also the 1st African American Female to EVER be in the State Fair of Texas with a Cigar Lounge and also my cigar lounge has been nominated by SOTL Global Movement as one of the 1st ?women friendly lounges in the world.
The Co hostesses of SOTL Global Movement at this event were the dedicated members of SGM:
Maya Queen, CCST, whose passion for Cigars started at an early age, as her grandmother used to smoke her Cigars while telling her stories. She is ?currently Brand Ambassador for Karen Berger Cigars in Texas. “ I love my role as Ambassador & active member of SOTL Global Movement cause ?I’m able to network and connect with people and to empower more women” Maya says
Michelle Austin, a CCST, owner of CUT LIGHT and SMOKE. Though her side job offers 10 different types of cigars and she has a merchandise line that offers hats, t-shirts, glassware and tumblers, and a line of cigar accessories including custom cigar boxes and ashtrays. From there donated the material at the event of SOTL Global Movement. “I want to continue building the elegance, relaxation, “Boss”, and empowerment feeling around my brand”
MsToya Goody, is the passionate founder of CIGARZARESEXY, a luxury cigar and lifestyle blog, which ?provides a platform for women to explore their love for cigars in style. “Through culture, education, and support, we aim to empower fellow women to achieve their goals within this incredible industry” she says
The event also featured special guests like 2 of the first SOTL Global Movement Members: ?Keya McClain & Αyoke Milan.
Keya is a poet, author, journaling coach, speaker and podcast host working with women to thrive and heal by journaling, poetry and storytelling. ” My experience at the Rum Fest and SOTL Global Movement event was inclusive, positive and supportive. Being in the company of passionate and dedicated women is always an inspiration. Frederico was welcoming, inviting and generous, which created an atmosphere of overwhelming support and enthusiasm. Roz was a great host and a true empowering leader of the cigar community and culture”
Ayoke, CCST, is the founder of Smokin Haute, SDA, Global Connection, Cigar Feen, KEY Builders. She says:
“ I am deeply grateful for the opportunity to join the Sisters of the Leaf Global Movement in fellowship. The day was filled with wonderful experiences, beginning with the Texas Rum Festival featuring tastings and enriching educational sessions. The evening was particularly special as we celebrated Roz Stafford-Grady, a remarkable SOTL member and the proprietor of the Smoking Jacket Cigar Lounge. Dr. Anastasia Posmiadi, I extend my heartfelt thanks to you for inviting me to be a part of your vision. Your dedication to uniting the Cigar Culture and honoring the exceptional women who contribute to it worldwide is truly inspiring. It was an honor to witness the spirit of unity and camaraderie that defines this movement”.
Worth ?mentioning ?is the vibrant contributions of the Special Guests, The organizing committee of Dallas Smoke Fest, whose energy and enthusiasm played a significant role in making the event memorable.
Figures such as Tommi, Kimoni, Sher Juan, and Nikki were singled out for their impactful presence.
“To be part of the introduction of two brands created by two women who dared to act on a dream, SOTLGM and Smoking Jacket, was a phoenomnial experience. ?Michelle, Toya and Maya were phoenominal hostesses as well. ?I look forward to what each of you will accomplish next!” ?~Tommie of Cu’Noma Cigar Lounge~
“I think the Texas Rumfest was awesome. I’m not a big drinker but I enjoyed the tasting. I would advise everyone to eat something before you go lol. But overall we met some great people ? n I loved the way SOTL celebrated my sis Roz The Queen of The South. Epic day for the culture” Kimoni Jackson, CEO Dallas Smoke Fest
“The Texas Rum Festival exceeded my expectations, transforming my perspective on rum despite not being a regular drinker. With a diverse array of offerings to suit every taste, the event enlightened me on rum production and various facts previously unknown to me. I wholeheartedly recommend attending next year’s festival for an enriching and enjoyable experience. The SOTL Global Movement celebrated the owner of Smoking Jacket Cigar Lounge, Roz, with an unforgettable after party filled with heartfelt speeches, rum tasting, and premium cigars. It was a night of camaraderie and appreciation” Nikki Morris, Absolute Cigars
“I had a phenomenal time at the Texas rum festival. I have a new found appreciation for Rum. Thank you to The SOTL Global Movement for inviting me to this amazing event. I can’t wait to see what’s ahead for our culture and what involvement and impact the SOTL will have not only in our Dallas Community but all round the world” SherJuan Mims, Heart of a Lion Cigars
“The collaboration between SOTLGM and DSF is one that was not only a dream, but a success. Not successful in the monetary sense… but successful in networking, business ventures and most of all…SUPPORT. We are humbled and grateful and partners forever”! Chere Smith, ? Co-owner Dallas Leaf LLC
Federico J. Hernández, the founder of The Rum Lab, is renowned for his passion for rum culture, serving as an exceptional host of the Texas Rum Fest and a significant partner of the SOTL GLOBAL MOVEMENT. His friendly nature and unique smile make him stand out in the industry.
This Dallas event wasn’t just a local celebration; it was a significant moment for the global appreciation of cigars and rum, promising a future filled with diversity, unity, and shared passions.
US Spirits - Ready To (Not) Drink?
Source: Jefferies
April 9, 2024?
The key debate on spirits is whether weak trends in the US are an aberration or a tipping point. The downgrade cycle from destocking will inevitably come to an end however what if growth does not return to trend once destocking is done? This report considers the risk that spirits based RTDs weigh on industry growth. Given this headwind, our preference is for RI over DGE given the more diversified footprint, self-help and cheaper valuation.?
Where is the debate on spirits? After the weak share price performance in 2023 and continued softness into 2024, investors with duration are quite rightly running the ruler on spirits. The key debates are: (1) When is the earnings downgrade cycle done; (2) What is the right level of growth med-term??
US pandemic gains have been given back. The US is the largest market for EU spirits companies and a key differentiating factor vs other staples. Our analysis suggests that the pandemic gains have been given back. We estimate distilled spirits CAGR volume 2019-23 +1.5%, vs pre-pandemic volume trend 2009-19 +2.6%. Therefore, the question is why are spirits not growing??
What if growth does not return to trend once destocking is over? We believe the three key obstacles to pre-COVID trend growth are (1) Destocking; (2) Spirits share of throat tailwind - perhaps less pronounced; (3) Spirits based RTD growth. This is driving an air pocket for spirits growth.?
What does this mean for stock selection? Preference for RI over DGE. We believe that we are at the beginning of the end of the downgrade cycle. However, given the risk of a near term growth hiatus in the US, our preference is for RI over DGE. This reflects a more diversified footprint, self-help and cheaper valuation. If DGE's US growth is flattish, this is a -300bps impediment to achieving the 5-7% org sales framework; if RI's US business is flattish, this is a c.-100bps impediment to achieving 4-7%.?
1. Destocking cycle needs to come to an end. Spirits are slow-moving (not fast-moving) consumer goods. This lends itself to stocking up in good times and destocking in bad as inventory in the supply chain shrinks. Inventory levels are still above historical levels - see here. We do not anticipate that destocking will be a discussion point in 2025 however the hangover could linger into cal 2H.?
2. Spirits tailwinds less pronounced. (1) Share of throat - spirits has been on a 20-year bull run, increasing share of throat from 29% in 2000 to 42% in 2023. While we believe these gains will remain sticky, the low-hanging fruit has arguably been harvested; (2) Price - given growth is more scarce and as excess inventory is cleared, this argues for less price (3) Mix - whilst premiumisation trends will persist long term, we see early signs of downtrading in certain categories, such as tequila.?
3. Spirits based RTDs - detracting from growth. Spirits based RTDs account for c. 7.5% of total spirits category in 2023. By 2027, they are estimated to account for as much as 20% of total spirits. Note, this includes both traditional ready-to-drink and ready-to-serve (ie pre-mix cocktails). Risks include (1) Fragmentation risk given new to world brands (2) Quality considerations - some of the new entrants are coming in with poor quality, which can harm consumer perceptions of spirits (3) Race to the bottom - growth of private label options, risk of commoditising the category. We estimate that the category is roughly a fifth of the size of malt based seltzers, which argues for further headroom for growth. Until the category rolls-over, this could hold back breathing space for distilled spirits to return to its historical run-rate.
Cocktails continue to rise in the US (Additional Coverage)?
By Louis Thomas
April 8, 2024?
Both the value and volume of cocktail sales in the US on-trade increased in the last quarter of 2023, according to the latest data from CGA by NIQ.?
The data reveals that across Q4 of last year, there was a 5% year-on-year increase in cocktail value velocity, and a 6% increase in the average number of cocktails sold at venues (1,192). Nevada, home to casino capital Las Vegas, is still leading the way when it comes to sales, selling more than twice as many cocktails as the US average.?
The average national price of a cocktail has also increased by a dollar from where it was in Q4 2022, rising to US$13. On average, the drink to command the highest price was the tiki bar classic, a Mai Tai.?
As for what consumers are ordering the most, the Margarita remains the dominant cocktail choice, making up more than a fifth of total cocktail sales, followed by the Martini and Moscow Mule.?
Indeed, the rise of Tequila continues, with the agave-based spirit making up 34.1% of cocktail base sales by value, a 1.8% year-on-year increase. Meanwhile, vodka’s share declined by 1.3% to 28.2%. Perhaps surprisingly, wine-based cocktails now appear to be bigger than ones incorporating rum, with the former increasing by 1.2% to have a 6.8% share.?
Matthew Crompton, CGA by NIQ’s regional director for North America, commented on the findings: “After an excellent final quarter of last year, the cocktail category is well placed for more good growth throughout 2024. While some cocktail choices like the Margarita remain evergreen, this part of the market never stands still, with subtle but significant shifts in consumers’ preferences.”
US Spirits – De-premiumisation Tracker April 2024?
Source: Jefferies
April 4, 2024?
We refresh our "de-premiumisation tracker" for the US spirits industry for the four weeks to 23 March.
RTDs continued to drive volume growth in NieslenIQ, while seven categories registered yoy volume declines, with particular signs of pressure in Cognac, Scotch, Irish Whiskey and Rum.
While industry growth continues to lag the historical 4-5% run-rate after the COVID super-cycle, we believe that the long-term category tailwinds remain unchanged.?
Industry growth normalising after COVID super-cycle. 2023 was a reset year for US spirits, with DISCUS data (see our note here) suggesting industry vols +1.2% (2022 +4.8%), value +0.2% (+5.1%), and price/mix -1.0% (+0.3%). Backing out RTDs/cocktails, we estimate distilled spirits vol/value -3.3%/-1.5% with price/mix +1.8% given category tailwinds. Timing of reversion to historical trend c4-5% is unclear; distilled spirits volumes appear to have largely corrected vs trend (2019-23 CAGR 1.5% vs 2009-19 +2.6%), however value is running slightly ahead (2019-23 CAGR +5% vs 2009-19 +4.5%). We believe the long-term drivers of growth, including premiumisation and share of throat tailwinds, remain unchanged.
Declining price/mix in most categories. Price/mix slowed down for nine categories in December, with Tequila (+4.3% vs prev +4.5%), Cognac (-2.5% vs -2.1%) with Remy +0.7% vs +2.2%, Gin (+3.4% vs +4.9%), Scotch (+1.4% vs +3.1%), Vodka (+1.7% vs +2.7%), Rum (+3.0% vs +3.7%). Price/mix improved for Bourbon (+5.9% vs +5.6%) and Canadian Whisky (+3.4% vs +1.6%).?
Tequila trends - slower month and some pressure on pricing. Tequila sales growth was +9.9% in March (vs +10.3% in February), with volumes +5.7% (vs +6.0%) and price/mix +4.2% (vs +4.3%). Casamigos saw some recovery (value +2.4% vs +0.4%) however price/mix continues to slip (-3.3% vs -2.9%). Don Julio remained strong (+19.8% vs +19.1%) with slight price/mix improvement (+0.3% vs +0.1%). Avion was the biggest decliner in absolute value within the category. We detect signs of discounting; Kendal Jenner's brand 818 has reset price points, with large volume growth +79.3% but price/mix -35.4%.?
Scotch - a softer month. Price/mix for scotch was lower at +1.0% (vs +1.4%), while volumes decreased -8.4% (vs -4.7%). Buchanan's declined -7.9% (vs +8.0%), as the launch of pineapple in Feb 2023 has now been cycled. Johnnie Walker also had a weaker month (-6.8% vs -3.4%). Canadian whisky brand Crown Royal continued its momentum (+28.7% vs +13.0%) with the benefit of Crown Royal Blackberry.?
American whiskey - Premiumisation trend intact. Premium brand Blanton led category growth and outperformed mainstream brands Jim Beam (+1.3%) and Jack Daniel's (-2.3%).?
Cognac - performance remains subdued. March (cognac value -8.8%) saw some deceleration vs February (-7.3%), with negative volumes (-5.5%) and price/mix (-3.3%). Hennessy (Mar -4.1% vs Feb -2.9%) continued to outperform Remy (-28.3% vs -25.1%), with benefit of having reset price points on VS. Hennessy price/mix -4.1% vs Remy +0.7%.?
White spirits and RTD. Vodka weakness in Grey Goose, SKYY and Ciroc. Tito's continues to drive a large part of category growth. RTD growth continues to be driven by Gallo's High Noon and ABI's Nutrl and Cutwater. Profit exposure to US. c.50% Diageo, c.40% Remy, c.25% Campari and Pernod.
Tanduay to Further Expand Rum Portfolio, Boost Presence in Canada
Staff – 04/08/2024 – EinNews
VANCOUVER, BRITISH COLUMBIA, CANADA, April 8, 2024 /EINPresswire.com/ -- Tanduay’s distribution partner in Canada, Christopher Stewart Wine & Spirits, aims to introduce more of the Filipino brand’s products and further its presence in the country this year.
“Our goals are to keep expanding the Tanduay portfolio available in Canada and increase its presence in our current markets. New government liquor board listings are a top priority as well for us to help make Tanduay more accessible across our country. It takes time, but we are on the right path with our great partners from Tanduay,” said Tyler MacKenzie, Christopher Stewart Wine & Spirits Brand Manager.
Warm Reception for Tanduay Rums
MacKenzie added that the brand, which became fully available in the country in 2023, is still growing.
“Tanduay rums have been well-received, and we are working hard to increase its awareness in all provinces. The Tanduay Asian Gold Rum and Double Rum have been the most popular so far. They are the most favored styles for cocktails and for neat serves,” he shared.
MacKenzie noted that optimism for the rum category in Canada is strong compared to other spirits categories.
“Rum’s strength is the depth of its category. Consumers can find a variety of styles and price ranges, starting with entry level labels to super premium and rare rums of the world that are highly collectible. Rums have a great deal of complexity but are also very accessible. These factors help the category stay relevant and popular even among changing consumer behavior and trends,” MacKenzie said.
Growing the Brand’s International Presence
Marc Ngo, Tanduay International Business Development Manager and Senior Brand Manager, said that Tanduay is further growing its international business.
“This year marks the 170th founding anniversary of Tanduay, and we are excited to continue expanding into other regions, bringing the quality, craftsmanship, and drink experience that have been the brand's hallmarks throughout the years. In partnering with Christopher Stewart Wine & Spirits and other leading distributors from other countries, we are confident that we can achieve our goal of furthering the brand’s reach,” he said.
Tanduay is one of the Philippines’ most enduring brands. Founded in 1854, it continues to be one of the country’s most popular and awarded spirits brands.
The brand is the only Filipino rum to be named the World’s Number 1 Rum for six consecutive years by Drinks International Magazine. It has also received the Brand of the Year Award for eight straight years from the London-based World Branding Awards.
Apart from Canada, Tanduay also recently entered the markets of Australia, New Zealand, Ukraine, and Taiwan. It is likewise available in several states in the U.S., China, Singapore, Qatar, United Arab Emirates, France, Germany, Belgium, the Netherlands, Luxembourg, the United Kingdom, Austria, Poland, Georgia, Armenia, the Czech Republic, and Costa Rica, as of this writing
Tyler MacKenzie
Christopher Stewart Wine & Spirits Brand Manager
+1 778-861-2599
Bacardi Supports Restoration of La Esperanza Park in Puerto Rico
Staff ?– 04/08/2024 – ?3BL Media
Local park of Cata?o, home of BACARDí rum, will be rebuilt for $3.5 million.
Giving back to communities has been part of the legacy of family-owned Bacardi since it began the business more than 160 years ago. In Puerto Rico, home to the world’s largest premium rum distillery and the brand home of BACARDí rum, the Bacardi company has contributed to people and community programs for decades.
Most recently, Bacardi is among the supporters of the restoration and expansion of the community park “La Esperanza” situated on the coastline bay of San Juan in Cata?o and with views to the BACARDí campus.
The Mayor of Cata?o, Julio Alicea Vasallo, along Gabriel Solano, General Manager of Casa BACARDí and the Executive Director Manuel A. Laboy Rivera of COR3 (the Central office for recovery, reconstruction and resilience) have joined forces to mark the kick off of constructions and to promote the park project.
“Bacardi has been in Puerto Rico since the 1960s and we are truly honored to be part of this community development,” says Gabriel Solano, General Manager of Casa BACARDí.
“The reopening of La Esperanza Park is a moment of pride as we welcome projects that bring a positive impact to the local community and to serve as yet another tourist attraction on the beautiful island of Puerto Rico. In 2022, Bacardi and the city hall of Cata?o, revived the local festival “La Feria en Cata?o”, after many years of absence as another effort to give back to the community.
La Esperanza recreational park is an emblematic landmark now on the path to repair, after being neglected for almost a decade and deteriorated after Hurricane Maria in 2017. Ways in which this park will be restored include improvement works on the cafeteria area, the administration building, security guard cabins, gazebos, the electric infrastructure, greener lighting solutions, La Esperanza public restroom facilities, swimming pools and sports courts, playground equipment, footpaths, and sidewalks to enjoy nature.
Bacardi Corporation, part of Bacardi Limited, was founded in Puerto Rico in 1936 and has been manufacturing “the World’s Most Awarded” rum since then. The current distillery, built in 1958 on 127 acres in the town of Cata?o, is the largest premium rum distillery in the world and known as the “Cathedral of Rum”. Since 1961, Bacardí has operated the modern Casa BACARDí Visitor Center, the second most visited location on the San Juan metro, attracting visitors from across the globe to learn about the rich history of the Bacardi family and brand, as well as its unique production.
Find out more about how Bacardi supports communities, visit: https://www.bacardilimited.com/esg/
How a passion for scuba diving inspired one of our favorite rum brands Rum according to a well-traveled distillery owner
Mark Stock – 04/08/2024 – The Manual
Thrasher’s Rum is not your typical spirit company. The D.C.-based rum outfit started in 2018 and is headed by a man who forged an interest in fermented sugarcane while diving around the world.
Thrasher is no stranger to the scene, having run many esteemed beverage programs in the past. The Virginia native grew up spending summer days at his grandparent’s rural house and got his first bartending gig when a barkeep failed to show up for their shift at an Arlington watering hole. The rest is history.
Today, Thrasher has a growing brand that honors a long-established love for rum. Former home experiments in distilling have turned into a full-scale operation overlooking the Potomac River. But it may have never happened without his former life as a waterlogged pursuer of pristine turquoise diving waters.
“Scuba diving has been a lifelong passion of mine,” he says. “I have been diving since my teenage years and became an instructor in 2003.”
Thrasher no longer instructs but fondly reflects on his time in the water and sharing the love with the rest of his family. “It’s been so meaningful to share diving experiences with my wife and son,” he says. “My son is around the same age that I was when I started diving, and I love passing along what I have learned and taking our family to experience some of my favorite diving spots.”
Many of those great spots were in or near prime rum-making zones, close to the equator where sugarcane thrives. “I vividly remember spending many years witnessing picture-perfect sunsets after a long day of scuba diving in the South Pacific, Caribbean, and West Indies, with a neat pour of dark rum in my pruny fingers,” he says. “I have a deep love for the ocean. I wanted to create a rum that, to me, was synonymous with my experiences traveling as a scuba dive master.”
Thrasher says he marveled at the Tiki bars of the South Pacific, the kind where you settle the tab with wet money from your swimsuit. Places like the Rose Inn in Bonaire come to mind. The sleepy bar in the town of Rincon is known for its creole and international food, washed down with the self-proclaimed coldest beer in town and some local rum. There’s no written menu but plenty of convivial patrons and some quality local dishes. Thrasher also loves Restaurante El Moro in Cozumel, which is beloved for its rum-centric cocktails and no-frills atmosphere.
“At Tiki TNT, the three-story rum emporium that also houses Potomac Distilling Company, I created a cocktail inspired by this experience,” he says. “The Wet Money cocktail features tequila, Thrasher’s White Rum, lemon juice, passion fruit, salt water, and Blue Cura?ao, which is meant to represent the crystal clear waters from my diving days.”
The regionality of rum
Bacardi may jump to mind when we think of rum, but there’s a whole galaxy out there, defined by how and where it’s made and ranging dramatically in flavor. Sure, there’s white rum versus aged and spiced rums, but it runs much deeper than that. The sugar source can show a sense of terroir, and because different rum-producing regions have different mandates, the equipment and types of distilling equipment are rarely ever the same, especially where small producers are concerned. Translation? There’s a rum for everybody out there; you need to find it.
“Rum is derived from three main ingredients: yeast, water, and some derivatives of sugar,” Thrasher notes. “The distinct flavor and characteristics of rum come from the sugarcane that is used in fermenting. The style is largely dependent on that rum’s country of origin and its colonizing history, specifically, how sugar is incorporated into the spirit. English-style rum is made from molasses and then aged in oak barrels. Guyana, once an English territory, is home to a favorite rum brand, El Dorado. I like to think that I’m bringing a distinct English Caribbean-style of rum to America, a country that has primarily relied on rum to be imported from other countries.”
There’s not much of a sugarcane scene in the nation’s capital, as you might imagine, but that doesn’t mean Thrasher can’t honor the tradition of rum and even put his stamp on it. “Thrasher’s Rum is unique in that we only use natural sugars and molasses– with zero preservatives. We follow a process that has been a tradition for hundreds of years by using the purest products,” he says. At the distillery and emporium, they grow citrus and herbs and make their way into releases like Thrasher’s Green Spiced Rum.
How to understand rum better
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Today, Thrasher has a growing brand that honors a long-established love for rum. Former home experiments in distilling have turned into a full-scale operation overlooking the Potomac River. But it may have never happened without his former life as a waterlogged pursuer of pristine turquoise diving waters.
“Scuba diving has been a lifelong passion of mine,” he says. “I have been diving since my teenage years and became an instructor in 2003.”
Thrasher no longer instructs but fondly reflects on his time in the water and sharing the love with the rest of his family. “It’s been so meaningful to share diving experiences with my wife and son,” he says. “My son is around the same age that I was when I started diving, and I love passing along what I have learned and taking our family to experience some of my favorite diving spots.”
Many of those great spots were in or near prime rum-making zones, close to the equator where sugarcane thrives. “I vividly remember spending many years witnessing picture-perfect sunsets after a long day of scuba diving in the South Pacific, Caribbean, and West Indies, with a neat pour of dark rum in my pruny fingers,” he says. “I have a deep love for the ocean. I wanted to create a rum that, to me, was synonymous with my experiences traveling as a scuba dive master.”
Thrasher says he marveled at the Tiki bars of the South Pacific, the kind where you settle the tab with wet money from your swimsuit. Places like the Rose Inn in Bonaire come to mind. The sleepy bar in the town of Rincon is known for its creole and international food, washed down with the self-proclaimed coldest beer in town and some local rum. There’s no written menu but plenty of convivial patrons and some quality local dishes. Thrasher also loves Restaurante El Moro in Cozumel, which is beloved for its rum-centric cocktails and no-frills atmosphere.
“At Tiki TNT, the three-story rum emporium that also houses Potomac Distilling Company, I created a cocktail inspired by this experience,” he says. “The Wet Money cocktail features tequila, Thrasher’s White Rum, lemon juice, passion fruit, salt water, and Blue Cura?ao, which is meant to represent the crystal clear waters from my diving days.”
The regionality of rum
Bacardi may jump to mind when we think of rum, but there’s a whole galaxy out there, defined by how and where it’s made and ranging dramatically in flavor. Sure, there’s white rum versus aged and spiced rums, but it runs much deeper than that. The sugar source can show a sense of terroir, and because different rum-producing regions have different mandates, the equipment and types of distilling equipment are rarely ever the same, especially where small producers are concerned. Translation? There’s a rum for everybody out there; you need to find it.
“Rum is derived from three main ingredients: yeast, water, and some derivatives of sugar,” Thrasher notes. “The distinct flavor and characteristics of rum come from the sugarcane that is used in fermenting. The style is largely dependent on that rum’s country of origin and its colonizing history, specifically, how sugar is incorporated into the spirit. English-style rum is made from molasses and then aged in oak barrels. Guyana, once an English territory, is home to a favorite rum brand, El Dorado. I like to think that I’m bringing a distinct English Caribbean-style of rum to America, a country that has primarily relied on rum to be imported from other countries.”
There’s not much of a sugarcane scene in the nation’s capital, as you might imagine, but that doesn’t mean Thrasher can’t honor the tradition of rum and even put his stamp on it. “Thrasher’s Rum is unique in that we only use natural sugars and molasses– with zero preservatives. We follow a process that has been a tradition for hundreds of years by using the purest products,” he says. At the distillery and emporium, they grow citrus and herbs and make their way into releases like Thrasher’s Green Spiced Rum.
How to understand rum better
“The biggest stereotype about rum is that it’s a sweet, sugary spirit,” admits Thrasher. “I often hear people say that they don’t like rum because it has so much sugar or that they don’t like rum-based cocktails because they are crazy sweet. But rum is incredibly versatile, complex, and diverse. Rum can be refined. It can be aged. It is complex, and there are just so many different styles.”
How does he like to enjoy rum? “Ideally, anytime I have a glass of rum in hand, I’m near the water,” he says. “I love the versatility of rum. For me, the style and age of the rum dictates whether I am enjoying a rum-based cocktail or simply rum on the ice with a single ice cube.”
Thrasher hopes the rum renaissance continues and looks forward to more artisanal producers who share a genuine appreciation of the craft. In the meantime, we can appreciate rum more just by seeking out better brands and sampling the many varied styles.
We’ve got the rum sector covered. Check out our guide to Hawaiian rum and the best resort drinks you can make right at home (for the ultimate staycation). And if you want to follow Thrasher’s lead, get into the water after checking out our scuba diving certification breakdown.
Spirit of Saint Lucia contest expands to Midwest
Ted Simmons – 04/04/2024 – The Spirits Business
The cocktail competition, which debuted in Miami earlier this year, is set to hit Chicago later this month.
The second edition of the Spirit of Saint Lucia cocktail competition will take place on 20 April at the Chicago Rum Festival, to be held at Logan Square Auditorium. The competition is sponsored by Reàl Ingredients, a cocktail syrup manufacturer, and Saint Lucia-based Bounty Rum.
As with the inaugural competition, held at the 2024 Miami Rum Congress in February, winners will receive US$1,500 and a trip to Saint Lucia. Second place will be awarded US$500 with third place receiving US$225. Elizabeth Diaz Hernandez from La Cumbancha took first place in Miami.
Registration is open to all bartenders until 8 April. Participants are expected to exhibit creativity through unique cocktails that use Bounty Rum as the base spirit alongside a Reàl Ingredients product. The competition, to be held from 11.45am to 2pm CDT, is being dubbed a ‘harmonious fusion of Caribbean heritage and modern mixology,’ with participants expected to draw inspiration from Saint Lucia’s diverse culture and natural beauty.
Full rules and submission guidelines can be found via Bounty. The eight finalists to compete live will be announced via social media on 10 April.
The eighth annual Chicago Rum festival, also known as the Midwest Rum Festival, will take place from 2pm to 7pm CDT. Attendees will be able to participate in the grand tasting and seminar events, with four independent sessions held throughout the day. Tickets can be purchased at the Chicago Rum Festival website.
The Portsmouth Distillery Co picks up silver award at People's Choice Spirits Awards for 3-year-old rum
Sohie Lewis – 04/05/2024 – Portsmouth
The distillery, located in Fort Cumberland, has become one of the most popular distilleries in the Hampshire area, known for its innovation when it comes to rum. This year the team has bagged an award for their three-year-old rum which is a first for England. The People's Choice Spirits Awards were founded in 2020 and the aim is to recognise some of the best businesses in the alcoholic drinks industry. The rum was shortlisted for the 'Rum: Local Heroes: UK Based Production category'. An award ceremony, which took place in Manchester at the end of last month, recognised the rum with a silver award - and the team are over the moon.
Vince Noyce, one of the owners of the distillery, said: “It is always fantastic when you get any sort of accolade or award so it must mean we are doing something right.
“We don’t enter into many awards because some people put everything into awards but we want to focus on the products.
“This rum is the first in England - it really is a labour of love.”
The distillery will also be launching a brand new five-year-old rum this summer, which will be another first for the country.
Vince added: “I think we have about 700 bottles in the first year and then we will have more the next year so it is very exclusive.
“Personally it feels like a fantastic achievement -It feels like time has flown by. We lost two, three years with Covid and whilst everyone was struggling to keep afloat, the rum was still sitting there and now we are seeing the fruits of our labour.”
Antigua and Barbuda to host historic Rum in the Ruins tour this Friday
Monica Walker – 04/05/2024 – WIC News
While asking everyone to be a part of this historic yet unique event, the Tourism Authority said, "Discover the fascinating remnants of history amidst the scenic backdrop of colonial ruins while indulging in the finest rum blends crafted to perfection."
Antigua and Barbuda: The Tourism Authority of Antigua and Barbuda is all set to host the Rum in the Ruins, starting this Friday at the English Harbour, Antigua. The event will be a great chance to explore the history of the Twin Island nation and taste the local rum.
While asking everyone to be a part of this historic yet unique event, the Tourism Authority said, “Discover the fascinating remnants of history amidst the scenic backdrop of colonial ruins while indulging in the finest rum blends crafted to perfection.”
The event will take place every Friday, and the entry ticket price is $25 USD. The authority noted that attendees will get the chance to experience the rich heritage of the Caribbean as they delve into the stories of the past. They will be guided by knowledgeable experts throughout the tour.
“Don’t miss out on this unique opportunity to immerse yourself in history while enjoying the finest rum blends. Cheers to new experiences,” further stated the Authority.
The Tourism Authority also added that from the allure of historic architecture to the exquisite flavours of local rum, the tour promises an unforgettable adventure for everyone.
As the spaces are limited, the Authority asked everyone to reserve their spot at the earliest by contacting 268-481-5052. People can also email at [email protected] for more details regarding the tour.
This unique Rum in the Ruins tour is hosted frequently as it features a story revolving around rum’s seductive history, which is linked to the story of Antigua. The tour will also feature stories about Nelson’s Dockyard and the historic British military sites in the surrounding hills.
Enlightening information, amazing scenery, a beautiful sunset and a glass of sweetened spirits combine for what is turning out to be one of the best tours on the island.
Every time, the authority gets huge response to this tour which is why is returns very early to provide the citizens a chance of having an amazing time.
Cocktail of the Month: Eclipse Rum Punch
Jody Kurash – 04/03/2024 – Georgetowner
America will seem to forget about hate and politics for about five minutes on Monday afternoon. From Austin to Akron; from giant cruise ships off the Mexican Riviera to quaint canoes on New York’s Finger Lakes; From Hot Springs, Arkansas, to mighty Niagara Falls … ?People paused and gazed at the sky. Folks joined together in awe as the moon blocked out the sun’s light over a strip of the USA, resulting a spectacular sight. Those in the path of totality were treated to near darkness mid-day and a view of the radiating solar corona. ?
While an eclipse is a rare site to see, over one hundred years ago, the West Indies was treated to an astronomical double feature in 1910 with the occurrences of a total solar eclipse and the passage of Hailey’s comet over the skies of Barbados. To celebrate, the Bajan people did what they do best—make rum. ?
Eclipse rum, Mount Gay’s flagship brand was first bottled in 1911 in Barbados and named after the cosmic events of the year before. Today it’s still one of the most interesting rums around. ?
Years ago, I had the opportunity to tour Mount Gay visitor’s center and learn how their rums are crafted. Their spirits are forged from molasses and water dredged from a 300-foot deep well that has been filtered through natural coral, then distilled in copper pot stills which operate in batches?and column stills which operate on a continuous?basis. The distillates are aged in charred oak barrels imported from Kentucky, which were once used to make bourbon. Eclipse rum is a mixture of these continuous and double-distilled rums.
When blended, Eclipse boasts clear tones of banana, summer fruit and vanilla with hint of caramel and almond. The organically filtered water imparts a crisp, clean taste while the barrel-aging process brings a distinctive oak flavor and golden color. ?
The Mount Gay brand is well-known throughout the world and a document dated Feb 20, 1603, makes it the world’s oldest continuously operating distillery. The isle’s long history with rum can been seen in the local rum shops (or bars) that seem to populate every turn. These are places where people gather day and night to share stories, commiserate, carouse and solve the world’s problems. Young and old alike put their differences aside and mingle in harmony.
Having been barreled for only two-years, Eclipse rum is lighter and more accessible than the company’s heavier and longer-aged rums. If you visit Barbados, this is the rum you’ll see everywhere. Whether you’re in a five-star resort or at a tiny shack perched on the shore, you’ll see rows of Eclipse stocked behind the bar – it’s truly the go-to spirit. One reason is its versatility. This medium-bodied rum is complex enough to sip on its own but adaptable enough to star in a range of cocktails.
Possibly the most popular tipple is the Bajan version of rum punch, made with Eclipse rum, lime juice, simple syrup and Angostura bitters. The ingredients are shaken together to create sunset-colored mixture which is poured over ice then sprinkled with nutmeg. ?
This cocktail has just enough sweetness to bring out the nuances of the rum. The bitters and nutmeg highlight the complexity of the liquor while the tartness of lime gives the drink a brisk edge.
It could be said that in Barbados, they are still commemorating the 1910 solar every time they raise a glass. Perhaps America could follow the lead of their laid-back Caribbean neighbors and continue to unite together in the name of Eclipse. You’ll want to enjoy this sipper all summer long, through November and beyond. ?
Eclipse Rum Punch
2 oz? Mount Gay Eclipse rum
1 oz? simple syrup
2 oz? fresh lime juice
3 dashes Angostura bitters?
1 dash nutmeg
Mix the first three ingredients with ice in a cocktail shaker and mix well. Add three dashes of Angostura bitters and shake lightly. Pour into a glass and sprinkle with nutmeg.
Far Cry Video Game Series Raises a Glass to 20 Years With a Limited Spiced Rum Release
Cynthia Mersten – 04/02/2024 – Rum Raiders
Gaga Gadget reported some exciting news for fans of the Far Cry gaming franchise and rum lovers alike: the brand was releasing a limited-edition spiced rum to commemorate the series’ 20th anniversary. The brand chose to release only 2,004 bottles as a special nod to the year Ubisoft launched the first Far Cry game.
The rum can be pre-ordered for $79.99 at Love Scotch.
The outlet reported that Ubisoft joined forces with Antheum Spirits and Tenessee Legend Distillery for the limited edition release of Gallito Supremo Spiced Rum.
Tennessee Legend Distillery hosts a hefty portfolio of rums, whiskeys, moonshines and gins. The brand is based out of the Great Smoky Mountains.
Antheum Spirits claims the release comes “straight from Far Cry 6’s unparalleled adventures in the exotic landscapes of Yara.” Not much more is known about the juice inside, but Antheum claims it is distilled from “the purest sugarcane” and describes the bottles as an “homage to the indomitable will of those who fight against oppression.” It hosts an ABV of 40%.
The spirits company describes Gallito Supremo Spiced Rum as possessing an “enticing aroma” and “bold palate.” Antheum Spirits recommends sipping this spirit neat or on the rocks.
Far Cry is a first-person shooter gaming anthology series. The game is quite a commercial success, and Game World Observer reported that it hit 90 million players in March.
Video game-related spirits releases continue to grow in popularity. In April 2023, Antheum released a spiced rum to honor Ubisoft’s Assassin’s Creed franchise. The whiskey front has seen more than its fair share of gamer-themed releases, and in August a Final Fantasy-Themed Whisky was released in Japan from Nagahama distillery.
US Spirits Nielsen Data: Slowing momentum with March sales growth ?of +5.5%. Diageo stronger.
Staff – 04/03/2024 –Citi
CITI'S TAKE
US Spirits volumes grew +5.5% in the 4W to March 23rd (12W +7.2%), a deceleration on +6.9% in the previous 4W.
Tequila volumes grew in the 4W by +5.7% vs +6.0% in the previous 4W, while Cognac volumes fell -5.5%, steeper than the -4.9% in the previous 4W.
Whiskey volumes were up +0.8% (previous 4W +0.9%) and vodka volumes up +0.6% (+0.7%), while gin volumes fell -1.9% (-1.1%), and rum fell -4.7% (-5.7%).
Prepared Cocktails volumes again grew significantly, up +24.3% albeit softer than +32.2% in the previous 4W.
Volumes were down for Rémy (-19.1%), Campari (-1.1%) and Pernod (-0.2%), but higher for Diageo (+2.1%) in the last 4W. Total price/mix dropped by -0.2% and $ sales growth was +5.3% for the 4W (vs +6.8% for 12W). ?
Diageo — Sales were up by +6.1% in the month (+4.7% in the last 12W), compared to +3.1% in the previous 4W. The latest 4W period was split volumes +2.1% and price/mix +4.0%. Value share increased +13bps. Don Julio volumes grew +19.5% and Crown Royal volumes were up +25.7%. Captain Morgan volumes were down -9.2%, Buchanan’s volumes were down -8.1% and Johnnie Walker volumes were down -8.5%. We estimate that US spirits represent greater than 50% of Diageo's EBIT.
Pernod Ricard — Sales fell by -3.8% in the month (-0.4% in the last 12W), compared to +1.7% in the previous 4W. The latest 4W growth was split volumes -0.2% and price/mix –3.6%. Value share fell -60bps. Volumes were negative for each of Glenlivet (-18.9%), Jameson (-9.3%), Martell (-2.4%), Absolut (-5.5%) and Malibu (-8.4%). We estimate that US spirits account for greater than 25% of Pernod's group EBIT.
Campari — Sales grew by +1.2% this month and up by +1.5% in the last 12W, compared to -0.4% in the previous 4W. The latest 4W was split volumes -1.1% and price/mix +2.4%. Value share was down -10bps. Aperol volumes increased +29.1% in the last 4W and Campari volumes were up +3.5%. We estimate that US spirits account for ~30% of Campari’s EBIT
Remy Cointreau — Sales fell by -21.1% this month, steeper than the 12W trend of -17.8% and compared to -18.0% in the previous 4W. The latest 4W was split volumes -19.1% and price/mix -2.5%. Value share was down -26bps. In the last 4W, Cointreau volumes fell -0.5% and Mount Gay volumes fell -2.6%. Volumes were lower for Rémy Martin (-29.1%), 1738 (-23.3%) and VSOP (-31.5%). We estimate that US spirits account for ~40% of Remy's EBIT.
Scope of Nielsen data – We believe the Nielsen AOC+C dataset provides a regular and important update on key industry trends and competitive dynamics. Although the data is a good representation of the off-premise (~50% coverage), it does not capture sales in 1) liquor stores; 2) on-premise, 3) control states and 4) e-commerce. Overall, we estimate Nielsen data covers ~20-30% of the total US distilled spirits market.
Brown-Forman (BFb.N): Getting Close to the Bottom of the Barrel; Upgrade to Neutral
Staff – 04/03/2024 – CITI
CITI'S TAKE
We have been Sell-rated on BFB since our February 2023 initiation, with our thesis centered on an expected slowdown in the spirits category after the large acceleration post COVID, with high inventory levels at the distributor and consumer level as well as weaker macro conditions. While we expect results to still be pressured throughout BFB’s F1H25, we believe this is better understood by the market post three large consecutive topline misses and two consecutive guidance cuts. With BFB’s stock down ~28% from the L52W high, reached at the end of July 2023 (underperforming Staples peers by 27 pts and the S&P by 42 pts), and its multiple over one standard deviation below its L5Y avg, we are moving to the sidelines and upgrading to Neutral, with the stock below our unchanged $52 TP.
Near-Term Topline Challenges Now Better Understood by the Market — Our thesis with our Sell initiation from February 2023 was centered on a topline slowdown in the spirits category and at BFB with difficult comparisons after the large acceleration post COVID, with high inventory levels at the distributor and consumer level as well as weaker macro conditions. We believe this is now better understood by the market post three consecutive topline misses and two consecutive guidance cuts and post a large ~28% stock drop since last July, underperforming Staples peers by 27 pts and the S&P 500 by 42 pts. While we still forecast results to be pressured throughout BFB’s F1H25, we believe this is better understood by the market and any signs of sequential improvement could drive longer-term investors back in the name given the attractive long-term attributes of the category and BFB’s business (as highlighted at the recent investor day – see our note here).
Gross Margin Has Room for Further Expansion in FY25 — BFB’s GM has been weak in recent years due to various external headwinds including cost inflation, tariffs, and FX. This resulted in a decline in gross margin from 67.8% in FY18 to 59.0% in FY23. BFB’s GM has improved in the first three quarters of FY24, and we expect the company to deliver a 61.1% gross margin in FY24, and further expansion in FY25 to 62.0%, as the company starts to benefit from lower agave costs, while lower wood barrel costs will flow through over the next few years given the aging process of BFB’s products.
Lower Valuation Looks More Reasonable Post Underperformance — Post the large stock underperformance, BFB now trades at ~26x NTM P/E, which is over one standard deviation below the last 5-year average of 35.0x, and 10 years average of 31.0x, a more reasonable level given near-term pressures. We are maintaining our $52 TP, based on ~26.5x our FY25 P/E estimate. With the stock now trading below our TP, we are upgrading BFB to Neutral.
Does legalising Sunday alcohol sales benefit stores?
Louis Thomas – 04/02/2024 – The Drink Business
The legalisation of Sunday alcohol sales in Connecticut neither benefitted nor damaged beer sales at liquor stores and supermarkets in the long term, according to a recent study from the University of Connecticut (UConn).
In 2012, Connecticut’s Sunday ‘blue law’ was repealed, enabling liquor stores to trade on the seventh day of the week, and permitting grocery stores that already sold beer to do so on Sundays (grocery stores in Connecticut cannot sell wine and efforts to legalise sales have fallen through). Prior to this, the state had some of the harshest laws surrounding booze in the US, a legacy of Prohibition.
At the time, according to the study (which was published in the Journal of Wine Economics), there were concerns from liquor store owners that if residents of the state were able to buy beer from grocery stores as part of their Sunday food shop, their own sales would be dented as consumers would not feel the need to pay a visit to liquor store to source their booze.
Examining data from 2004 to 2021, the researchers looked at openings, sales and closures for liquor and grocery stores in the state.
Cristina Connolly, assistant professor of agriculture and resource economics in the College of Agriculture, Health and Natural Resources, co-authored the study. She noted that, compared to other states that got rid of their blue laws, Connecticut saw a slight bounce in beer sales at grocery stores and liquor stores in 2012, but the trend did not last.
“There was this kind of novelty of the new policy. But it then evened out after about a month, and for the rest of the year, we did not see a difference,” Connolly noted, adding that this indicated that this indicated that “there wasn’t a substitution toward buying beer” at grocery stores.
As for openings and closures, there was a slight reduction in the number of grocery stores and a slight increase in the number of liquor stores over the time period. The researchers suggested that in both cases this was likely independent of the legalisation of Sunday alcohol sales, but that it indicated that permitting supermarkets to sell beer on Sundays was not hurting liquor stores either.
“Proposals to liberalise alcohol sales are popular with consumers,” the study concluded, suggesting that “it is possible to repeal Sunday blue law restrictions without negatively impacting liquor (or grocery) stores.”
Russia has increased the import of alcohol
Staff – 04/02/2024 – Oreanda News
By the end of 2023, the total volume of alcoholic beverages imported into Russia increased to 102 million dal against 96 million in 2022. This was stated by the head of the Ros Alcohol Tobacco Control Igor Alyoshin, his words are quoted by TASS.
Thus, in 12 months, the volume of alcohol imports to Russia decreased by 6 million dal. At the same time, export volumes, on the contrary, fell by 14 million dal and dropped to more than 25 million dal, Alyoshin said.
Earlier, the Russian Alcohol Tobacco Control reported an increase in the production of alcoholic beverages in Russia. According to the results of January-February 2024, the indicator increased by 11 percent compared to the same period in 2023.
All key market segments showed an increase. The total volume of vodka production in the country in the first two months of this year increased by 4.4 percent, and other alcoholic beverages — by 5.7 percent. At the same time, wine production showed the fastest growth rates — plus 27.4 percent year-on-year.
US Spirits - Ready To (Not) Drink
Staff – 04/09/2024 – Jefferies
The key debate on spirits is whether weak trends in the US are an aberration or a tipping point. The downgrade cycle from destocking will inevitably come to an end however what if growth does not return to trend once destocking is done? This report considers the risk that spirits based RTDs weigh on industry growth. Given this headwind, our preference is for RI over DGE given the more diversified footprint, self-help and cheaper valuation.
Where is the debate on spirits? After the weak share price performance in 2023 and continued softness into 2024, investors with duration are quite rightly running the ruler on spirits. The key debates are: (1) When is the earnings downgrade cycle done; (2) What is the right level of growth med-term?
US pandemic gains have been given back. The US is the largest market for EU spirits companies and a key differentiating factor vs other staples. Our analysis suggests that the pandemic gains have been given back. We estimate distilled spirits CAGR volume 2019-23 +1.5%, vs pre-pandemic volume trend 2009-19 +2.6%. Therefore, the question is why are spirits not growing?
What if growth does not return to trend once destocking is over? We believe the three key obstacles to pre-COVID trend growth are (1) Destocking; (2) Spirits share of throat tailwind - perhaps less pronounced; (3) Spirits based RTD growth. This is driving an air pocket for spirits growth.
What does this mean for stock selection? Preference for RI over DGE. We believe that we are at the beginning of the end of the downgrade cycle. However, given the risk of a near term growth hiatus in the US, our preference is for RI over DGE. This reflects a more diversified footprint, self-help and cheaper valuation. If DGE's US growth is flattish, this is a -300bps impediment to achieving the 5-7% org sales framework; if RI's US business is flattish, this is a c.-100bps impediment to achieving 4-7%.
1. Destocking cycle needs to come to an end. Spirits are slow-moving (not fast-moving) consumer goods. This lends itself to stocking up in good times and destocking in bad as inventory in the supply chain shrinks. Inventory levels are still above historical levels - see here. We do not anticipate that destocking will be a discussion point in 2025 however the hangover could linger into cal 2H.
2. Spirits tailwinds less pronounced. (1) Share of throat - spirits has been on a 20-year bull run, increasing share of throat from 29% in 2000 to 42% in 2023. While we believe these gains will remain sticky, the low-hanging fruit has arguably been harvested; (2) Price - given growth is more scarce and as excess inventory is cleared, this argues for less price (3) Mix - whilst premiumisation trends will persist long term, we see early signs of downtrading in certain categories, such as tequila.
3. Spirits based RTDs - detracting from growth. Spirits based RTDs account for c. 7.5% of total spirits category in 2023. By 2027, they are estimated to account for as much as 20% of total spirits. Note, this includes both traditional ready-to-drink and ready-to-serve (ie pre-mix cocktails). Risks include (1) Fragmentation risk given new to world brands (2) Quality considerations - some of the new entrants are coming in with poor quality, which can harm consumer perceptions of spirits (3) Race to the bottom - growth of private label options, risk of commoditising the category. We estimate that the category is roughly a fifth of the size of malt based seltzers, which argues for further headroom for growth. Until the category rolls-over, this could hold back breathing space for distilled spirits to return to its historical run-rate.
Cocktails continue to rise in the US (Additional Coverage)
Louis Thomas – 04/08/2024 – The Drink Business
Both the value and volume of cocktail sales in the US on-trade increased in the last quarter of 2023, according to the latest data from CGA by NIQ.
The data reveals that across Q4 of last year, there was a 5% year-on-year increase in cocktail value velocity, and a 6% increase in the average number of cocktails sold at venues (1,192). Nevada, home to casino capital Las Vegas, is still leading the way when it comes to sales, selling more than twice as many cocktails as the US average.
The average national price of a cocktail has also increased by a dollar from where it was in Q4 2022, rising to US$13. On average, the drink to command the highest price was the tiki bar classic, a Mai Tai.
As for what consumers are ordering the most, the Margarita remains the dominant cocktail choice, making up more than a fifth of total cocktail sales, followed by the Martini and Moscow Mule.
Indeed, the rise of Tequila continues, with the agave-based spirit making up 34.1% of cocktail base sales by value, a 1.8% year-on-year increase. Meanwhile, vodka’s share declined by 1.3% to 28.2%. Perhaps surprisingly, wine-based cocktails now appear to be bigger than ones incorporating rum, with the former increasing by 1.2% to have a 6.8% share.
Matthew Crompton, CGA by NIQ’s regional director for North America, commented on the findings: “After an excellent final quarter of last year, the cocktail category is well placed for more good growth throughout 2024. While some cocktail choices like the Margarita remain evergreen, this part of the market never stands still, with subtle but significant shifts in consumers’ preferences.”
Michigan: How Michigan Lost $1 Million of Liquor
C. JARRETT DIETERLE – 04/08/2024 – The Reason
Sadly, not by drinking it—the government just lost a fifth of the state’s inventory.
It's been a rough couple of years for government-controlled liquor systems. In 2022, news broke of an inside job at the Virginia Alcoholic Beverage Control Authority (ABC), in which a former state employee tipped off private collectors about which state-run liquor stores were expecting deliveries of rare and sought-after bourbons. Last year, Oregon Liquor and Cannabis Commission officials were busted for siphoning off hard-to-obtain bourbons for their personal use.
Now, Michigan is writing the latest chapter in the government's century-long saga of alcohol control embarrassments. According to a just-released audit of the Michigan Liquor Control Commission (MLCC), the state's complete inability to properly track its spirits inventory resulted in nearly a million dollars of liquor disappearing without a trace.
Michigan is one of 17 states that still operates as a control state. MLCC is the sole wholesaler of distilled spirits, meaning all liquor sold and distributed in the state must be originally purchased by the agency. Michigan law requires MLCC to exercise "complete control over alcoholic beverage traffic," but it turns out that the agency lacks control over pretty much everything.
Since the 1990s, MLCC has outsourced the actual storage and warehousing of liquor to three "authorized distribution agents" (ADAs), who in turn use 11 warehouses to house the booze. The ADAs, which essentially act as a government-sanctioned oligopoly, are supposed to be operating as agents of the state. But the state code is silent about what the actual responsibilities of the ADAs entail, which results in a situation where everyone and no one is in charge at the same time.
Perhaps the most significant finding of the audit is that $961,000 of MLCC's liquor inventory—totaling 62,294 bottles, housed in ADA warehouses—mysteriously vanished between January and February 2022. To put this in context, the missing liquor constituted 20 percent of the state's entire inventory. While the state is supposed to conduct physical inventory counts at the ADA warehouses, zero inventory checks took place from October 2019 to July 2022 (which, naturally, MLCC blamed on COVID-19, despite the pandemic not starting in earnest until the spring of 2020 and Michigan lifting its lockdown orders by June 2021).
"MLCC was unable to provide documentation regarding the whereabouts of the missing inventory," the audit dryly remarks. Although one should never ascribe to malice what can be explained by incompetence, it's worth noting that the state's inventory includes spirits ranging as high as $45,000 per bottle, which creates enormous opportunities for malfeasance given MLCC's slipshod ?tracking protocols.
Were this Agatha Christie-meets-Ayn Rand mystery not enough, the audit goes on to spell out how MLCC is also wholly incapable of ordering rational amounts of each booze type it stocks. The report recounts the agency purchasing 12,204 bottles of a particular spirit in a week in which a mere 1,104 bottles of that spirit were sold. The agency then kept over 11,000 bottles of the spirit on hand for the next 48 weeks—the last 19 of which saw zero sales for it. MLCC also purchased 780 bottles of another spirit over the course of 77 weeks, with zero corresponding sales in any of the weeks those purchases were made.
The MLCC's problems extended beyond inventory ineptitude as well, with the agency also somehow issuing numerous liquor licenses to establishments located in dry jurisdictions, which it now will be forced to revoke. These establishments were selling alcohol in dry locales since 2018 without anyone noticing, until the auditor stepped in.
In perhaps the understatement of the century—and in language only a government lawyer or accountant could appreciate—the audit rates MLCC's overall performance as "not sufficient." The agency's preliminary response is that it "agrees" with all of the audit's findings, as the report's mountain of evidence is apparently too much even for a bureaucracy to ignore.
Lost amid the report's 65 pages of boozy bean-counting—and the scandal of a million dollars of liquor aspirating into thin air—lies a deeper question: Why, in 2024, is the Michigan government still trying to operate as the wholesaler for distilled spirits? It doesn't do so for beer and wine, and it already goes so far as to outsource the actual warehousing and logistics to its distribution agents.
Sadly, the most predictable answer is also likely the most accurate: MLCC has generated some $2 billion for the state's general fund over the past decade. Perhaps a million dollars in missing liquor is a small price to pay after all.
Southern Glazer’s Wine & Spirits Promotes John Landry to Executive Vice President, General Manager, California
Staff – 04/06/2024 – Business Wire
Southern Glazer's Wine & Spirits (Southern Glazer's)—the world’s preeminent distributor of beverage alcohol—today announced that it has promoted John Landry to the role of Executive Vice President, General Manager, California, effective immediately. Until a successor is named, Landry will continue to oversee the Nevada market to ensure a smooth transition.
Landry is filling the position of Lewis Kenrick who was recently promoted to President, West Region, and will now report to him. As Executive Vice President, General Manager, California, Landry will be responsible for leading all business activities in the state.
"John’s exceptional leadership and performance as Executive Vice President, General Manager, Nevada has positioned him as the optimal candidate for the California leadership role," said John Wittig, Chief Commercial Officer.
"He is the perfect fit to build upon the strong foundation Lewis Kenrick has implemented throughout the state. John brings a leadership style that drives performance and culture while valuing our supplier and customer relationships."
Landry began his career in the beverage alcohol industry in 1991 with Heublein Wines Division, now Diageo, as a sales representative. He later joined the Boston Beer Company and Diageo Beer Company, holding senior roles in the industry across various U.S. markets. In 2012, Landry joined Southern Glazer's as Executive Vice President, General Manager for the Coastal Pacific Wine & Spirits division in Washington. During his tenure, he assumed additional responsibilities for markets in Alaska and Nebraska. In his most recent role, Landry serves as Executive Vice President, General Manager in Nevada, leading all aspects of the business, including shaping its vision and culture.
An announcement for John Landry’s successor will be forthcoming.
IWSR's innovation tracking highlights the key trends shaping NPD across low-alcohol beer, wine and spirits
Staff – 04/04/2024 – The IWSR
The innovations shaping future low-alcohol growth
While no-alcohol is poised to spearhead overall no/low growth in the coming years, a number of innovations across wine, beer and spirits will help to boost future consumption of low-alcohol products as well.
Low-alcohol volumes across the world’s top 10 no/low markets are predicted to grow at a CAGR of +3% between 2023 and 2027. Much of the category’s growth is expected to come from some of the largest low-alcohol markets, including Germany, the US, France and the UK.
Wine remains the strongest performer in the low-alcohol marketplace, with IWSR forecasts showing a 2023-27 volume CAGR of +12% for the category, ahead of RTDs (+9%) and beer/cider (+2%), while spirits are expected to decline (-2%).
But all categories are the source of much innovation at the moment, from the exploration of ‘mid-strength’ wines to extensions of established brands and the launch of low-alcohol products that aim to leverage changes in the regulatory environment.
Continued education
For consumers who want to moderate their alcohol intake, low-alcohol propositions can sometimes be confusing. “Consumers don’t necessarily know that an alcoholic spirit brand normally sits at 30-40% ABV, so they don’t always know what a 20% ABV spirit means for a gin brand, or how a 20% ABV spirit might relate to a 5% ABV wine or a 1% ABV beer,” says Susie Goldspink, Head of No/Low-Alcohol Insights, IWSR. Furthermore, it is often unclear to consumers how many low-alcohol beverages they can consume and still be within the legal drink-drive limit.
As such, brands may need to continue educating consumers on the low-alcohol proposition. In an online advert for Nice Drinks in the UK, for example, an illustration shows how many glasses of their low-alcohol Sessions wine equal one glass of full-strength wine.
Established brands
As in no-alcohol, line extensions of established full-strength brands into the low-alcohol space are a way of recruiting consumers to try products with reduced levels of alcohol.
Established wine brands are increasingly exploring the potential of ‘mid-strength’ variants (see below), as are some marquee beer brands. For instance, Asahi launched Asahi Super Dry Dry Crystal in the Japanese market in 2023 – a product with a reduced alcohol level of 3.5% ABV, marking the first time the company has changed the Super Dry recipe since its creation.
New wine technology
No- and low-alcohol wine has traditionally suffered from poor consumer perceptions of quality and flavour, but new advances in winemaking technology are trying to address this issue.
The Advancement of Australian Lifestyle Wines project was launched in 2023 – an initiative uniting brand owners and research institutes and backed by a AU$3m research grant from the federal government. It aims to position Australia as the largest global producer of no/low wines.
“Governments and producers are recognising the untapped opportunity in reduced-ABV wine, and are investing in new no/low technology to mitigate the long-term decline in the full-strength wine category,” says Goldspink. “Gaining repeat purchase of low-alcohol wines remains a challenge, but investment in technology will improve quality.”
Mid-strength and ‘better for you’ wines
Established wine producers are increasingly prioritising lower-alcohol product launches, expanding their most popular brand franchises with a number of mid-strength expressions that typically have about half the ABV of their core ranges.
This is particularly apparent in Australia, where recent low-alcohol spin-offs of major brands include Elephant in the Room (6.5% ABV), Squealing Pig Mid Pig (5-6.5% ABV), Pepperjack Mid (7%) and McGuigan Black Mid – which sits outside IWSR low-alcohol wine definitions at 9.8% ABV, but targets the same consumers (it has also been launched in the UK at 7% ABV).
“Outside Moscato, low-alcohol wine has traditionally struggled to cut through, but a wealth of mid-strength NPD means it should attract more attention in future,” says Goldspink. “Mid-strength is a well-known concept in the Australian beer category and has been adopted by wine brands to help shoppers better understand and navigate low-alcohol wine.”
In Japan, there is a growing trend towards lower ABVs across many categories – in beer and RTDs, but also in still, sparkling and rice wines. Recent innovations include AFAP sparkling sake from Sakura Town at 7% ABV (instead of a typical 10-16% ABV); and Japan Soda’s Nihonsakari Japan Soda sake, also at 7%.
In the US, there is growing interest in the ‘better for you’ wine segment, as a result of consumer awareness of health and wellness, especially among the LDA Gen Z cohort.
“Consumers are increasingly drawn to brands with fewer calories, organic credentials, reduced carbs, lower alcohol content and, in many cases, zero residual sugar,” adds Goldspink.
Examples of products targeting this segment include Kim Crawford Illuminate, Kendall-Jackson Low Calorie Chardonnay, Sunny with a Chance of Flowers, Mind & Body, Matua Lighter, and [yellow tail] Pure Bright.
Regulatory shifts
In August 2023, alcohol duty changes were introduced in the UK, ushering in a lower tax rate on beer below 3.5% ABV and higher duty on most still wine – and this is already driving NPD and the reformulation of existing products.
Examples in beer include the new Rosa Blanca 3.4% ABV variant from Damm, and Carlsberg reducing the ABV of its flagship lager brand to 3.4%.
Wine launches include the McGuigan Mid-range of 7%, lower-calorie wines from Australian Vintage, with a Shiraz, Sauvignon Blanc and rosé; and the Sevenly wine range which arrived in the UK in October 2023 – a partnership between actor Sarah Jessica Parker and New Zealand’s Invivo Wines.
“Low-alcohol could be on the brink of better times in the UK, with ‘mid-strength’ beer and wine gaining in prominence, aided by 2023 duty changes that favour products with lower ABVs,” says Patrick Fisher, Senior Market Analyst, IWSR. “This is only likely to spur more NPD and product reformulation in this area.”
Spirits making inroads
Low-alcohol spirits are ceding market share to low-alcohol wine in particular, especially in the US, where IWSR forecasts predict that low-alcohol wine volumes will grow at a CAGR of +14% between 2023 and 2027, while low-alcohol spirits are expected to decline at a CAGR of -9% over the same timescale.
Nonetheless, brand owners are still targeting consumers who are looking for lower alcohol levels, through products such as Decem, which is distilled with fragrant botanicals for a full flavoured 10% gin alternative, and Quarter, which offers 12% gin and tequila alternatives as well as a ready-to-serve lighter Margarita and Negroni.
“Such an approach generates interest in lower-proof products, even though it is outside IWSR’s definition of a low-alcohol spirit,” says Goldspink. “Low-alcohol spirits are overshadowed by low-alcohol wine, but brands are making inroads with products reflecting changing consumer behaviour, especially a preference for lighter drinking experiences.
A21 WINE & SPIRITS BUYS NOBLE OAK BOURBON & RYE FROM EDRINGTON
Staff – 04/04/2024 – A21 WINE & SPIRITS
A21 Wine & Spirits, the operating division of Apogee 21 Holdings, Inc. has agreed to purchase the Noble Oak American Whiskey brand from Edrington, the Scotland-based ultra-premium spirits producer.
Noble Oak’s Bourbon and Rye expressions are award-winning American Whiskies, launched by Edrington for the US market in 2018. Known as ‘A Great Whiskey with a Noble Heart’, the brand has a mission to plant a tree for every bottle sold. Sales of Noble Oak have enabled the planting of more than 1.2 million trees at reforestation projects across the USA.
Noble Oak Bourbon was awarded 94 points at the 2021 Ultimate Spirits Challenge. Sales of Noble Oak Bourbon and Rye are projected to reach 35K 9-liter cases for the current year.
A21 CEO, Mark Newman said: “This is a transformative moment for A21 in its emergence as a National Supplier.”
This super-premium Whiskey brand is distributed nationally and is primarily aligned with RNDC in most markets. It is also distributed by Breakthru in Missouri, Southern Glazers in Nevada, Allied Beverage Group in New Jersey, Brescom Barton in Connecticut, United Liquor in Massachusetts and Lipman Bros. in Tennessee. Edrington will assist A21 during the transition.
Terms of the sale were not disclosed
Biden official claims Ireland changed alcohol labelling rules after US pressure
Arthur Beesley – 04/03/2024 – The Irish Times
Irish health officials say nothing changed due to US lobbying despite claim in trade representative’s report
A member of president Joe Biden’s cabinet claimed in a new report that Ireland changed new alcohol labelling restrictions in the face of pressure from the US.
The claims were immediately dismissed by the Department of Health, which said the disputed measures were part of the Government’s original plan.
Minister for Health Stephen Donnelly signed legal restrictions last May to compel alcohol manufacturers to label beer, wine and spirits with health warnings on the risk of liver disease and fatal cancers and risks from drinking alcohol while pregnant.
At the time the Government described the regime as the world’s “first comprehensive health labelling of alcohol products”, saying the drink makers would be required to set out the calorie content and grams of alcohol in their products.
The measures won’t come into force until 2026, to give business time to adapt.
But the US has said objections from Washington at a key committee of the World Trade Organisation led Ireland to change how the measures will be applied, saying the transition period was prolonged and allowances given to apply health warnings on stickers.
The US said the concerns were raised at the technical barriers to trade (TBT) committee of the WTO. The committee is a panel for governments to discuss specific concerns about regulations or trade, often about measures still in the pipeline for implementation later.
The contested claims were set out in a report from US trade representative Katherine Tai, a senior member of the Biden administration who is the main trade adviser and negotiator for the US president.
Referring to Mr Donnelly’s regulations, the US 2024 national trade estimate report on foreign trade barriers said the measures set “unique health labelling requirements” for drink.
“While supportive of the goals of the regulation, in June and November 2023, the United States raised procedural concerns about the regulation in the WTO TBT committee,” the report said.
“Ireland responded extending the transition period and by permitting importers to affix stickers with the required information to imported products.”
Asked about the US report, the Department of Health said the Irish labelling law was submitted for EU assessment in June 2022 and the WTO in February 2023.
“The law was signed by the Minister for Health in May 2023 and will come into operation in May 2026,” the Department said.
“The provisions in relation to the transition period and the option of affixing stickers with the required information were in the original draft of the legislation when submitted for EU assessment, and were not introduced during the WTO process or in response to concerns raised by a WTO member.”
Ireland has clashed in the past with US politicians over health measures. Four US congressmen and the then governor of Virginia lobbied Enda Kenny’s government against plain tobacco packaging in 2013, four years before the restrictions took effect.
US Spirits – De-premiumisation Tracker April 2024
Staff – 04/04/2024 – Jefferies
We refresh our "de-premiumisation tracker" for the US spirits industry for the four weeks to 23 March.
RTDs continued to drive volume growth in NieslenIQ, while seven categories registered yoy volume declines, with particular signs of pressure in Cognac, Scotch, Irish Whiskey and Rum.
While industry growth continues to lag the historical 4-5% run-rate after the COVID super-cycle, we believe that the long-term category tailwinds remain unchanged.
Industry growth normalising after COVID super-cycle. 2023 was a reset year for US spirits, with DISCUS data (see our note here) suggesting industry vols +1.2% (2022 +4.8%), value +0.2% (+5.1%), and price/mix -1.0% (+0.3%). Backing out RTDs/cocktails, we estimate distilled spirits vol/value -3.3%/-1.5% with price/mix +1.8% given category tailwinds. Timing of reversion to historical trend c4-5% is unclear; distilled spirits volumes appear to have largely corrected vs trend (2019-23 CAGR 1.5% vs 2009-19 +2.6%), however value is running slightly ahead (2019-23 CAGR +5% vs 2009-19 +4.5%). We believe the long-term drivers of growth, including premiumisation and share of throat tailwinds, remain unchanged.
Declining price/mix in most categories. Price/mix slowed down for nine categories in December, with Tequila (+4.3% vs prev +4.5%), Cognac (-2.5% vs -2.1%) with Remy +0.7% vs +2.2%, Gin (+3.4% vs +4.9%), Scotch (+1.4% vs +3.1%), Vodka (+1.7% vs +2.7%), Rum (+3.0% vs +3.7%). Price/mix improved for Bourbon (+5.9% vs +5.6%) and Canadian Whisky (+3.4% vs +1.6%).
Tequila trends - slower month and some pressure on pricing. Tequila sales growth was +9.9% in March (vs +10.3% in February), with volumes +5.7% (vs +6.0%) and price/mix +4.2% (vs +4.3%). Casamigos saw some recovery (value +2.4% vs +0.4%) however price/mix continues to slip (-3.3% vs -2.9%). Don Julio remained strong (+19.8% vs +19.1%) with slight price/mix improvement (+0.3% vs +0.1%). Avion was the biggest decliner in absolute value within the category. We detect signs of discounting; Kendal Jenner's brand 818 has reset price points, with large volume growth +79.3% but price/mix -35.4%.
Scotch - a softer month. Price/mix for scotch was lower at +1.0% (vs +1.4%), while volumes decreased -8.4% (vs -4.7%). Buchanan's declined -7.9% (vs +8.0%), as the launch of pineapple in Feb 2023 has now been cycled. Johnnie Walker also had a weaker month (-6.8% vs -3.4%). Canadian whisky brand Crown Royal continued its momentum (+28.7% vs +13.0%) with the benefit of Crown Royal Blackberry.
American whiskey - Premiumisation trend intact. Premium brand Blanton led category growth and outperformed mainstream brands Jim Beam (+1.3%) and Jack Daniel's (-2.3%).
Cognac - performance remains subdued. March (cognac value -8.8%) saw some deceleration vs February (-7.3%), with negative volumes (-5.5%) and price/mix (-3.3%). Hennessy (Mar -4.1% vs Feb -2.9%) continued to outperform Remy (-28.3% vs -25.1%), with benefit of having reset price points on VS. Hennessy price/mix -4.1% vs Remy +0.7%.
White spirits and RTD. Vodka weakness in Grey Goose, SKYY and Ciroc. Tito's continues to drive a large part of category growth. RTD growth continues to be driven by Gallo's High Noon and ABI's Nutrl and Cutwater. Profit exposure to US. c.50% Diageo, c.40% Remy, c.25% Campari and Pernod.
New York: Alcohol sales expansion will increase health risks
Staff – 04/08/2024 – Mid Hudson News
A coalition of substance abuse and addiction experts throughout the state recently called upon the governor and legislators to reject proposals that would weaken the liquor laws. In light of troubling statistics illustrating the harm of increased alcohol consumption during the pandemic, and echoing established public health guidance to reduce alcohol density, the coalition recommended that “any efforts to expand alcohol access in the name of consumer convenience, or private profit, should be suspended indefinitely.
According to new data released in February by the Centers for Disease Control and Prevention, alcohol related deaths across the United States increased 29 percent from 2017 to 2021. Researchers from Hofstra University published a study that found “alcohol-related mortality in the US suggests there has been a significantly higher rate of increase in deaths among female individuals in recent years.” The New York State Department of Health Behavioral Risk Factor Surveillance System reported that “Excessive alcohol use also results in economic costs and costs NYS an estimated $16.3 billion, or approximately $2.28 per drink.”
Despite these facts, the State Senate’s budget bill includes a range of harmful measures to spur more alcohol sales in New York. Legalizing alcohol shipping direct to the home will not only pour gas on the fire that is threatening public health, but it will also contribute to increased underage consumption. Recent reports from state officials across the country have illustrated that direct to consumer alcohol shipping is harmful.
Lawmakers and law enforcement agencies in South Carolina, Tennessee, Oklahoma, Texas, Massachusetts, and Vermont have conducted investigations that show direct to consumer alcohol shipments are routinely delivered without age verification. Vermont’s investigation even showed that illegal direct shipping originated in New York State. Law enforcement professionals have highlighted the dangers of the illicit alcohol market to New York’s teenagers.
COVID-era policies like “Drinks to Go” were extreme measures taken during unprecedented times and according to federal studies contributed to the spike in alcohol consumption that has led to increased illness. Now that the pandemic era circumstances prompting “Drinks to Go,” are over, it’s important to weigh the potential benefits with analysis of the health costs and maintain proper controls around alcoholic beverages.
Loosening alcohol laws, to allow shipping alcohol to homes and allow wine sales in grocery stores will increase sales and consumption in New York. These policies defy established public health guidance and ignore the threat to women’s and adolescent’s health. When it comes to alcohol control, New Yorkers are not struggling to find a drink. Weaker liquor laws will have sobering consequences. ?Put public health ahead of private wealth and keep liquor laws strong.
Ellen Morehouse is Executive Director of Student Assistance Services Corporation in Tarrytown. Jim Conklin is Executive Director of the Alcohol and Drug Abuse Council of Orange County in Middletown.
Nyetimber offers to buy Lakes Distillery
Nicola Carruthers – 04/04/2024 – The Spirits Business
The Lakes Distillery is set to be acquired by English wine producer Nyetimber in a deal that values the whisky maker at ￡71 million (US$89m).
Cumbria-based Lakes Distillery, known for producing English whisky, gin and vodka, revealed that it had received a recommended cash offer from West Sus----based Nyetimber. The deal values the firm’s share capital at approximately ￡46.1 million (US$58m).
Nyetimber, England’s leading sparkling wine producer, noted a ‘sizeable opportunity’ for The Lakes to grow its market share in the UK single malt whisky market, and expand globally.
The directors of The Lakes Distillery believe the terms of the acquisition are fair and reasonable. As such, they plan to recommend that its shareholders vote in favour of the deal at a general meeting.
The Lakes recently announced a new 10-year plan to reach a 1% share of the global luxury dark spirits market by 2030.
James Pennefather, CEO of The Lakes Distillery, said: “This plan entails an additional funding requirement of ￡10 million [US$12.5m] over the next three years to provide the necessary growth capital to increase production capacity, to further invest in laying down maturing spirit stocks and to grow the brand’s footprint in four international markets.
“The offer by Nyetimber offers the prospect of an owner with the same shared strategic vision and crucially, certainty of funding.”
Located near the Lake District National Park, The Lakes was formed in 2011 and started operations in December 2014. The 11-acre site includes a distillery, visitor centre, shop and bistro.
In considering the offer by Nyetimber, The Lakes directors looked at other funding options in a ‘tough market for raising capital’. They concluded that there is a ‘degree of uncertainty’ around the company’s ability to fully fund it independently without comprising its new 10-year plan.
The English whisky maker has raised and invested more than ￡30m (US$40.2m) since it was founded, including ￡1.7m (US$1.2m) from a Crowdcube fundraise in 2017 and a ￡3.5m (US$4.3m) asset-based loan.
The Lakes has struggled financially in recent years, reporting an audited loss of ￡1.3m (US$1.6m) in earnings before interest, taxes, depreciation, and amortisation (EBITDA) on net revenue of ￡5.8m (US$7.3m) for the year ending 30 June 2023. However, unaudited accounts for the seven months to 31 January 2024 showed a year-on-year net revenue growth of 35%.
By joining the Nyetimber group, Pennefather said the company would benefit from quality of production, brand marketing and routes to market.
Pennefather continued: “The Lakes directors are confident that this [acquisition] will confer significant benefits to The Lakes’ long-term prospects both as a brand and as a company and the Nyetimber offer, which values The Lakes at an enterprise value of approximately ￡71 million, equivalent to a multiple of 12.2 times net revenues for FY23, represents not only the best way to ensure that The Lakes remains fully funded but also provides fair value for existing shareholders at this stage in The Lakes’ growth journey.”
‘Globally relevant’ English drinks group
Nyetimber said The Lakes is the leading English distiller of premium single malt whisky and other spirits, and is distinguished by its Sherry-led house style.
The deal also marks an ‘important step’ in Nyetimber’s aim to create a ‘globally relevant’ English luxury drinks group.
The wine maker also said that it is the ‘right long-term partner’ to support The Lakes’ management team in reaching the goal of becoming a global spirits brand.
Eric Heerema, CEO of Nyetimber, added: “We believe that this potential acquisition represents an opportunity for us to expand our capabilities, drive exciting new growth and support The Lakes in delivering on its ambition to be a globally recognised spirits brand.
“Not only do we have an inherent understanding and strong relationships with the world’s leading luxury restaurants, bars and retailers, but we also have a shared strategic vision.”
The deal, which is subject to a number of conditions, is expected to be completed in the second quarter of 2024.
What's hitting the shelves? New beverage launches - from white rum to coconut water
Rachel Arthur – 04/08/2024 – Beverage Dialy
From white rum to coconut water, we take a look at some of the newest innovations making waves in beverage NPD.
SpicedFlavored Rum Market Size 2024 to 2031.
Staff – 04/09/2024 – Report Time
Market Overview and Report Coverage
Spiced flavored rum is a type of rum that is infused with various spices and flavorings, giving it a unique and distinct taste profile compared to traditional rums. The market for spiced flavored rum has been witnessing significant growth in recent years, driven by the increasing popularity of flavored liquors among consumers.
The future outlook of the spiced flavored rum market looks promising, with continued growth expected in the coming years. Factors such as changing consumer preferences, a growing interest in craft and artisanal spirits, and a rise in cocktail culture are all contributing to the expansion of the market. Additionally, the versatility of spiced flavored rum makes it a popular choice for mixing in cocktails, further boosting its demand.
The current outlook of the spiced flavored rum market is positive, with key players introducing innovative and unique flavor combinations to cater to the evolving tastes of consumers. The market is expected to grow at a CAGR of 11.80% during the forecasted period, demonstrating strong growth potential in the years to come.Overall, the spiced flavored rum market is poised for continued growth and expansion, driven by consumer demand for unique and flavorful spirits.
Until the next newsletter!
Federico Hernández - The Rum Lab
ACCOUNT MANAGER - AGENTE IN ATTIVITA' FINAZIARIA - BANCA CF+
2 个月??
Growth in rum sales shows the demand for quality & tradition. ?? Marcus Aurelius once hinted - the best revenge is to be unlike your adversary. Let's innovate responsibly! #Sustainability