The beverage business blog from Olly Wehring
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Beer quiz - think you know your industry?
29 Nov 2006 13:20
Okay, all you smart alecs out there - you think you know your beer?
Instead of a tasting, though, I’ve got a geeky industry question for you.
I want you to give me your guesses for which European nation has the most breweries per capita.
Here’s a clue - or could it be a red herring - a top eight chart of Euro countries was compiled by the Danish tourism centre in Germany.
Answers will be here, same time tomorrow. The winner gets… heightened kudos within the drinks industry.
And that's - hic - how I met your mother
27 Nov 2006 15:06
If you log onto just-drinks with any regularity, you get to see an awful lot of my awful mugshot. How, you may wonder, did a face like that ever have any success with the ladies. Well, scientists - obviously - may have the answer, according to an article I stumbled on the BBC.
The key lies in what is commonly known as beer goggles. For those who have never seen a gremlin mysteriously transform into the beauty or Prince Charming of your dreams as a night out has progressed, this is the phenomenon that seems to transform ugly people into stunners after a few drinks.
The University of Manchester claims to have worked out a formula to determine the strength of your beer goggles on any one night - and alcohol is only one of the factors to take into account.
The equation, which can be seen in full here, also factors in the level of light in the pub or club, the drinker’s own eyesight and the room’s smokiness. The distance between the two people also plays a part.
So, for your best chance of pulling, particularly if you are aesthetically-challenged: frequent dark, smoky rooms where plenty of drunk people hang out, keep your distance from everyone and only make eyes at other people who appear to be squinting.
At last - a foolproof plan.
Rémy Cointreau - an invitation to join the speculation
27 Nov 2006 14:04
Whilst a fair share of you were tucking into your turkey and pumpkin pie, Rémy Cointreau decided last week that Thanksgiving was the perfect time to drop its Maxxium bombshell.
Having been part of the distribution joint venture - along with The Edrington Group, Beam Global Spirits & Wine and V&S Group - since it was formed in 1999, Rémy has decided that it would be better off going it alone. The popular consensus is that the move is part of Rémy’s attempted seduction of a suitor to swoop in and carry the French company off into the sunset.
If you take a look here, you’ll see what one analyst had to say about the potential runners and riders. Of course, the drinks giants will also take a sniff around - as Pernod Ricard’s CEO, Patrick Ricard, told just-drinks earlier this year: “Everything that makes sense will be looked at - big or small, brown or white, wine or spirits. We will look at everything.” Diageo’s chief executive, Paul Walsh, would probably say exactly the same thing.
Pernod’s bases on Cognac and Champagne are pretty well covered, granted, but what of Diageo? The company has Hennessey Cognac in its portfolio, but only thanks to its 34% stake in Moët Hennessy. Diageo would not be drawn on its intentions in this area, but its Moët Hennessy relationship is very important to Diageo, particularly in China, where the French company plays a major part on the distribution front.
That said, would Moët Hennessy be interested in Rémy Cointreau? Sounds unlikely, I know. But then, how many of us can safely say that the only certainty in the drinks industry is certainty itself?
Rémy Cointreau will leave Maxxium in March 2009 - that’s plenty of time for the likes of just-drinks to speculate.
Wine industry relying on China? Oh dear...
24 Nov 2006 16:28
I have to say, even I was momentarily lost for words when I saw the recent estimates for the total global 2006 wine harvest. The Paris-based International Organisation of Wine and Vine (OIV) estimates the haul to reach 280m hectolitres this year. At the same time, the consumption of this year’s harvest is projected to reach around 238m hectolitres, leaving a gap of 42m hectolitres.
Isn’t that surplus about the same as the entire annual output from Spain?
The problem the industry faces is that, whilst the traditional wine markets of continental Europe continue to decline, it can no longer rely on the likes of the UK to act as a positive counterbalance. As such, the gap between production and consumption only looks set to grow.
Some optimistic producers now point to developing markets such as China as potential growth regions to take up slack. But as one long-time wine industry contact of mine told me this week: “When you start relying on the Far-East for growth you know you are really in the sh!t.”
Diageo and McLaren - a match made in Walsh's heaven
23 Nov 2006 13:19
Woking, a satellite town just outside London, is not normally a place one would associate with cutting edge 21st century technology.
However, last night (22 November), Diageo gave the industry an update on its much-debated link with Formula One, during an event held at the über-modern McLaren Technology Centre.
Last year, the UK drinks giant signed a sponsorship deal with Team McLaren Mercedes for its flagship Scotch whisky brand Johnnie Walker. An association between a beverage alcohol brand and the sport is nothing new, but what has caused such discussion in the drinks industry is Diageo’s use of the sponsorship to promote a responsible drinking message around the world.
Just-drinks has discussed at great length the merits - or otherwise - of Diageo using Formula One to promote that message, but last night there was no doubting the company’s commitment to the project.
And last night, there was also no doubting that Diageo chief executive Paul Walsh was enjoying himself among the almost space-age glass and steel of McLaren’s HQ, designed by Lord Foster. McLaren Formula One cars, past and present, were parked throughout the building, which must have brought a smile to the face of Walsh, a confirmed Formula One fan.
After giving a speech on Diageo’s partnership with McLaren and its commitment to responsible drinking, Walsh spent most of the rest of the evening rapt in conversation with Ron Dennis, chairman and CEO of McLaren, no doubt talking about downforce, tyre changes and gossip from the pit lane.
If you need an enthusiastic work experience lad to help out around the place, Mr Dennis, one candidate certainly springs to mind.
Calais looking to trade white vans for wine connoisseurs
22 Nov 2006 11:17
With border trade between Dover and Calais continuing its inexorable slide, some drinks retailers in the French seaside town are going for the ‘class’ factor.
But after a two-day press visit there last week, I stand to question whether the average UK punter is as classy as they would like. One of the wine merchants I visited, Calais Vins, reports to be an exception to the Calais market by posting year-on-year sales gains.
The store has gone for a range of good quality international wines, beers and spirits, ahead of quantity. Another tactic is to educate incoming customers, myself included, by setting up an in-house wine bar, or ‘coin de dégustation’.
Such an approach is a far cry from singlet-wearing Brits loading 99p Hock and 20p beer into white vans in the past, and has worked better than the path taken by the likes of Tesco, Sainsbury’s and Auchan - who seem to be languishing somewhere in between.
However, this model relies somewhat on the wine consumer veering towards expert level. And, while a segment of the UK market is certainly heading in this direction, the question of sustainability remains.
Surely it is the maturation of the UK marketplace that will dictate when the day-trippers are ready to swap Calais ‘vans’ for Calais ‘Vins’?
Bowmore looks abroad amid UK thirst for discounts
21 Nov 2006 18:18
UK supermarkets were the subject of yet more criticism from the drinks industry late last week - and this time the attack came from the picturesque Scottish island of Islay.
Morrison Bowmore Distillers, part of Japanese drinks group Suntory, has embarked on a root-and-branch revamp of flagship single malt Bowmore in an attempt to boost awareness of the whisky among consumers.
The company is spending GBP20m (US$37.9m) on promoting what it sees as the “premium” credentials of Bowmore and has redesigned its packaging, created new advertising and reduced the brand’s range to focus on its core expressions.
One would think that a perfect showcase for the new-look Bowmore would be in UK supermarkets, the most important domestic shop window for many a drinks product – certainly for a company that has aspirations to build a brand.
But not for Morrison Bowmore. The company seems to be placing more importance in growing the presence of Bowmore single malt overseas. According to chief executive Mike Keiller, the UK market is not the most lucrative place to develop and grow a single malt, to say the least. And that, Keiller argues, is due to the power of UK supermarkets and their thirst for price discounts.
“The supermarkets are demanding price discounts, a cut-price product and have a policy of pile it high, sell it cheap. We’re short of stocks, so we took a decision that it wasn’t worth pushing volumes in the UK market,” Keiller says.
“The UK market is not a living example of how single malts can develop. You can find an 15-year-old whisky below GBP20 - I find that shocking; I cannot understand how a responsible owner can sell an 15-year-old below GBP20.”
Morrison Bowmore marketing director David Wilson insists the company believes the growth of Bowmore will come on a global basis and cites the US, Asia and duty-free as key to that development.
The strength of parent company Suntory in Asia should stand Morrison Bowmore in good stead, especially now that it is armed with a product in more modern, confident, premium-looking packaging.
Nevertheless, many, if not all, whisky producers are eyeing the buoyant demand for single malts in markets like China and South Korea with interest and are taking steps to bolster their presence accordingly. Turning its back in the UK, despite the issues with pricing, represents quite a gamble for the Islay distiller.
It ain't where you're from... according to InBev
20 Nov 2006 11:08
When Interbrew and AmBev hooked up in 2004, it looked to many like Interbrew was conducting a takeover of the South American company. I don’t think I’m alone in saying that I half-expected a flow of executives to move across the Atlantic in a westward direction. While eyebrows were raised, however, at the end of last year when AmBev’s CEO Carlos Brito headed to Belgium to take the new company’s top job, the trickle of criticism levelled at the company has grown steadily in the last 11 months.
Local papers reported last week that another Belgian executive is to leave the company. Technical director Andre Weckx has resigned from InBev after 25 years and will be replaced by AmBev veteran Claudio Braz Ferro.
When we spoke to InBev, they were quick to defend their position. “It is InBev’s desire to foster a truly global organisation and bring together experience from around the world,” a spokesperson said. “When choosing our leadership, we aim to select the right person for the job, regardless of nationality. We put in place the best team possible to execute our strategy and to achieve our objectives.”
This comes as a timely reminder to us all that the world is getting smaller, and where you’re from is nowhere near as important as where you’re at. Of course, our industry stirs pride and passion in even the hardest of hearts at times. But the irrationality of nationalism has no place in the 21st century. The very strange situation that occurred last year when the French Prime Minister voiced his opinion on rumours that Pepsi might buy Danone serves as a good example of this.
UK wine market - value v education
17 Nov 2006 16:44
Constellation Europe has followed its US cousin in commissioning some pretty interesting consumer research. The company came to town (London-town) today (17 November) to unveil the results of Wine Nation, a look at UK wine consumers and why they buy the wine they do.
The main conclusion of the research is that an increase in consumer involvement in and knowledge of the category will translate directly into an increase in value at the point of sale. The majority of UK drinkers are still confused about the wine market, the survey said, and they won’t feel comfortable trading up until they know what they’re on about.
This is very much a chicken and egg scenario, I fear. While value continues to play as big a part as it does in the mindset of us Brits, the need to educate is high, but still comes a very poor second to price - especially in as cut-throat a market as the UK.
It is obvious, I know, but the lower the perceived risk is when making a purchase, the more likely the customer is to spend more.
The crux of the matter, however, is that the importance played by value runs right through the wine consumer. De-emphasising that, while leading them through the wine maze will, one day, make someone very, very rich indeed.
Coke or Pepsi - which drink makes you 'happiest'?
16 Nov 2006 13:26
Pepsi consumers are happier when they take a drink of their favourite beverage than Coke consumers. At least those are the findings of The University of Michigan’s annual consumer satisfaction index, which claimed that people liked Pepsi better than they did last year, but customers’ taste for Coke went a little flat.
According to the survey, satisfaction fell two points among Coke drinkers over the last year to 82 points on a 100-point scale, while Pepsi and Cadbury Schweppes shared the highest index rating with 86.
Now, typically, I suspect, for a journalist, I have a huge distrust and dislike for marketing-speak, and sit smugly and cynically through any presentation that veers close to explaining to me the deep emotional bond between a drink and the person drinking it.
So you’ll have to forgive me for wondering what on earth this survey is all about? Are Pepsi consumers really happier people than Coke drinkers? And if so, how the hell did some market researcher with a clipboard ascertain this? All this is made even more baffling by the fact that these drinks don’t actually change in flavour year to year.
The explanation given for the apparent victory for Pepsi by Professor Claes Fornell, the researcher in charge of the study, did make sense - a little annoyingly. He said that anecdotal evidence gathered by his researchers suggested an increase in spending on marketing and product innovation, and a lesser reliance on price promotions, might have helped Pepsi bump up its satisfaction rating. He said that, when consumers have more choice, they are more likely to be happy. This tallies with what we have seen from the two giants over the last couple of years.
But you can’t help but sympathise with the Coke spokesman yesterday when he told just-drinks: “People in the US vote for their favourite soft drinks when they buy them every day, and we lead in the top three categories with Coke, Diet Coke and Fanta.”