August 13, 2007
just-drinks.com editor's weekly highlights
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It’s a very British obsession, I know, but the weather really has been at the forefront of the minds of almost all of us over here of late. Indeed, across Western Europe in general, the lousy June and July have even been making headlines.
Here at just-drinks, we’re no exception. As the first half - and second quarter – results come pouring in, the excuses are coming thick and fast when performance hasn’t been as good as expected. And the most popular excuse? You guessed it – the sun hasn’t had his hat on.
Scottish & Newcastle was a class example of this last week, when it warned that the poor weather so far this summer had led to its Western European markets of the UK and France experiencing “significant difficulties in two of our three key summer trading months”.
There is probably further bad news on the horizon for the beer group, as July’s floods have coincided with the arrival of the smoking ban in the UK to further dent growth in the second half.
I remember a few years ago, discussing the effect of the weather on drinks companies with a rather verbose analyst. He dismissed the use of a bit of rain as an excuse – and he was rather persuasive.
“Certainly, people drink more of certain beverages when its hot outside,” he said, “but if you’re operating in markets where it’s not always hot outside, then how can you expect growth year in, year out?”
Not only that, he said, but a balanced portfolio should allow drinks companies to sell different products to consumers whatever the weather. “It’s just not a viable excuse anymore.”
S&N is not the first group to fall foul of the weather this year in Western Europe – look at poor old C&C – and it will not be the last either. But there is little doubt that for drinks groups with serious international aspirations he has a point. Businesses of this size hedge against almost everything else – should we not be looking to ways to mitigate bad weather?
What do you think? I’d welcome your thoughts in our forums section – because he almost convinced me.
Until next time...
Olly Wehring, Managing Editor
Following the recent floods in the UK, bottled water companies provided emergency supplies when mains water services broke down. Their largely unsung actions gave the companies a chance to demonstrate their social responsibility, writes Annette Farr, at a time when the erratic weather patterns have focused public attention on environmental concerns and climate change.
This month's briefing has been written following the success of the first magnificent seven briefing published by just-drinks in July 2006. While health, convenience and indulgence (dubbed the three megatrends) continue to dominate growth strategies within the global drinks industry, a number of emerging trends are also making a significant impact on communications, new product development (NPD) and consumers' purchasing habits. We offer insight and perspective on drinks trends currently influencing manufacturers, retailers and consumers in the global marketplace.
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