December 3, 2007
just-drinks.com editor's weekly highlights
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While the majority of you out there in the drinks world appear to have your heads down, making the moo-lah as Christmas approaches - Happy First in advent for yesterday, incidentally - a pattern for 2008 already appears to be taking shape.
Although Anheuser-Busch said last week that its full-year earnings growth remains on track, commodity cost pressures have clearly made their presence felt at the brewer this year.
This was followed later in the week by Asahi Breweries joining other Japanese brewers in unveiling price rises for next year. Budejovicky Budvar, meanwhile, followed suit, saying it would up its prices by between 4% and 6% next month.
While this pattern suggests that it's only the brewers who are having it tough, I think many of you are aware that these pressures are appearing right across the drinks spectrum. Raw materials, packaging, transportation - the costs of all of these are heading north, and it's the consumer who, finally, is getting hit.
How that consumer is going to react to these price hikes will be the sternest test of the much-lauded idea of brand loyalty. Especially here in the UK, there will always be cheap (and cheerful) drinks available in the off-trade. While we’ve had the chance to get comfortable with several global brands over here, we’ve also got used to low prices.
And so, the battleground for next year appears to be set. And all this, before we even start to look at ‘going green’, which could prove more expensive still.
Who’d be a consumer?
Speaking of brands, regular columnist Patience Gould cast her eye over the importance of a strong brand name, in our features section last week. We also looked as Constellation’s acquisition of Fortune Brand’s wine portfolio, and suggested that both sides have come out of the deal as winners.
Until next time...
Olly Wehring, Managing Editor
Constellation's US$885m purchase of Fortune Brands' wine portfolio further adds to the acquisitive US company's impressive line-up. Chris Losh believes the deal makes perfect sense for Constellation, and for Fortune Brands could be part of the company's preparation to enter the auction for Absolut vodka.
In this month's briefing we examine the development of online grocery shopping. We look specifically at the growing online wine market, and examine both the activities of major grocery chains and specialist drinks retailers in the online sector. As would be expected from a sector expanding from a small base, the online food and beverage market is showing strong year-on-year growth. We provide an overview of the key facilitators for this growth, and include chapters on innovation and development, the marketing of wine online and the importance of an online presence. Market share by retailer for the online grocery sector is also provided along with company profiles for Tesco, Sainsbury's, Ocado/Waitrose, Asda, Majestic Wine, Oddbins/Nicolas and Wine Cellar.
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