October 20, 2008
just-drinks.com editor's weekly highlights
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In the midst of another whirlwind week on the financial front, just-drinks delivered some learned thoughts on the US drinks market.
Speaking at the US Drinks Conference, held in London, UK, we adopted a cautionary tone, with consumers' wallets looking increasingly tight.
The overall picture is mixed, with several premium sectors in spirits, wine and beer, continuing to report growth.
Diageo's CEO, Paul Walsh, told us recently that he believed the US consumer who bought one bottle of Johnnie Walker a year in the past would continue in this vein no matter how tough things got.
Another firm, Beam Global, has reported a trend towards its value spirits brands, however. One analyst told us that having the right distributor in the US would be key to gaining good shelf space in the growing economic gloom. See the blog for more comments.
The last week has also seen the first wave of a flurry of results from across the drinks industry.
SABMiller said in a trading update that it had achieved a 3% rise in beer volumes during its first half, but shares tumbled 8% a day later, following its cautious approach the the rest of the year and a renewed slide on FTSE 100 stocks.
We caught up with SAB's managing director for Europe, Alan Clark, to talk through the brewer's position and its plans.
It was a rollercoaster week for results in the soft drinks sector. Wariness turned to outright fear as PepsiCo announced it planned to cut 3,300 jobs globally, and fellow US group Jones Soda said it would chop 38% of its workforce.
Away from the financial scene, Carlsberg has announced the departure of UK chief executive Doug Clydesdale. He will be replaced by current South East Europe CEO Isaac Sheps.
Things have continued to hot up on the responsible drinking front in the UK. Industry leaders are attempting to avoid a new mandatory code of practice, which has been laid on the table by ministers keen to reduce alcohol harm.
Until next time...
Olly Wehring, Managing Editor
BALTIKA Breweries is one of the largest beer producers in Europe with production capacity over 50 MHL. A strong leader in the Russian beer market, exports to 50 countries all over the world, 70% of all export shipments of beer from Russia. BALTIKA’S sales abroad volume in H1 2008 run up to 1,5 MHL, an increase of 38%.
SABMiller may have seen beer volumes rise by 3% in the first six months of the year but the impact of rising commodity prices, the global economic downturn and the credit crunch have given the brewer a cautious, if not downbeat, outlook for the second half. However, Chris Mercer writes, the company believes its premium positioning will bolster it during the tough times ahead.
The World Trade Organisation’s (WTO) Doha Development Round is now at a crossroads. After coming to a hair’s breadth of striking a deal at a ministerial summit in July, there is now a serious risk that agreements wrung from these seven years of discussions could now unravel. If trade ministers are prepared to return to Geneva to solve the limited range of issues over which they were unable to reach agreement, a Doha deal could be secured this year. But, this seems unlikely, with the US presidential election looming. In this month's briefing, we assess the prospects of the WTO recovering from this latest setback and consider what is at stake.
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