Olly Wehring's beverage industry blog - from just-drinks.com

World Cup comes to England

Thu, 11 Mar 2010 15:25:00 GMT

The World Cup trophy came to the UK today, after its short flight from Rome earlier this week.

I was lucky enough to be invited to a Coca-Cola-sponsored FIFA event this morning in London, to get familiar with the iconic trophy before it continues its journey around the world before touching down in South Africa in time for the beginning of the tournament on 11 June.

Speaking at the event, hosted at the South African High Commission in Trafalgar Square, Coca-Cola Great Britain president Sanjay Guha spoke of the firm's Replenish Africa Initiative (RAIN) 'Water for Schools' project to help provide safe drinking water for schools in Africa.

"At Coca-Cola we are determined to use the power of FIFA World Cup to leave a lasting legacy for good across Africa, long after the final whistle has blown," Sanjay said after we'd enjoyed a live performance of the soundtrack to the World Cup.

Then, we filed past the guarded trophy for any football fan's dream - our photo opportunity.

What are the chances of the World Cup returning to these shores on 11 July?

"Bye, then!" I chirruped.

Michelle Russell, senior news reporter

SHOCK - Britons' Christmas booze bonanza

Thu, 11 Mar 2010 11:58:00 GMT

Incredibly, it has been revealed that adults in the UK regularly drank more alcohol than is officially good for them during the Christmas period.

If just-drinks had a printing press, consider it halted.

Ground-breaking research from the Drinkaware charity today shows that Britons' regularly exceeded daily intake guidelines for alcohol during December.

Still, with record visitors to the Drinkaware website, at least they knew what they were getting into.

Chris M, deputy ed.

Budget day looms

Wed, 10 Mar 2010 15:29:00 GMT

UK prime minister Gordon Brown has revealed the date for the Government's 2010 Budget announcement.

Drinks companies will discover the extent of any tax rises on their products on 24 March, when Chancellor Alistair Darling will unveil the annual Budget to Parliament.

Trade bodies are clamouring for the Government to hit the emergency stop button on its "tax escalator", which provides for a 2% above inflation rise on all alcoholic drinks in the upcoming Budget.

At current inflation, that would mean a 5% tax rise - at a time when most people in the private and public sectors have seen wages frozen as a result of the economic downturn.

Wine and beer tax is already up 20% inside two years, with spirits tax up around 16% in the same timeframe.

Surely, it is time for a break.

PepsiCo cuts loose from Woods

Mon, 01 Mar 2010 17:18:00 GMT

When sportsmen as successful as Tiger Woods fall, it’s a long way down and they can take many with them.

PepsiCo has become the latest major company to end its sponsorship deal with the disgraced world number one golfer Tiger Woods.

Slowly but surely his sponsors are backing away, with no definite date for his return to the green.

The news was probably to be expected given the media's spotlight on the golfer's private life.

Since media speculation broke last year over the golfer's extra-marital affairs, Woods has been dropped by Accenture and AT&T and both Tag Heuer and Gillette have reportedly slimmed down his role in their ad campaigns.

His 14-minute public television apology for “irresponsible and selfish” behaviour clearly did little to polish his reputation or help his sponsorship deals.

The only support for Woods appears to be from sports equipment giant Nike, which reportedly pays Woods $40m a year…and fellow philanderer and ex-president Bill Clinton, who is no stranger to public humiliation himself. He is said to have called the golfer to offer his support.

While Woods goes through the proverbial mill, the affair is also a reminder of the pitfalls that companies face when they tie themselves to celebrities - who, as we know, are capable of the same "indiscretions" as the rest of us.

Only that theirs make front-page news.

The big Coca-Cola secret

Fri, 26 Feb 2010 15:28:00 GMT

A secret recipe is not the only thing Coca-Cola Co has been hiding behind closed doors over the last few months.

No one is clear just how long Coca-Cola and Coca-Cola Enterprises have been thrashing out yesterday's announced deal.

If you listen to Coca-Cola's CEO, Muhtar Kent, then you would believe that talks have been ongoing prior to rival PepsiCo's deal to acquire control of its own bottlers.

Whatever timescale you pick, it appears that the companies have successfully shrouded the whole thing in secrecy - even from some of their own middle management level employees.

A number of such employees, from the Western European side of CCE, first found out that something was going on at about midday UK time yesterday.

Their immediate reaction, we understand, was to question whether the email was "some kind of joke".

Coke, CCE and Dr Pepper the dark horse

Thu, 25 Feb 2010 17:44:00 GMT

We've seen some fast-paced news days in our time on just-drinks, but today's Coca-Cola Co story is up there with the best of them.

Unlike the public tit-for-tat that precluded PepsiCo's deal to acquire its own major bottlers, Coca-Cola Co and Coca-Cola Enterprises (CCE) wrapped up their deal within 12 hours of the news breaking.

CCE and Coca-Cola Co did well to keep us all in the dark. Company officials spent the second half of 2009 actively briefing against a merger deal.

But, Coca-Cola Co CEO Muhtar Kent told analysts today that the two entered talks even before PepsiCo announced its own move.

CCE shares rocketed by more than a third today on news that shareholders will get some serious payback.

As we digest the deal, however, our eye has been caught by a dark horse lurking in the wings.

Enter Dr Pepper Snapple, which, via licence arrangements, is already pocketing $900m from the PepsiCo deal and looks set to reap another windfall from Coca-Cola Co and CCE, analysts believe.

With net sales looking up, Dr Pepper's prospects are looking a lot rosier for 2010 and into 2011.

Chris Mercer, Deputy Editor.

Diageo v Bacardi - Tick, tick, tick, tick... BOOM

Wed, 24 Feb 2010 15:21:00 GMT

Today's top story is certainly a cockle-warmer on a cold, damp Wednesday in February.

Diageo didn't so much fire a warning shot across Bacardi's bows yesterday (23 February), more set about the boat itself... with a bazooka. Not only does Diageo's statement make for an interesting read, but it is also a pretty long one – take a look for yourself here.

This is most unlike Diageo, which usually prefers to play the strong, silent type when it comes to disputes - witness how the firm chose to keep its head when all about it was losing theirs and blaming it on Diageo during last year's Scotland closure row.

Our take on the surprise reaction? Well, Diageo has been getting heat ever since it announced its move of Captain Morgan operations from Puerto Rico to the US Virgin Islands back in 2008.

A brace of more recent attacks, including one from Bacardi, however, was one poke through the bars too many. I've heard that Diageo was tiring of having to rebut the allegations to each individual who challenged them, choosing instead to give its full (and I mean full) and frank take on the matter.

Bacardi's response – all of three sentences - is short and sweet, much like that of the Puerto Rican government – two sentences.

Yet, in such a short burst of words, the two ask whether the US taxpayer is the one getting a rum deal here.

Heineken kicks off Brazil push

Thu, 18 Feb 2010 15:04:00 GMT

Heineken has wasted no time in using its connection with football to begin building presence in Brazil.

As just-drinks settled down to watch Arsenal's calamitous display against Porto last night, we noticed that the Netherlands-based brewer is offering fans the chance to watch the UEFA Champions League final from Brazil.

The final will take place in Madrid, but Heineken will take fans to Rio de Janeiro as part of its sponsorship of the tournament.

It is surely no coincidence that this competition has come about following Heineken's acquisition of FEMSA Cerveza.

Heineken is keen to use FEMSA's platform in Brazil to build the Heineken brand in what is the fourth largest beer market in the world. Brazil is also football 'maluco' and Heineken has already stated its plans to use football to "win" with Heineken in what is also A-B InBev's backyard.

To gain the chance to win tickets, fans are asked to test their rhythm in the first of three tests on Heineken's website. Guitar Hero players stand at a minor advantage, although one must question whether anyone unable to complete the task should be allowed to leave their house.

Chris Mercer, Deputy Editor

A funny thing happened on the way to The Macallan...

Tue, 16 Feb 2010 09:15:00 GMT

Number two in our haphazard, (hopefully) long-running series of drinks industry travel-related anecdotes.

Here's number one, to ease you back in.

At Heathrow's Terminal 5 yesterday (15 February) en route to Aberdeen for a dinner at Edrington Group's The Macallan distillery, the tannoy kicks up:

"Would Mr Rasmussen, travelling to Copenhagen, please make his way to gate A6 immediately, as the 'plane is ready to depart."

Not that Mr Rasmussen, surely?

Wine writers - criticising the critics

Tue, 09 Feb 2010 15:19:00 GMT

It's open season for critics of wine critics here in the UK this month.

Last week, US wine personality (I struggle still to find out what it is he actually does) Tim Hanni attacked wine critics en masse, claiming that the breed are of little use to the wine consumer in the street.

"We've created the false idea that to be a wine expert you have to have an almost supernatural palate," he told the Guardian. "But, ironically, if anyone really did have such a palate, it would disqualify them from being an oracle to those who didn't.

"Received wisdom holds that certain wines are simply the best, and that anyone who disagrees is stupid, unsophisticated, or both. That's more chaotic than giving people the confidence to drink what they like, no matter what the bottle costs, and no matter what food they enjoy it with."

(Granted, Hanni was pushing a questionnaire he has designed in partnership with Bibendum in the UK, designed to help consumers work out what tastes they prefer. Still, his opinion on wine writers warrants consideration.

Today, however, Tim Atkin – a wine writer – has countered Hanni's argument, going so far as to suggest: “Experienced wine critics are arguably more essential in a recession than ever.”

Do feel free to let me know which side of the fence you sit on. Indeed, if you tell me, I'll tell you.

I'll have to whisper it, mind.

Survey time - We ask the questions

Wed, 03 Feb 2010 11:34:00 GMT

At the beginning of last year, the performance of the drinks sector in 2009 was pretty easy to forecast. After all, as 2008 came to a close, it was clear that the prognosis for the following 12 months was not good. One year on, however, and the future is a little tougher to forecast.

So, just-drinks is asking its readers what they think 2010 has in store for our industry.

We've put together a short questionnaire, which will only take a few minutes of your time. Once the responses have been compiled, I will send you the results.

The survey is live now, so please dive in and have your say.

Rest assured that all responses will be treated in the strictest confidence and summary/average results presented.

Everything you always wanted to know about Champagne...

Tue, 02 Feb 2010 17:09:00 GMT

If, like us, you're based in the UK and, like us, you prefer your peers to believe that you know more than you actually do, then this little black book might come in handy.

Champagne Lanson is celebrating its 250th anniversary in the UK this year by offering a pocket guide to all things champenoise, ‘The Little Black Book of Champagne’.

The 52-page book offers a guide to the different taste profiles of malolactic and non-malolactic styles of Champagne and helps to put into context the role that taste should play when choosing Champagne.

Retailing at GBP5.99, the guide will be available free of charge to trade and consumers for a limited period by requesting a copy from here.

We've already put our order in.

Vodkat - Is this problem really an opportunity?

Fri, 29 Jan 2010 16:10:00 GMT

Diageo's legal victory against 22% abv 'vodka look-a-like' Vodkat last week has been hailed as "a major step in the legal protection of the vodka category" by the Gin & Vodka Association (GVA).

Vodkat brand owner Intercontinental Brands (ICB) is still mulling over a possible appeal against the High Court ruling that it was passing Vodkat off as a full-strength vodka, but what will the longer-term knock-on effects be of the Vodkat saga?

The brand sold nearly 9m litres, netting revenues of over GBP50m, in the period from its launch in May 2005 to late 2009 - making it the fastest growing spirits brand in the UK in that timescale.

Diageo and the GVA will argue that much of that growth was spurious, based on the mistaken consumer assumption that they were buying a regular vodka. But, it's still hard to escape the conclusion that there is demand for low-strength, mixable 'light spirits' like Vodkat.

At a time of unprecedented social concerns over the effects of strong alcohol, and with wine and beer both exploring lower-strength alternatives, is the time ripe to develop a mid-strength mixable category - stronger than wine, but weaker than full-strength spirits?

Given the Vodkat decision, it's hard at this stage to say what this category will look like, since it appears it can't even allude to a full-strength product like vodka or, say, gin.

But could a Vodkat-like product - albeit one with a less controversial name - be a hit with consumers? And who might emerge to lead this pioneering new category? A rebranded Vodkat from ICB? Or a brand-new product from a company like Diageo?

Whisky and haggis

Wed, 27 Jan 2010 15:18:00 GMT

Diageo is pushing its Talisker Scotch whisky as an accompaniment to food and haggis is top of the menu.

Whether you pour your Talisker onto your haggis, or merely sip it alongside, Diageo is keen to make more of the combination.

Haggis sales in the UK rose by 19% to GBP8.8m (US$14.2m) in 2009, said the Scottish Government on Monday (25 January), the date when Scots celebrate the life of national poet Robert Burns.

As two icons of Scottish culture, whisky and haggis could not be more different. One induces romantic images of glens, lochs and moors, while the other tends to conjure a wrinkled nose and a fear of stomach cramps. Have you guessed which is which?

Despite a rise UK demand for haggis, then, Diageo is sensibly looking to promote Isle of Skye-distilled Talisker as an accompaniment to food in general.

For one thing, haggis is still banned in the US.

UK out of recession

Tue, 26 Jan 2010 15:29:00 GMT

There may be grey skies overhead as winter continues in full swing, but it seems that the sun has finally begun to rise on the UK economy.

Yes, that's right, official figures show that the UK has emerged from more than a year of recession.

But, don't you get all get your hopes up too much. Figures show the economy rose by a mere 0.1% - less than expected - during the final three months of 2009.

Notionally, the country is on the mend.

If music be the drink of wine lovers..

Thu, 21 Jan 2010 15:21:00 GMT

For those who like to end a hard day with a rich, full-bodied glass of red, or a crisp white, but can't decide whether to have Mozart or Black Sabbath in the background.Berry Bros & Rudd appear to have the answer.

The UK wine merchant has devised a soundtrack to "enhance the taste and pleasure" of wine by up to 60%. Yes, you can measure it.

The firm's 'perfect playlist' is designed to accompany some of their most popular wines, with research by Berry Bros revealing that people record a change in the taste of a wine depending on the melody they hear.

"The past research suggested that there is a strong link between music and the enjoyment of wine, which makes perfect sense," says Katie Cooper, Berry's Wine Club Manager.

"Both evoke strong memories and feelings and, although these are highly personal, it was interesting to see that there were similarities in the songs we chose - we can't wait to see what our customers come up with."

Berry's chairman, Simon Berry, chose Joni Mitchell to accompany an Argentine Cabernet because of its "timeless appeal", and Master of Wine Alun Griffiths opted to drink Berry Bros Burgundy while listening to Neil Young's Four Strong Winds.

So whether you like some Mozart with your Mosel or Pink Floyd with your Pinot, Berry's is asking readers of its wine blog to suggest their perfect music and wine suggestions.

Corporate response to Haiti

Wed, 20 Jan 2010 15:29:00 GMT

In the wake of the Haiti earthquake last week, estimated to have killed as many as 200,000, just-drinks has published a piece on corporate help for the disaster relief effort.

Drinks firms, alongside companies from many other industries, have flocked to donate time and money to the relief effort. I'm sure there are more of you than we had space to mention here.

While the contribution is largely auxilliary, often in tandem with NGOs, just-drinks applauds those who have made an effort.

It is now commonplace for corporate social responsibility strategies to incorporate disaster planning.

And this goes further than public relations stunts. Global companies have a need to reassure employees and customers in all their business regions that they will respond.

Often private enterprise has a better logistics setup than Government, particularly in poorer countries. The Coca-Cola Co's distribution system is one of the best examples of this.

The key for companies is to work out the best way for them to help, rather than helping to create chaos via isolated relief strategies.

When Russia's beer bubble bursts...

Tue, 19 Jan 2010 15:22:00 GMT

SABMiller's bloated Russian beer sales point to a mighty hangover for brewers in the country in 2010.

A 34% rise in beer volume sales in Russia for SABMiller in its fiscal third quarter is dramatically out of kilter with the prevailing market trend in the country.

So dramatic, in fact, that it is a completely false bubble. Distributors in Russia spent December racing to stock their warehouses full to the brim of beer, ahead of a three-fold rise on excise tax in January. Carlsberg flagged up the trend in December.

Russia's beer market shrank by nearly a tenth in volume for the first nine months of 2009 and Carlsberg believes that the sector is facing a similar decline in 2010.

The vacuum left by the distributor stockpiling will exacerbate the situation.

Then, of course, there is the Russian Government's crusade against alcohol misuse.

Industry hits the ground running in 2010

Fri, 15 Jan 2010 17:40:00 GMT

Brewery blockades, Heineken's deal for FEMSA, alcohol strategy meetings and a trading update from Pernod Ricard - 2010 has started apace.

Just when we thought January's silent news agenda might require us to concoct some nefarious rumour within our good trade, this week has got 2010 off to a running start.

Heineken surprised us and many others by so swiftly securing a deal for FEMSA.

To be honest, we're a little disappointed with the efficiency and amicable nature of the whole thing. No bidding battle, rumours of family tussles or public war of words, just a reasonably straightforward deal at a price everyone agrees is reasonable. Where's the fun in that?

Still, we've seen a little more drama over at A-B InBev in the last week. After announcing job cuts across Western Europe, the brewer has seen workers in Belgium take managers hostage and is now facing blockades at its two breweries in the country.

We've also had an update from world's second largest wine and spirits producer , Pernod Ricard. Sales are picking up and the Chinese are lapping up Martell stocks, but the US spirits market remains a cause for concern.

Next week could also be eventful. The World Health Organisation is set to meet to discuss its draft alcohol strategy. A current draft includes a lot of proposals on pricing and is likely to make some waves in the sector.

Wishing you a good weekend.

Chris Mercer, deputy editor.

China's economy "overheating"

Thu, 14 Jan 2010 15:29:00 GMT

China's economy is in danger of "overheating", according to a report on global risks published today (14 January).

The report, published annually by the World Economic Forum and a host of top insurance firms, warns that China's economy is more fragile than many believe.

"China's economy is in the process of overheating," Daniel Hoffmann, chief economist at Zurich Financial Services, told a press conference in London to mark the launch of the report.

China may have largely survived the financial crisis and global recession, but has largely done so by domestic credit growth, says the report, which describes the Chinese economy as a "key risk" to global economic stability.

For more on the risk report, click here.