TheRumLab Industry Newsletter Week #20 of 2024
The Rum Lab
TheRumLab - Our main focus is Rum Education. We do so through our digital magazine, events, infographics, and more.
MARK REYNIER Quintana Rum, CEO & Founder ?
TRL: Who is Mark Reynier?? My family business was wine importation into the UK. From 1980 onwards I bottled and distributed fine French wine, on my own account as a wine & spirit retailer in London. Then I started an independent bottling company for whisky before resurrecting Islay single malt distillery Bruichladdich in 2001. ?It was then I started the original Renegade to bottle other rums, before creating Waterford Distillery in Ireland in 2015, and then finally building Renegade Distillery in Grenada in 2019. I was brought up to understand the integrity of natural flavor, to trust and train one’s sense of smell, to seek out balance, harmony, and length. This is what we do at both Waterford Whisky and Renegade Rum.
TRL: What does the rum mean to you? What made you fall in love with rum and when did it happen?? As an independent bottler of whisky in the late eighties and nineties I had become increasingly frustrated by the diminishing volume of premium quality malts and looked for an alternative, a diversification: rum, at first, seemed to offer similar opportunities of fine spirit, venerable casks that once prevailed with whisky. However, frustrated as much by a lack of transparency and authority, as availability and variety, I decided to explore deeper and came to the conclusion that to achieve what I wanted I would need to start from scratch.?
TRL: Three essential characteristics that define the rum according to your perspective.? Modern production values. Using sugar cane as the primary ingredient rather than the residue from sugar refining, means that the concept of terroir comes into play - the 3 dimensional interaction of micro-climate (with the emphasis on micro) with soil and topography. This concept requires traceability - the proof - which in turn demands transparency - the sharing - which combined, gives authority, something that one can truly believe in and get behind, a natural product of the land.
TRL: What is the most important contribution you have made in the rum industry?? Transparency. The Cane Code on the back label not only validates our Renegade concept but verifies the rum in the bottle itself. This is what we do; this is what we believe; this is how we do it. Hopefully we can demonstrate that there is more to rum than mere commodity supply, that rum can be taken as seriously as the finest single malts and cognacs, with a flavor profile as compelling as the production proposition. I guess with building a new, state-of-the-art distillery from a blank sheet of paper, combining whisky industry thinking with pioneering innovation and cane inspiration will be the catalyst that finally proves rum’s turn has come.
TRL: What is your favorite place for drinking rum? Have you ever tried drinking a rum while in the very same field as the cane from which it was distilled? It’s a mighty, mighty powerful feeling - a natural, basic elemental connection.
TRL: Favorite drink + Recipe? I like to savor the flavor of single cane rum just like a single malt whisky: a dram, or in this case ‘a drum’, unencumbered, au naturel, with a little cool spring water (dilute to suit) to open up the flavor and mellow the ABV. Others prefer the cocktail approach and with all that natural flavor there's a pretty big bang for buck - but my personal preference is to experience the spirit in its purest form.?
TRL: Why is it important to educate the rum consumer?? Reliable information has been woefully scarce; a vacuum of knowledge, repetition of rumor, ?recycling of scant details. With as many countries making rum as there are interpretations of what rum is, together with the lack of rules or regulations, it is no surprise the waters are pretty murky. Some will prefer it stays that way - the industry narrative. The naissance of single malt whisky started with the pioneers, the guys that were there at the beginning back in the mid eighties and nineties. Then there was the Bruichladdich era, from 2001, when we opened the doors and explained our principles, shared how whisky was really made. ?Now there is a third generation, as well informed as the previous - but they want to know ‘why’ as much as ‘how’ by seeking out reliable information. ?It has to start somewhere.
TRL: Any tips to train the palate and taste a good premium rum?? Each to their own, but for myself and a Renegade ‘drum’ ?I recommend, above all, don’t rush it. Take your time. I use a decent sized tumbler, rocks glass, or any open, high capacity wine glass. Pour a good amount (you are going to be taking your time, right?) and nose it: really explore and rejoice in the cane bouquet, the complexity and profile and as the spirit oxidizes this aroma will develop and open up. Then add a drop of water. This will further enhance the flavor liberation so keep nosing and observing the extraordinary evolution in the glass. All this and you haven’t even drunk any! Then, ‘dilute to suit’ your palate: add more still spring water until you find the optimal ABV to match your mood, time of day, company… ?warmth, air, water - and time - will together act on the spirit in the glass to offer a rewarding, dynamic experience.
TRL: Is the commitment to sustainable development the key of success for the permanence of the rum industry in the world? Why?? Though sustainable development anywhere is of course desirable, the issues are still the same - energy, water and waste - ?I would wager not necessarily linked to the ‘permanence of the rum industry’. ?We had the chance to build a state-of-the-art distillery, the first one in our neck of the Caribbean in over a century: much has changed in that time and yet, bizarrely, yet some has remained the same, such as Biomass. Some technologies are qualitative such as temperature control that permits controlled fermentations for purity, stainless steel for hygiene; others are environmental like wastewater treatments and emission controls.
TRL: What are your next goals in the rum industry?? Spread the word of just how good cane rum can be, a true alternative as profound and complex as a single malt; as elegant and refined as a good cognac; as earthy and natural as rustic mezcal. In short, that there is much more to rum than meets the eye. ?
TRL: Why is the role of the bartender important in the rum industry?? Bartenders, understandably, are always on the lookout for novelty, in a neverending flavor of one-upmanship. Many will tell you that cocktail recipes of today no longer work when in reality it isn’t the recipe: it’s the spirits. They are not what they once were, being too commercially thin and insubstantial. Rediscovering the kaleidoscope of natural flavor, liberated by innovative fermentation, enriched by low and slow distillation, matured in good wood all taken together opens a whole new window for the disc jockeys of natural flavor.
TRL: What is your advice for new generations in the rum industry?? They say the definition of madness is repeating the same action over and over again yet expecting a different result. ?And the rum industry, forever the Cinderella, continues to do exactly that: something has to change…
TRL: How can people learn more about you? Website? Social media page?? Our website is a font of knowledge, both thought-provoking and informative ?articles, around rum distillation and what we renegades do in Grenada: www.renegaderum.com , and most of the usual social platforms:
Cheers! The 7th annual New York Rum Festival is coming to Greenpoint. Rum’s the word.
Christina Izzo – 05/10/2024 – TimeOut
If there's one liquor that screams summer, it's rum—from the best daiquiris in New York City to tropical tiki bar cocktails, a rum-splashed drink instantly conjures up images of sun, surf and sand. So it's good timing then that the New York Rum Festival is coming back for its 7th edition, taking place next month on Saturday, June 8, at 100 Sutton Studios in Greenpoint. (Fun fact: did you know that New York State is one of the largest consumers of rum in the U.S.? We believe it!)
Hosted by The Rum Lab, this year's spirited edition will invite both industry pros and rum enthusiasts alike to immerse themselves in the world of rum with samplings of over 160 expressions from around the globe, including Fiji, Spain, Martinique, Belize and more. A highlight of the boutique-style event will be the on-site portfolio of Rums of Puerto Rico, plus the new expressions by Rhum Barbancourt from Haiti and Planteray Rum from Barbados (previously Plantation Rum).
Along with discovering—and sipping, with four separate tasting sessions throughout the day kicking off at 1:30pm—rare and exotic varieties of the summery liquor, you can learn about the latest trends and developments in the industry and attend seminars on topics like "The Importance of Puerto Rican Rum for the Spirits Industry," "Transcontinental Aging" and "French Heritage." "This is an incredible opportunity for rum enthusiasts and industry professionals to come together to learn, network, and discover the latest trends in the world of rum,” said the event producer Federico Hernandez.
Tickets start at $75 and are available in tiers based on Industry, General Admission and VIP ticket options. If you're really a true rum lover, the VIP Rum Experts Session will allow you to enjoy a five-hour admission, exclusive Rum Lab swag, premium tastings, and the ability to attend consumer seminars. The Trade Industry session offers industry professionals a discounted ticket with the opportunity to network, taste premium rums, attend trade-focused seminars, and more. You can snap up your ticket of choice at the New York Rum Festival website.
Black Tears rum supports Cuban musicians
Melita Kiely - 5/13/24 - The Spirits Business
Cuban spiced rum Black Tears has collaborated with the Black Box gallery in Havana, Cuba, to support local musicians.
The partnership will back and promote young Cuban musicians via Black Box’s Talent Show programme.
The project was created by Grammy-winning record producer Andrés Levín. It will include multiple competition tours for young musicians throughout 2024, which will culminate in an album release at the end of the year.
Levín, owner of Black Box gallery, commented: “We felt from the start a natural resonance between Black Box and Black Tears. We are supporting up-and-coming talent that would normally not be heard – as part of Black Tears’ mission.
“There are no other brands in Cuba that focus on these priorities. We’re just at the beginning of the project and relationship and look forward to more collaborations in the future.”
Cuban rum Black Tears is distributed in its native country by Ron Vigia, a joint venture between Island Rum Brands and Zerus, the commercial arm of Cuba’s state-owned sugar company Azcuba.
The name ‘Black Tears’ is a direct translation of ‘Lagrimas negras’, which was a Cuban song released in the first half of the 20th century.
“Black Tears has become one of the top rum brands in its home market in the past several years, a preferred choice of the younger generation of consumers,” said Ramses Villar Caraballo, sales and marketing director of Ron Vigia.
“Providing support to the new creative generation of Cubans is part of the brand DNA. Black Box in collaboration with Black Tears is a beautiful project that gives the young Cuban musicians their first opportunity to be heard.”
In April this year,?Black Tears secured travel retail listings?via duty free operator Heinemann.
Meanwhile in February, the Cuban brand?expanded its availability across Australia.
The Top Rums From The 2024 American Distilling Institute Judging
Joseph V. Micallef - 5/11/24 - Forbes
Two rum brands brand took Best of Class honors, and two took Best of Category at the 2024 American Distilling Institute (ADI) International Spirits Competition (ISC) judging. The winners showcased a diverse range of aroma and flavor profiles spanning expressions from overproof rum to pot still and hybrid still rum.
The annual competition, a springtime event that draws some of America’s top spirit judges, is a prestigious platform. It not only spotlights leading craft distillers and their spirits among American and international producers but also provides significant recognition for their efforts. This year, the competition once again proved its value, with numerous up-and-coming distillers earning Double Gold and Gold medals, a testament to their dedication and skill.
The ISC designates the top spirits in each category as Best of Class, while the top spirits in each sub-category are designated Best of Category. The Best of Class winners are chosen from the Best of Category winners.
The Best of Class Bottled & Blended Sugar Cane Spirit is?Evolve Distilling, Caribbean Dark Rum, No-Age-Statement, 40% ABV, 750 ml.
Evolve Distilling is a Claremont, California based craft distiller. Its Caribbean Dark Rum is made from a blend of Caribbean sugar cane molasses. The rum is characterized by a rich and full-bodied taste, with notes of caramel, vanilla, and oak, complemented by a hint of tropical fruit.
The ADI Judging Panel described the rum as featuring:
Savory aromas accompanied by notes of butterscotch and burnt caramel. On the palate, the rum is smooth and sweet, with tropical fruit flavors, seasoned oak, and vanilla notes. The finish is long and flavorful, sweet with a slightly bitter note.
The ADI Judging Panel described the Burdekin Rum as showing:
A complex rum that features a complex array of earthy, herbal, vegetative, and brown sugar/burnt caramel notes. On the palate, it’s slightly sweet with distinctive caramel flavors accompanied by notes of well-seasoned oak wood, tropical fruits, and herbal and vegetative notes. The finish is long with lingering caramel and herbal notes.
The Best of Category Overproof Rum is?18th?Street Distillery 3 Year Straight Barrel Aged Rum, 3 YO, 45% ABV, 750 ml.
18th Street Distillery is based in Hammond, Indiana. It has been a perennial medalist in spirit competitions. Its 3 Year Straight Barrel Aged Rum is made from high-quality sugar cane molasses. The three years of oak barrels impart notes of caramel, vanilla, and spice to the rum.
The ADI Judging Panel described the rum as featuring:
Earthy and fruity notes on the nose. On the palate, there are savory and creamy/lactic notes accompanied by fruity and milk chocolate flavors. The finish is long and sweet with lingering fruit and chocolate notes and slightly peppery. Think of it as a liquid and alcoholic Cadbury Fruit and Nut bar.
The Best of Category Hybrid Still Rum is?South Hollow Spirits, Twenty Boat Barrel Reserve, No-Age-Statement, 47.5% ABV, 375 ml.
South Hollow Spirits’ Twenty Boat Barrel Reserve is a premium rum crafted at their distillery in Cape Cod, Massachusetts. This rum is named after the historic Twenty Boat fishing fleet that once sailed the waters of Cape Cod.
The Twenty Boat Barrel Reserve is made from a blend of premium sugar cane molasses. The rum exhibits notes of caramel, vanilla, and seasoned oak, with a smooth and lingering finish.
The ADI Judging Panel described the rum as showing:
Butterscotch and brown sugar on the nose accompanied by herbal and fruity notes. On the palate, the rum is smooth and creamy, with notes of brown sugar/burnt caramel and tropical fruits. The finish is long and silky, with a notable palate weight and lingering caramel notes.
The 2024 ADI winners highlighted an impressive class of up-and-coming craft distillers. Some of the winners are well-known, while others are still relatively new and have limited national distribution.
All of them produce outstanding rums, and all are very reasonably priced. They are well worth seeking out and will prove excellent, either straight up or in cocktails. Once again, ADI has done a superb job of identifying the craft distillery industry’s up-and-coming rum producers.
See the?ADI’s website?for a complete listing of all the medalists in the American Distilling Institute’s International Spirits Competition.
Saint Lucia cocktail competition heads to NY
Miona Madsen - 5.14.2024 - The Spirits Business
The third instalment of the Spirit of Saint Lucia cocktail competition will take place at the New York Rum Festival on 8 June.
After two successful competitions in Miami and Chicago earlier this year, the event’s third instalment will take place in New York.
Bartenders are invited to participate in the competition, hosted by Bounty and Reàl in ‘a harmonious fusion of Caribbean heritage and modern mixology’.
The winner will receive US$1,500 (€1,390/￡1,200) and a trip to the island of Saint Lucia; second place will be awarded US$500 (€460/￡367), and third place will receive US$225 (€210/￡180).
The New York winner will join the ranks of the winning bartenders?Elizabeth Diaz from Miami?and Mike Finn from Chicago.
The event is sponsored by Reàl Ingredients, a manufacturer of cocktail syrups and Saint Lucia-based Bounty Rum, which must be incorporated into the cocktail.
Participants are expected to?exhibit?creativity by crafting a unique cocktail that draws on Saint Lucia’s ‘diverse culture and natural beauty’.
Registration is open to all bartenders from 1-31 May via the Bounty Rum website, which also provides full rules for the competition.
The eight finalists will be announced on social media on 2 June and invited to compete live at the New York Rum Festival on 8 June, from 11.45am to 2pm.
Earlier this year, Bounty Rum partnered with?Mangrove Global to launch a domino tournament?in the UK.
CGA: dark rum rises 5% in GB on-trade
Nicola Carruthers – 05/13/2024 – The Spirits Business
Dark rum is experiencing a surge in popularity in Great Britain’s on-trade with its value increasing by 5% last year.
CGA’s latest On Premise Measurement Solution (OPMS) data for 2023 revealed rum trends in Britain’s bars, pubs and restaurants.
CGA noted that dark rum is now valued at ￡190.6 million (US$238.8m) with the subcategory’s market share increasing from 16.4% to 17.6%.
Meanwhile, white rum is also rising but not at the same rate as dark rum. White rum saw its volume share grow by 0.5% to 22.8% of all rum sold in Great Britain’s on-trade.
Golden rum still dominates the market with a nearly 60% share, despite slightly losing to both dark and white rum, CGA highlighted.
The biggest-selling channel in the on-trade, mainstream outlets, holds a 67.3% volume share of all rum sold in the market. This figure has seen a slight uptick of 0.5% over the past year.
Premium rum also rose slightly, gaining 1.5% of volume share at the expense of standard-priced rum.
Pubs and hotels are experiencing major gains in rate of sale (Ros), while other premium outlets seem to be experiencing significant losses, CGA found.
Premium pubs grew its volume share of rum by 1.5% last year, remaining the primary premium outlet for the category with nearly 47% of total volumes in the on-trade.
Hotels were the third-largest premium outlet for rum, representing 12.6% of volumes after a year-on-year rise of 1.1% in volume share.
Sales of rum in Great Britain’s on-trade reached ￡1.1 billion (US$1.4bn) in value in the 12 months to December 2023, overtaking whisky for the second year in a row.
Data from CGA by Nielsen IQ showed a 2% decline for rum, which holds a 14% share of all spirits sales.
KOLOA RUM COMPANY UNVEILS EXCLUSIVE "RUM RUSHER COCKTAIL" TO COMMEMORATE PARTNERSHIP WITH THE LAS VEGAS RAIDERS
Staff – 05/13/2024 – Koloa Rum Company
KALAHEO KAUAI, Hawaii, May 13, 2024 /PRNewswire/ -- Known as "The Spirit of Aloha" and The Ultra Premium Rum of the Las Vegas Raiders, Koloa Rum Company is delighted to announce the launch of its new Rum Rusher Hawaiian Rum Cocktail in collaboration with the Las Vegas Raiders. This exciting partnership marks the continuation of a thrilling union between the two iconic brands, allowing fans to experience the fusion of Hawaii culture and Raiders spirit.
Packaged in a convenient four-pack, Raider Nation can purchase the Rum Rusher at multiple liquor stores throughout Nevada and Utah. In addition, individual Rum Rusher cans will be available for purchase at the Koloa Rum Company Store in Lihue, HI.
The Rum Rusher Cocktail is a result of a dynamic ongoing partnership between Koloa Rum and world-renowned mixologist Tony Abou-Ganim. As one of the leading bar professionals and industry pioneers, Abou-Ganim's expertise has been instrumental in crafting this unique and flavorful cocktail.
Boasting 15% ALC/VOL, the Rum Rusher is a harmonious blend of Koloa White Hawaiian Rum, natural flavors such as orange, pineapple, and lime juice, as well as organic agave syrup. It will be available in sets of four 12 fl. oz. cans (355 ml).
"The Rum Rusher Cocktail is a testament to our commitment to creativity and innovation, and embodies the essence of Koloa Rum and the Raiders," said Bob Gunter, president and CEO of Koloa Rum Company.
Koloa Rum invites fans to taste the bartender version of the Rum Rusher at the Twitch Lounge and concourse bars inside Allegiant Stadium.
Koloa Rum encourages fans to drink responsibly. To find the Rum Rusher near you, visit KoloaRum.com .
About Koloa Rum Company
Established in 2009, Koloa Rum Company produces artisanal, single-batch Hawaiian rum and ready-to-drink cocktails at its distillery in Kalaheo, Kauai and operates the island's first and only distilled spirits Tasting Room and Company Store. The company's award-winning portfolio includes its premium Kauai White, Gold, Dark, Spice, Coconut, Cacao and Coffee rums in addition to ready-to-drink cocktails. Products are available for purchase online, at select retailers nationwide, and in Western Canada, Italy, Germany, Austria, Czech Republic, France, the UK, Ukraine and Japan. For more information, visit https://koloarum.com/ .
MEDIA CONTACTS:
Jenerate PR
Jennifer Polito
Dianne Mercado
(808) 281-2088
SOURCE Koloa Rum Company
Cuba may import sugar, rum industry pressed amid disastrous harvest
Marc Frank – 05/09/2024 – Reuters
HAVANA, May 9 (Reuters) - The Cuban sugar harvest is winding down at the lowest tonnage since 1900, forcing the government to import and putting more pressure on its domestic rum, soft drink and pharmaceutical industries, according to official reports, two economists and a rum industry source.
President Miguel Diaz-Canel said at the end of April that the state-run industry had produced 71% of the 412,000 metric tons planned, or just shy of 300,000 metric tons, and would mill into May.
Cuba produced 350,000 metric tons in the last harvest and while some sugar mills remain open, yields drop sharply in May as hot, humid weather sets in, accompanied by summer rains.
“This means we will have to import and, of course, less sugar means there is less syrup and alcohol for various industries and, of course, rum,” said Cuban economist Omar Everleny.
The communist-run Caribbean island nation was once the world’s top sugar exporter, and produced 8 million metric tons of raw sugar in 1989, before the collapse of its former benefactor, the Soviet Union, sparked a steady decline.
Everleny said government data released this week showed the production of sugar cane-based alcohol used for various products from rum to pharmaceuticals was down more than 50% since 2019, as was most manufacturing since tough new U.S. sanctions and the COVID-19 pandemic gutted the import-dependent country’s foreign exchange earnings and kicked off a grueling economic crisis that continues today.
The crisis has dramatically reduced supplies of fertilizer, fuel and other inputs needed to grow and harvest cane and spare parts for mills, devastating the harvest.
Cuba has historically consumed up to 700,000 metric tons of sugar annually and exported the rest.
Unlike the pharmaceutical sector and other industries that can import sugar-based raw materials, rum makers must use Cuban ingredients to maintain brand identity.
For the rum industry, domestic alcohol prices are up 46%, a well-placed industry source said, requesting anonymity.
Some Cuban mills opened briefly this season just to produce molasses that can be distilled into alcohol for rum, and that did help, the source said, ”but comes nowhere near solving the issue. The situation is dire.”
Tanduay a Newcomer in China Captures Attention with Asian Rum Offerings
Staff – 05/13/2024 – Travel and Tour Word
Even though it’s new to China, the Philippine rum label Tanduay is steadily earning notice from consumers, acquainting them with the realm of Asian rum.
“The Asia Pacific market, which includes China, was a big driver of Tanduay’s international business in 2023, which grew by 59.24 percent versus that of 2022. Our international sales also increased by 60.54 percent last year compared to the previous year,” said Marc Ngo, Tanduay International Business Development Manager and Senior Brand Manager.?
He added that one of their focuses is penetrating the bars around the country.?“Our objective is to elevate the cocktail experience of the Chinese market,” Ngo pointed out.?
Joseph Zhang, Marketing Manager for HengTe Selection Trading, Co., Ltd., Tanduay’s distribution partner in China, said the rum category, along with tequila, is experiencing growth in the Chinese market because of young consumers who have a penchant for cocktails.?“Our goal is to educate consumers about Tanduay — its history, sugarcane varieties, craftsmanship, and unique taste, through digital media. This approach has so far helped us in raising awareness for the brand,” he said.?
In 2023, Tanduay made significant progress in mainland China, introducing its products to shelves in key cities like Beijing, Shanghai, Tianjin, Guangzhou, and Zhengzhou. While the initial sales volume was modest, these placements signal a promising beginning for the brand.
To enhance its visibility, Tanduay took part in the 109th Food and Drinks Fair in Shenzhen and organized various tasting events. Additionally, its products became accessible to consumers through online platforms like JD.com and Taobao.
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Zhang mentioned that Tanduay White Rum and Boracay Coconut Rum are currently the most popular among the brand’s offerings. “The main market for imported spirits like Tanduay is Gen Z. They enjoy mixing it in cocktails and prefer beverages with lower alcohol content,” he explained.
Looking ahead to 2024, Zhang outlined plans to further develop Tanduay’s image and expand its market presence through more tasting events and marketing campaigns. “Our goal for this year is to achieve a 50% increase in sales,” he added.
Celebrating its 170th anniversary in 2024, Tanduay is aggressively growing its international footprint. Presently, Tanduay products are available in various countries including China, the U.S., Singapore, Qatar, United Arab Emirates, France, Germany, Belgium, the Netherlands, Luxembourg, the United Kingdom, Austria, Poland, Georgia, Armenia, the Czech Republic, Costa Rica, Canada, New Zealand, Ukraine, and Taiwan.
Hensol Castle Distillery launches its own spiced rum
Elizabeth Birt – 05/10/2024 – South Wales Argus
Operating from the cellars of the 400-year-old, Grade-I listed castle, the distillery expanded its portfolio after enjoying success with its award-winning gin range.
The rum selection features two flavours: Hensol Castle Spiced Rum (40 per cent ABV) and Hensol Castle Cherry Spiced Rum (38 per cent ABV).
The spiced rum is now available in 31 Asda supermarkets throughout Wales for ￡27 a bottle, while the cherry variant is exclusively available from the distillery.
The spiced rum's production involves a fourth distillation, introducing a blend of responsibly-sourced exotic spices and an infusion of Welsh water. Flourishes of black pepper, nutmeg, cinnamon, citrus peels, and all spice berries are accentuated by a touch of dark chocolate and caramel.
Hensol Castle Distillery managing director, Chris Leeke said: “We’re thrilled that Hensol Castle Spiced Rum is now going to be found on the shelves of 31 Asda supermarkets and hope that rum lovers enjoy what we’ve created.”
Jamaican Rum Brand Wray & Nephew Launches Fund To Support Black Businesses
Aria Bell – 05/13/2024 – Finance Yahoo
Wray & Nephew, the Jamaican rum owned by Italian liquor brand Campari has launched a new grant program to support Black business owners living in the UK.
In the past several months, diversity and inclusion has been a hot topic in the UK’s beverage industry. Wray & Nephew has created a new funding initiative, which was added to Wray Forward, the brand’s professional development assistance effort, according to The Drinks Business. The program was founded in partnership with Foundervine, a company that believes in “backing Black business” by making resources that are fundamental to any start-up enterprise accessible to entrepreneurs of color living in underprivileged communities.
“Black founders face numerous limitations, including restricted access to capital, networks and opportunities,” Izzy Obeng, co-founder of Foundervine, said in an interview with The Drinsk Business. “In 2024, we’re aiming to help more Black founders and entrepreneurs by breaking down these barriers and providing tailored support and resources. We’re delighted to be working with Wray & Nephew to equip Black founders with the tools and knowledge needed to navigate the entrepreneurial landscape successfully.”
There will be three pricing tiers for winners with the highest amount offered to be $3198, the second-highest $1,599 and the final grant being $532. Small business owners will have the opportunity to win these grants through an evening series Wray Forward will host called “Pitch Nights,” where founders have the chance to network and collaborate to scale their organizations.
In addition to finding an inclusive community of like-minded people, grant and program participants can attend the nine “Building Business Workshops” of their choice that have experts sharing information in the areas of personal branding, securing partnerships, having a law-abiding business and more.
According to data discovered by done by the Greater London Authority, Black-owned businesses only make up 4% of businesses in the UK even though they employ over 70,000 citizens per Foundervine. Furthermore, Wray & Nephew did research that concluded 68% of Black founders feel there aren’t many resources extended to them on their independent practice journey, and that 1:5 entrepreneurs of color have uphill battles when it comes to fundraising reported The Drinks Business.
The Drinks Trust, the Wine & Spirit Education Trust and the Wine and Spirit Trade Association are teaming up with the Equity Diversity & Inclusion sector in the drink industry to ensure advancements are being made.
Brugal’s New Premium Rum Used Unique Toasted Barrels to Infuse It With Hints of Chocolate
Jonah Flicker – 05/09/2024 – Ca Movies Yahoo
There are several different rums produced in the Dominican Republic, but one of the best known comes from Brugal. This brand has been around since 1888, but it’s keeping things current with the launch of a new limited release that was aged in barrels seasoned with toasted cacao beans.
The new rum is called Colección Visionaria, and produced using what the brand calls an aromatic cask toasting technique developed by fifth generation Brugal maestra ronera Jassil Villanueva Quintana. What this means is that this 100 percent Dominican rum was finished in a barrel that was given a very unusual treatment after its initial maturation in bourbon barrels and sherry-seasoned European oak casks. Virgin European oak casks were toasted with local cacao beans, which are normally used to make chocolate, to infuse the wood with flavor that would then transfer into the spirit during the secondary maturation. The beans were removed before adding the rum to the casks, and according to the brand no sugar or additives were used in this particular rum.
The concept behind the release is supposed to be about translating the flavors and sensorial experiences of the Dominican Republic through the rum. “One of my most cherished childhood memories is walking amongst the cacao trees surrounding my family home,” said Quintana in a statement. “I remember the lush and green cacao fields, the bittersweet scent of the cacao pods, and the rich aromas of roasted beans.” The result, according to the tasting notes, reveals chocolate, toasted oak, and citrus on the nose, followed by vanilla, caramel, dark chocolate, and dried fruits on the palate.
Just four batches of Colección Visionaria Edición 01 will be distilled and released globally with an SRP of $100. The rum is just rolling out this week, so it might be hard to find online at the moment, but check your local liquor store to see if it’s arrived. In the meantime, you can purchase other bottles in the Brugal lineup from ReserveBar.
Spirits Sales Have Fallen This Year as the Industry Faces a New Normal
JONAH FLICKER – 05/13/2024 – Robbs Report
Let's not mourn the passing of the spirits industry just yet, however.
?Earlier this week, beverage industry website the Spirits Business cited a new report showing that spirits sales in the U.S. were down by nearly 3 percent in the year leading up to March of 2024. That’s clearly bad news for the industry and the distilleries who actually make the spirits, and while the future remains uncertain, this is not the only pessimistic reporting as of late.
The report cited comes from SipSource, a data crunching tool run by the Wine & Spirits Wholesalers of America to cover sales figures from wholesalers and liquor retailers around the country. The numbers show that spirits sales were down 2.7 percent from April 2023 to March 2024, while wine sales were down 8.3 percent. And there seemed to be a dip at the very end of that period, with spirits sales down 5.2 percent from January to March, and wine down 10.9 percent over the same period. “Wine and spirits categories are currently underperforming expectations and have started the year in a slump,” said SipSource analyst Dale Stratton in the report. “Most categories and channels will likely break out of their slumps and significantly improve their performance, while others will continue to struggle the entire year.” He went on to cite a number of factors that could be contributing to this decline, including inflation and gas prices.
This is not the only warning sign for the spirits industry, as some of the biggest drinks corporations have issued reports that show their own declines. Last month, Constellation Brands reported a decline of 6 percent across its wine and spirits portfolio, which includes well-known brands like High West, Casa Noble Tequila, and Svedka Vodka. The company’s overall earnings were up, however, thanks to an 11 percent increase in sales of its beer brands, which include Mexican beer giants Modelo and Corona.
Pernod Ricard, the company behind Jameson, Redbreast, Martell Cognac, and Absolut Vodka, said that sales fell by 11 percent in the U.S. over its third quarter. According to a recent Reuters story, Pernod pointed at retailers cutting high-end spirits from their inventories, which sold well at the height of the Covid pandemic but have declined as things began to normalize. The Chinese market, traditionally important to high-end spirits, showed significant decline as well for Pernod, while sales rose by 8 percent in India. In January, shares of Diageo decreased in value after reports that major brands like Casamigos Tequila slipped by 14 percent in America.
Campari Group, which owns Espolon Tequila, Wild Turkey, and Glen Grant, recently reported essentially a flat sales landscape, with a .4 percent decline in the U.S. market. This was certainly due in part to Wild Turkey sales dropping by more than 10 percent due to “shipment declines” here and in Australia—traditionally a big market for this bourbon—while Espolon and the Campari brand itself showed growth. Speaking of bourbon, earlier this week Kentucky news station WDRB reported that Heaven Hill was offering buyouts to 14 workers at its bottling plant due to what it called a softening market, something that the UFCW Local 23D union was not happy about. But Heaven Hill, which is privately owned, told WDRB in an email that the company is “outperforming its competitors as a whole,” and plans remain on track to open a new $135 million distillery in Bardstown, KY that will double its production.
As to be expected, there is some conflicting information here as companies try to put their best spin on poor showings. But all of this doesn’t mean the spirits industry is about to collapse anytime soon–if anything, it could just indicate stabilization for a spirits market that has had consumers paying some extreme prices over recent years. According to SipSource, spirits sales over the rest of 2024 are likely to improve, although they might not reach the heights of a few years ago. In other words, the new normal could be more, well, normal, which ultimately would be a net positive for people looking for an affordable bottle of whiskey.
Sober minded | Why young Americans are abstaining from alcohol
Staff – 05/13/2024 – Deseret.com
I lived in the French Alps for nearly six months while in graduate school, ending workdays with long hikes in rugged mountains, eating more than my fair share of freshly baked baguettes, and wandering down cafe-lined streets watching locals sip glasses of wine as meals stretched on for hours and warm wishes of camaraderie and abundance were toasted.
There, I learned that in French, santé is synonymous with the English “cheers.” It also translates to “health.” I’m not sure if that’s the etymological intention, but it certainly gave me pause for reflection, mostly because it conveyed a very different relationship to alcohol than the one I see unfolding in my own culture. It also is underpinned by the irony of a toast for health being associated with alcohol — something that we’re finding has objectively unhealthful qualities.
Today, young people in the United States — and other countries around the world — are drinking less than ever before. According to Pew Research Center, adults ages 18 to 34 who reported that they ever drink dropped from 72% in 2001-03 to 62% in 2021-23.
A 2023 Gallup survey found that the rate of drinking has declined by 10% in that same age group bracket over the last two decades. It seems that temperance is tapping into the roots of modern-day life.
Our relationship with alcohol in the United States has been fraught for about as long as we’ve been a country. To drink or not to drink has long been the subject of social judgment, public scrutiny and moral division. While what we consume is a deeply personal decision, alcohol tends to carry more weight than most other food or drink choices.
Historical angst around alcohol dates back to the late 19th century with the beginnings of an aggressive temperance movement and, later, more than a decade of nationwide prohibition in the 1920s. The temperance movement had numerous religious affiliations and opposed alcohol’s impact on moral character.
In this era, alcohol was framed as the cause of many social problems such as domestic violence, poverty and crime, so constitutional prohibition was enacted to try to remedy these social ills by banning the assumed cause. Today, opposition to alcohol seems to stem more from education and personal choice around general physical and mental well-being.
In response to emerging research about the impacts of alcohol consumption on our health, young adults are forging a new relationship with alcohol than generations before them.
I am Gen Z, while my partner is millennial. We like to keep a healthy amount of generational rivalry present in our relationship, so we have a crudely made Venn diagram taped lopsidedly to our fridge that features “millennials” on one side, and “Gen Z” on the other. Most of the diagram’s contents are lighthearted nods to generational icons and trends. Gen Z gets “Noah Kahan” and “TikTok,” while my partner has claimed “Blink-182″ and “avocado toast” for the millennials.
I don’t often feel like the line between millennials and Gen Z is all that apparent, even when it comes to drinking alcohol or not drinking it. Both generations drink less than those before us. But a closer look shows that abstaining from drinking is more of an identifier for Gen Z than it currently is for millennials.
Research on Gen Z alcohol use
Javier Lastra, one of the lead authors of a 2017 Berenberg Report on generational drinking habits, found that Gen Z (individuals born between 1997 and 2012) was drinking 20% less per capita than millennials who, in turn, were drinking less than Gen Xers and baby boomers did at the same age. One of the main reasons they found to drive this shift? Health, both mental and physical.
“There’s generally a greater awareness by Gen Z (compared to previous generations) about health,” Lastra explains. “They seem to be a much more health-conscious generation than previous ones.”
There is also evidence of increasing health consciousness across all age groups. A 2023 Gallup survey found that 39% of all adults and 52% of young adults (age 18-34) view consuming even one or two drinks a day as bad for health, representing a marked increase in this point of view just since 2018.
Public interest in mindfulness meditation has exploded over the last several decades, the fitness industry is booming to meet rising consumer demand for workout classes and gym services, and there is an increase in the use of health-tracking technologies such as apps and smartwatches that measure sleep, calories and other physiological metrics of health.
Amid all this information about how to be healthier, live longer and look better, decisions around alcohol are just one piece in the broader puzzle.
In recent decades, there has been a proliferation of research suggesting that alcohol is bad for human health.
In 2023, the World Health Organization announced that there is no safe amount of alcohol to drink; any amount of alcohol has adverse health impacts such as increased risk of heart disease, high blood pressure and mental health problems. Research from the International Journal of Environmental Research and Public Health shows that alcohol consumption, no matter the amount, alters how our body functions at a cellular level, “triggering a number of adverse effects.” This includes disrupting neural stem cell growth, interfering with the communication between nerve cells and causing inflammation that inhibits our mitochondria’s energy production. That can manifest in poor sleep, inflammation in the body, high blood pressure and other negative effects.
Alcohol is classified as a group 1 carcinogen by the International Agency for Research on Cancer, placing it among other high-risk carcinogens such as asbestos and harmful radiation. With information like this at hand, it would make sense for anyone of any age to be at least a little scared of alcohol.
History is important, too.
“Young people have seen the behavior of their parents and grandparents and have dealt with family, friends ... people that they know (deal) with addiction issues, probably more than any other generation,” says Gary Frankel, a licensed social worker in Vermont who conducts individual and group therapy sessions for young adults.
According to the National Council on Alcoholism and Drug Dependence, more than half of all adults have a family history of alcohol abuse or problem drinking. It’s not uncommon for families in America today to be dealing with the repercussions of generations of familial strife driven by these issues. In that context, it’s simply hard to view alcohol as “cool.” It’s hard to view anything that’s wrapped up in negative feelings as “cool.”
“There’s generally a greater awareness by Gen Z about health. They seem to be a much more health-conscious generation.”
Red Brick Road, a U.K.-based ad agency, conducted a report focused on Gen Z drinking habits in the United Kingdom and found that 51% of Gen Z respondents reported that their “online image” was a factor when going out “socializing and drinking.”
Lastra found the same thing in a separate report: Gen Z is drinking less, in part due to fear that drunk escapades and reckless decisions will be etched into permanence on the internet.
“(Respondents) were afraid of being humiliated,” Lastra explains. But more and more, instead of making choices to avoid negative consequences, Americans are incentivized by the positive effects of their health-based choices.
Health concerns and alcohol use
Just a few weeks ago, I drove by a billboard on Utah’s I-215 that read “Self-care is cool.” In a 2022 McKinsey report, around 50% of U.S. consumers reported wellness was a top priority in their daily lives, which represented an 8% increase from 2020.
This newfound dedication to health seems to be pushing Americans, particularly young adults, away from alcohol. By some estimates, more than a third of people under the age of 27 in the United States abstain from alcohol for the sake of their mental health. And many more take a more moderate and flexible approach.
“Gen Z is drinking less alcohol and I think that where that might stem from is social things like what mental health and physical health is and what it means to be a well person,” explains Frankel.
But prioritizing health isn’t as simple as just abstaining from alcohol. In a culture that’s drinking less, there’s a need to navigate new ways to socialize that don’t involve drinks at the bar with friends.
For centuries, the social hubs where alcohol has traditionally been served have been proven to bring people together and facilitate social connections that benefit health. Robin Dunbar, an anthropologist at Oxford University, found that living near a pub significantly increased an individual’s happiness thanks to the in-person connections and local community fostered through frequent pub visits.
As I flash back to the hum of voices and the rich sound of laughter echoing down the cobblestone streets of that French village, glasses clinking santé, I can’t help but wonder what changes await as the sober-curious movement gains traction. But one issue to be aware of as alcohol becomes less prevalent in the U.S. is creating solutions to mitigate ongoing social division and isolation.
Historically, churches, offices and clubs have been important hubs of social interaction that facilitate community and benefit mental health, but these institutions are declining. In 2020, a Gallup survey found that only 47% of Americans said they belonged to a church, a 23% decrease since 1999.
The share of individuals who work remotely has skyrocketed over the past two decades. And, thanks to the iPhone and other technological advancements, more socializing is happening digitally. While there is merit to being connected digitally, in-person interactions have been shown to have a greater benefit to overall well-being, and American adults are now spending 30 percent less time face-to-face socializing than 20 years ago. Simply put, we are spending less time with other people and that is taking a toll on our health.
Social disconnection, an increasing phenomenon in our culture, can have devastating impacts on long-term health. Researchers from Brigham Young University suggest that poor social relationships or the lack of social community can have health impacts of a similar magnitude to smoking and alcohol consumption.
Drinking alcohol is objectively harmful to health, but, when it comes to curtailing the negative impacts of social isolation, there could be something to be said for the health benefits of finding new ways to go out with friends.
The future of alcohol consumption in the United States is uncertain, but it’s clear that we are all drinking — or not — and hanging out — or not — in markedly different ways than in generations past. Where this will lead in terms of net health and happiness remains to be seen.
As Americans grapple with the idea of what it means to be a healthy person, our culture is at an inflection point, and it’s hard to know whether and how alcohol fits into the equation. It is increasingly apparent that being a healthy person is more complicated than simply being sober. By approaching alcohol more mindfully, young adults are providing space for consumption to be an ongoing and deeply personal choice, rather than a categorical decision. Cheers, or santé, to that.
US Wholesaler Data March: Inventories Slightly Moderating, Sales Still Sluggish (Additional Coverage)
Staff – 05/10/2024 – Jeffereis
Data from the US Census Bureau points to a gentle improvement in the inventory/sales picture in Mar. Across beer, spirits, and wine, inventory/sales decreased to 1.55x in March vs February and January 1.63x and May 2023 peak 1.66x. This remains above the 3yr average of 1.46x. As the consumption picture starts to improve, excess inventories will be digested. If growth stalls, there is a risk that shipments continue to underperform depletions.
What to do with this data? US Census Bureau provides monthly wholesale trade data for total alcohol, across beer, spirits, and wine. As a reminder, the US alcoholic beverages supply chain consists of three steps: (1) manufacturer to wholesaler = company shipments (STWs) - i.e., what we care about for supplier reporting; (2) sales from wholesaler to retailers = this data (STRs); & (3) retailer sales to end consumers = consumer off-take. We use NielsenIQ data as a snapshot for consumer off-take trends but acknowledge that it doesn't capture the full picture, such as on-trade or independent liquor stores.
March STR trends slightly better. US total alcoholic bevs wholesaler sales to retailers (STRs) increased +1.8% in March (YoY) after Feb/Jan -5.2%/-6.0%. However, earlier timing of Easter could have provided a boost to STR trends, and we would also highlight an easier basis of comparison (March -2.1% vs February +1.3% and January +0.3%). Within this, we believe spirits-based RTDs are outperforming other spirits/beer/wine. See our report Ready To (Not) Drink on the risk that spirits industry growth takes longer to come back until the RTD cycle rolls-over.
Where are inventories relative to history? March inventory/sales is running at 1.55x, ahead of February and January 1.63x, December 1.58x and the 3yr average 1.46x but slightly below the May peak 1.66x. Inventories across beer, spirits and wine at the wholesaler level continue to run ahead of historical levels. The decrease in inventory/sales ratio this month owes to a slight improvement in STRs and a small decrease in the absolute level of inventories.
How to think about destocking risk? Growth normalisation has resulted in volatility between shipments and depletions after the pandemic supercycle. We note that: (1) the data is across beer, spirits and wine, and therefore we cannot isolate sub-sectors of total beverage alcohol; (2) Price increases have likely led to some inventory build / lumpiness between months; & (3) If growth accelerates, high levels of inventories should be digested; however, if growth stalls, there could be a period where shipments underperform depletions.
US Spirits: industry digesting the COVID supercycle. The market has largely come to terms with the US reset (see our DISCUS 2023 review here) as it digests three above-average growth years. See our report on tequila growth normalisation here. Our de-premiumisation tracker indicates that whilst there are still pockets of premiumisation, the pace of uptrading has moderated, with some signs of downtrading and increased promotional activity in certain categories / price points.
Wholesaler vs Nielsen. March wholesaler sales -1.8% compares to spirits +5.3% (including spirits based RTDs), beer -0.6% per Nielsen. See report here. Remember, Nielsen covers <20% of the alcohol bevs industry (c.60% independents & liquor stores) with on-trade a further 20%. We believe the spirits industry, across all channels, is growing around c.2%, with roughly half the growth from sprits and half from spirit-based RTDs.
Exposure to US. c.45% DGE profits, 40% Remy, 25% Pernod and Campari, ABI c.30%, Heineken 5%.
Alcoholic Beverages - TBA Wholesaler Inventory / Sales Ratio Eases Sequentially
Staff – 05/09/2024 – TD Cowen
?Inventory/Sales Ratio Eases Sequentially. Today's U.S. Census data showed that the wholesaler inventory/sales ratio went down to 1.55x in March, from 1.63x in February. Monthly wholesaler sales were up 1.8% YoY and 2.7% sequentially, while inventories were down 4.7% YoY and 1.9% sequentially. While sales comps will continue to be more favorable, inventory comps will also ease, meaning that we will need to continue to see improvement in underlying two year consumer takeaway trends to ease a current inventory/sales ratio that still remains elevated relative to historical levels, which for context has averaged 1.39x over the past five years and 1.34x for the three years through February 2020, prior to the start of COVID.
We view today's reading as positive, and while one month does not constitute a trend, we are encouraged to see an acceleration in TBA sales coming in tandem with a MSD reduction in inventories.
While today's reading covers all Total Beverage Alcohol sales and inventories, we believe it should nonetheless be viewed as a modestly positive read through across distilled spirits, and for MGPI's contract manufacturing business in particular. After exiting what will be the most challenged quarter of the year for them in 1Q24, the company should improve performance in brown goods as it sells through more new distillate to large multinationals, with the vast majority of contracts fully committed for 2024. We also note that with more of a focus on building out its branded spirits business, MGPI's premium plus segment will likely continue to far outpace the industry, which has the potential to become more pronounced with additional acquisitions of high growth brands comparable to Penelope Bourbon, which remains a key capital allocation priority.
US spirits sales drop 2.7% (Additional Coverage)
Nicola Carruthers – 05/09/2024 – The Spirits Business
Spirits sales in the US fell by 2.7% in the 12 months to March 2024 as rising prices impacted consumer spending.
The Wine & Spirits Wholesalers of America (WSWA)’s SipSource tool covers wine and spirits distributor sales for hundreds of thousands of on-trade and off-trade accounts in the US.
The latest quarterly report noted the spirits sales fell by 5.2% from January to March 2024, while wine slipped further by 10.9%. For the year to March 2024, wine suffered more than spirits with a drop of 8.3%.
“Wine and spirits categories are currently underperforming expectations and have started the year in a slump,” said SipSource analyst Dale Stratton.
“Most categories and channels will likely break out of their slumps and significantly improve their performance, while others will continue to struggle the entire year.”
In the on-trade, spirits sales were stagnant (down by 0.1%) for the first quarter (Q1) of 2024, while wine struggled with a decline of 6.5%.
Despite a return to pre-pandemic levels for spirits in the on-trade, SipSource noted that data for the 12 months to March 2024 showed a combined wine and spirits decline of 8% in the channel.
“The cost of going out to dinner may have finally caught up with the average consumer,” Stratton explained. “While the Consumer Price Index (CPI) in March was up 3.5% compared to 6.5% in December, continued inflationary pressures, raising gas prices, as well as the gap between the cost of food and beverage at home vs away from home is impacting consumer spending.”
Despite the price of spirits away from home rising by 5% in March compared to at-home prices rising only by 1.4%, SipSource said the category’s sales in the on-trade have continued to show resilience.
The analyst said spirits growth is being led by pre-mixed cocktails, which soared by nearly a quarter (up 24.6%).
SipSource expects spirits sales to improve in 2024 but are unlikely to get back to the growth rates seen in 2022. Wine is also predicted to stabilise and show a moderate increase in the second half of the year.
“The month-to-month data is going to be bumpy going forward, mostly based on variations in the number of delivery days each month,” Stratton added. “It’s also important to note that wholesaler inventory levels remain at an all-time high which could impact shipments from suppliers.”
In February, a SipSource report stated that the premiumisation trend was ‘dead’, with year-end losses for both wine and spirits.
Consumer sentiment tumbles as inflation fears surge
Staff – 05/12/2024 – CNBC
Consumer sentiment slumped as inflation expectations rose, despite otherwise strong signals in the economy, according to a closely watched survey released Friday.
The University of Michigan Survey of Consumers sentiment index for May posted an initial reading of 67.4 for the month, down from 77.2 in April and well off the Dow Jones consensus call for 76. The move represented a one-month decline of 12.7% but a year-over-year gain of 14.2%.
Along with the downbeat sentiment measure, the outlook for inflation across the one- and five-year horizons increased.
The one-year outlook jumped to 3.5%, up 0.3 percentage point from a month ago to the highest level since November.
Also, the five-year outlook rose to 3.1%, an increase of just 0.1 percentage point but reversing a trend of lower readings in the past few months, also to the highest since November.
“While consumers had been reserving judgment for the past few months, they now perceive negative developments on a number of dimensions,” said Joanne Hsu, the survey’s director. “They expressed worries that inflation, unemployment and interest rates may all be moving in an unfavorable direction in the year ahead.”
Other indexes in the survey also posted substantial declines: The current conditions index fell to 68.8, down more than 10 points, while the expectations measure fell to 66.5, down 9.5 points. Both pointed to monthly drops of more than 12%, though they were higher from a year ago.
The report comes despite the stock market riding a strong rally and gasoline prices nudging lower, though still at elevated levels. Most labor market signals remain solid, though jobless claims last week hit their highest level since late August.
“All things considered, however, the magnitude of the slump in confidence is pretty big and it isn’t satisfactorily explained by” geopolitical factors or the mid-April stock market sell-off, wrote Paul Ashworth, chief North America economist at Capital Economics. “That leaves us wondering if we’re missing something more worrying going on with the consumer.”
The inflation readings represent the biggest pitfall for policymakers as the Federal Reserve contemplates the near-term path of monetary policy.
“Uncertainty about the inflation path could suppress consumer spending in the coming months. The Fed is walking a tightrope as they balance both mandates of price stability and growth,” said Jeffrey Roach, chief economist at LPL Financial. “Although it’s not our base case, we do see rising risks of stagflation, a concern the markets will have to deal with, in addition to the impacts from the presidential election.”
At their meeting last week, Fed officials indicated they need “greater confidence” that inflation is moving “sustainably” back to their 2% goal before lowering interest rates. Policymakers consider expectations a key to taming inflation, and the outlook now from the Michigan survey has shown consecutive months of increases after falling considerably between November and March of this year.
Market pricing is pointing to a strong expectation that the Fed will begin reducing its key borrowing rate in September after holding it at its highest level in more than 20 years since July 2023. However, the outlook has been in flux even with Fed Chair Jerome Powell indicating in his post-meeting news conference that it is unlikely the central bank’s next move would be a hike.
The next important data point for inflation comes Wednesday when the Labor Department releases its consumer price index report for April. Most Wall Street economists expect the report to show a slight moderation in price pressures, though the widely followed CPI index has been running well ahead of the Fed’s target, at 3.5% annually in March.
Until the next newsletter!
Federico Hernández - The Rum Lab
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2 个月Do you sell raw whiskey