just On Call: No let-up in US spirits resurgence - Beam Global
Fortune Brands' Beam Global Spirits & Wine upbeat on US spirits market
Beam Global's CEO, Matt Shattock, told analysts today (4 August) that the business is "right where we want to be" ahead of Fortune's plan to spin-off its remaining home and security division and rebrand itself as solely Beam Inc.
Speaking on what the company said is likely to be Fortune Brands' last results call, Shattock reiterated his confidence in the US spirits market. Concerns are growing over the US economy, with former US treasury secretary Larry Summers warning this week that the country has a one in three chance of succumbing to a fresh recession.
Despite the fears, Shattock said that Beam has seen no signs that a tentative recovery in US spirits sales is under threat.
He said Beam is continuing to see "the return of premiumisation" and that the on-trade is "coming back steadily and surely". He added: "We've seen no indication that those trends have been interrupted."
Earlier this year, the US Distilled Spirits Council (DISCUS) said that, for 2010, overall spirits sales in the country rose by 2% in volume and 2.3% in value. The 0.3% difference was hailed by industry as a sign that more consumers returned to premium spirits. In 2009, spirits sales were flat in value and up 1% in volume.
The market momentum has continued in 2011, according to Beam. Its second-quarter net sales reached a record $702.7m, up by 11%, it reported today. Meanwhile, sales for the six months to the end of June rose by 14% on the same period of 2010, to $1.37bn, with sales in North America up by high single digits.
That said, the strength of recovery varies from sector to sector. Beam said that the Bourbon sector in the US is "growing faster than vodka".
Earlier today, Gruppo Campari's CEO, Bob Kunze-Concewitz, told just-drinks that vodka market growth is still "volume-led", while the Bourbon category, in which Campari owns Wild Turkey, is growing more strongly by value. Speaking on Campari's own half-year results call, Kunze-Concewitz agreed with Shattock that the US spirits market has so far showed little sign of being dented by the fresh economic concerns.
Campari's own net sales in the US slipped by 1.6% for the half-year, although they rose by 3% if a detrimental currency effect between the US dollar and the euro is excluded.
We have yet to see the official figures on the US spirits market in 2011, but the signs suggest that renewed momentum in premium has been maintained....
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