The beverage business blog from Olly Wehring
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Wine Evolution - quote, unquote
30 Jan 2006 18:13
Greetings from this year’s Wine Evolution conference, here in Gay Paree.
This is my first time at this event, and I have left the running of the site in the capable hands of news editor, Dean Best.
It’s been a thoroughly absorbing, albeit slightly depressing, first day of Wine Evolution, in this our sixth year as media sponsor. The majority of speakers today have reflected on the harsh economical outlook facing the global wine industry. And yet, we were left on a high note after listening to a couple of opinions for the future that pointed to happier times.
To give you a good feel for what’s been going on, here are some of the more notable quotes of the day.
“I think in the future, wine marketing will be more linked to the moment of consumption, as well as the type of consumer, be they traditional or modern.” - Peter Klosse, Academy for Gastronomy, founder.
“Monopolies create both positive and negative opinions. Our task is to protect public health. We don’t make a profit, so there’s no incentive to encourage consumers to drink more.” – Louise Key-Hedberg, market analyst, Systembolaget.
“If you get your calculators out, at current rates, 12 November will be the day when the US overtakes France as the second biggest exporter of wines to the UK.” - Robert Joseph, journalist and founder of International Wine Challenge.
“There seems to be a paradox in the UK market, between a sophisticated consumer who is driven by low prices. My question is, why should smaller European wine makers bother trying to get into the UK wine market?” – Constantine Stergides, Greek wine journalist.
“In Germany, two out of every three bottles of wine are sold for less than EUR2.” - Werner Engelherd, chief editor Wein + Markt.
“There are 100,000 wines available in Germany, each claim is occupied. There is no need for 100,001.” - Werner Engelherd.
“The industry dilemma is the lack of real consumer insight – we need to make this a common target.” – Marian Kopp, president of Racke International.
“The playing field is being levelled, and time is running out for the dinosaurs of the wine industry. The New World is growing, while the Old World is struggling.” Vic Motto, chairman and CEO of Global Wine Partners.
“Premium wines are taking over the industry. This is a new paradigm for the sector… Higher price wines will become the new competitive battleground, this may change the very nature of competition.” - Vic Motto.
“Europe can recover because of the good example set by the New World, but they have to move fast.” - Thierry Jacquillat, president of Paris-Ile de France Capitale Economique and former general manager of Pernod Ricard.
“Even Coca-Cola is forced to adapt its product – the world consumer does not exist. I am French, and proud to be French, but not to do business with wine growers and co-ops in France.” - Thierry Jacquillat.
More tomorrow, so keep your eyes peeled.
Help me pass my driving test
25 Jan 2006 10:46
While writing up the story (even as editor, I still like to keep my eye in) regarding Martini entering Formula 1 sponsorship yesterday, I was reminded of a conversation I had just before Christmas with the communications vice-president of one of the world’s larger spirits companies.
In passing, I asked him for his opinion on Diageo’s entry into F1 through its deal to back the McLaren team with Johnnie Walker. To say that he was verbose on the matter is putting it mildly. “It’s absolutely ridiculous,” he spluttered. “How can an alcoholic drinks company possibly promote responsible drinking in such an irresponsible way?”
As the voice of the drinks industry, we’re naturally on the side of the beverage companies. But I find it really quite difficult to take sides on this one, and I need your help. It strikes me as peculiar to put the name of a spirit on the side of a very fast car, and then look at using the link-up to promote anti-drink driving campaigns. And yet, early last year, Diageo, when unveiling its Johnnie Walker sponsorship, asked an equally valid question: Who has the more powerful platform to educate consumers about the dangers of drink driving: the drinks companies themselves allied with high profile F1 drivers or faceless government authorities?
Add to the debate the fact that many soft drinks companies are being hit by bans from college campuses, for example, only because consumers who don’t get out much and watch too much TV (and don’t start me on this one) might get a little fat, and my confusion becomes overwhelming. Producers of alcoholic drinks, meanwhile, are freely able to advertise their wares in a sport which, if the product and the pastime are combined, could end up killing someone.
Believe me, I have actually lay awake at night trying to get my head round this. Could someone please talk me through it? Is this some sort of outside-of-the-box thinking that my little brain cannot comprehend?
Answers on a postcard, please?
Kaiser is dead - long live Kaiser
17 Jan 2006 22:49
The news this week that Molson Coors has finally exorcised its Brazilian demon will come as sharp relief to the North American company’s shareholders. Executives at the brewer have hardly had it their own way since the ink dried on the merger between Molson and Coors early last year. The struggling Kaiser business, though not alone among the brewer’s woes, has been one of its biggest headaches.
Molson bought Kaiser in 2002 for US$765m and saw the Brazilian brewer’s performance deteriorate at quite a pace. Distribution and marketing problems contributed to Kaiser slipping from Brazil’s number two brewer, with about 15% of the local beer market, to third place and only 8.5% market share.
And with Mexican drinks group FEMSA taking 68% of Kaiser for only US$68m, as well as assuming US$60m of debt, it would look like Molson’s South American gamble has been an unmitigated failure.
Molson Coors now plans to “focus on our biggest markets and to continue to deliver the cost synergies and other benefits related to the Molson Coors merger,” according to president and CEO Leo Kiely. Considering the company also said that it expects to report lower group sales volume and earnings per share, excluding items, for the fourth quarter, that’s exactly what the company needs to do, unencumbered by the Kaiser millstone.
So what of Kaiser? Is the brewer a poisoned chalice? Heineken, after all, appears to have shied away from the chance to up its stake in the company. Given that FEMSA is the largest distributor of Kaiser products in Brazil, however, one could conclude that Kaiser has found the best home it could hope for.
She's drinking WHAT?!
12 Jan 2006 16:50
Stay off the Stella and stick with Stoli – that seems to be the message from style gurus in the UK.
A new survey from liqueur brand De Kuyper has found that, when on a date, two-thirds of the UK population will make a judgement about their companion for the evening based on what they choose at the bar.
And that’s not all; a majority of these people (62%) are also prepared to raise a glass of something they wouldn’t normally drink simply to impress. Cocktails (38%) and a glass of fine wine (39%) come out top as the drinks to be seen with; it’s probably safe to assume that a pint of bitter or a Babycham didn’t figure too highly.
So, you’re on a date and what your companion drinks is just as an important factor in whether things progress as physical attraction or - God forbid - something as inconsequential as someone’s personality.
Shallow and small minded? I’d say so. But maybe I’m wrong because, according to (it gets worse) the country’s relationship psychologists, you are what you drink.
“It’s not only your clothes or hairstyle that give out clues about what kind of person you are,” says relationship shrink Mo Shapiro. “Your choice of drink is also a comment about your personality.” Thanks Mo. I like Guinness, so what does that make me?
And, tragically, it seems that some are using clothes and hairstyle in conjunction with the drink they choose. The survey goes on to say that more people in London than anywhere else in the UK match the cocktail they drink to an outfit they wear.
I ask you.
The Kid is all right
12 Jan 2006 16:27
A now-legendary quote in soccer circles here in the UK, came when a pundit insisted: “You don’t win anything with kids.” Suffice to say, the young team he dismissed went on to take silverware left, right and centre in the following months. So, maybe we should give youngsters a little more credit, perhaps? That’s what they’re doing in the US, it seems.
A fifth-grade student in Missouri has suggested a potential solution for the terminal problem of drink-driving, and one senator is so impressed with the idea that he has proposed it as a law change for the whole state.
Sen. Bill Alter has proposed that grocery and convenience stores would risk losing their liquor licenses if they sold beer at a temperature colder than 60 degrees. “The only reason why beer would need to be cold is so that it can be consumed right away,” he said last week.
The student came up with the idea when participating in a programme to teach elementary students about state government.
“You never know what’s on the mind of young kids - some of them are pretty smart,” Alter said.
Warm cans of beer as a cure to drink-driving? I’d just plump for an RTD, then. You’d even spill less.
Colouring in the grey
10 Jan 2006 17:12
It’s been a day of colourful characters hogging the headlines today. And if the drinks industry has plenty of one thing, then it’s colourful characters.
Karan Bilimoria, the Indian who made good in the UK by personally hawking his Cobra beer around the country’s Indian restaurants in the 1990s, was first up, as details emerged of his company’s flotation later this year. The brewer is eyeing a market capitalisation of US$1bn within the next ten years. Ambitious? Yes. But few would doubt the 44-year-old, who has had so much success in a UK beer market considered stagnant for quite some time now. Not only is he chasing success in the UK, but recent speculation surrounding Cobra has all been about upping its presence in Bilimoria’s home market of India.
Next, we welcome back former Allied Domecq CEO Philip Bowman into the drinks fold. Bowman’s business future has been one of the main talking points amongst spirits industry executives after the dust settled on the Allied sale to Pernod Ricard and Fortune Brands. Would he take the money he earned from the deal and head back to Australia, or would a man of his undoubted talents be tempted back into the fold? At 53 years old, I certainly wouldn’t have blamed him for taking early retirement – would you? But news today that he has joined Scottish & Newcastle as a non-executive director might just suggest that the drinks industry is far too enticing a gig to get out of.
That’s what I’m finding out, anyway.
Confused? They will be
04 Jan 2006 14:22
And so, after the comparative peace of Christmas week, 2006 is here and a crammed inbox suggests we’re going to be busy for another 12 months here at just-drinks. A prosperous and peaceful New Year to you all, although I reckon we may be hard-pushed to have the latter in the drinks industry.
Already, only four days in, one story has generated more than its fair share of traffic on the site. A survey conducted by Viña Ventisquero’s Chilean wine brand Yali in late December concluded that the majority of wine drinkers in the UK feel misled by the labels on wine bottles, as we reported yesterday (3 January). The survey showed that almost half of the UK’s wine drinkers prefer wine with a clear, modern label and are often more likely to base their choice of wine on the look of the bottle.
At a wine tasting in Bordeaux in October last year and again while on holiday in St Emilion in the summer, I recall being well and truly bamboozled by the amount of wares on offer. It’s going to take a fair while for me to comprehend what’s good or not, and what I like or not – and I’m supposed to know what I’m on about when it comes to wine! Pity poor Joe Shmoe in the street, then, for it’s the money in his pocket that the wine companies are all chasing.
While I concede that the survey wasn’t the most scientific I’ve seen – only 1,500 wine drinkers were surveyed in the busy week before Christmas – the findings confirm what Constellation Brands found when it published its research into the US wine market late last year. The creation of a consumer category the company termed as ‘Overwhelmed’ suggests that this is a global issue, and one that needs to be countered by wine companies at every turn. Considering also the problems on the UK high street last month, with Unwins going under, it looks like the onus is on the producers to change consumers’ perceptions.
It looks like 2006 is going to be a rollercoaster year for one sector of our industry, at least.
Looks like we made it
21 Dec 2005 13:14
Well, we’re almost there. The end of another frenetic year for the global drinks industry is just around the corner and, while some of you are racing to get those last, vital orders out, we here at just-drinks can finally ease the foot off the pedal as we look forward to a well-earned respite.
And what a year it’s been. From Pernod Ricard’s purchase of Allied Domecq in the wine and spirits sectors to Anheuser-Busch’s and SABMiller’s ongoing skirmishes in the US beer industry, via the sale of Cadbury Schweppes’ European beverages division on the soft drinks front, I think we can all safely say that the headlines have come thick and fast in 2005. And I should know - I wrote most of them.
In this, my final blog before Christmas (we close for the week between Christmas and New Year, and will be back refreshed on Tuesday 3 January), I want to thank you all for your continued support. We have been deluged on an almost daily basis by tip-offs and story ideas from freelancers, industry insiders, PR companies and internal marketing departments the world over - if your lot aren’t hitting us yet, then give them a nudge - and just-drinks goes from strength to strength as a result.
So, whether you’re already in wind-down mode, or are expecting to be chained to your desk until midnight on 24 December, may I wish you all a Merry Christmas and a Happy New Year. I get the feeling that 2006 might just top 2005, and I for one can’t wait.
Is Constellation REALLY taking no for an answer?
13 Dec 2005 11:15
Is this how it ends, then – not with a bang but with a whimper?
After almost three months in the breach, Constellation Brands finally admitted defeat in its attempts to buy Canada-based Vincor International on Friday (9 December). The announcement was accompanied by a statement in which Constellation’s notoriously bullish CEO, Richard Sands, said: “We will move on to other priorities and we will continue to build upon our outstanding track record of delivering growth and value to our shareholders.”
This from a man who, one month earlier, accused Vincor of “changing the rules (for Constellation). They will not give us access to the information unless we give them a firm offer at a price that we don't know what it is.”
Although the official line is that Constellation has walked away from the C$33-per-share bid, as well as the sweeter C$35 (US$30.45) offer, this may not be the end of things, with rumours abounding that the US wine giant hasn’t entirely lost interest in Vincor. Considering the company’s track record of acquisitions in recent times, taking no for an answer can’t be sitting well on Sands’ shoulders.
And with Vincor refusing to open its data room to Constellation unless it made an offer “not a million miles north of C$35,” as a spokesperson for Vincor told just-drinks, could it be more of a case of when and not if Constellation is prepared to make one final push?
The company seems adamant, however, that this is the end of the story. “Life goes on,” a spokesperson for Constellation said yesterday. “We’ve got a business to run.” We here at just-drinks will, naturally keep you posted if that doesn’t remain the case.
Everyone's a winner, with just-drinks
07 Dec 2005 17:40
As we’ve been crowing about often enough these past few weeks, the times here at just-drinks, they are a-changing. And the recent launch of our new, personal research manager is just the beginning.
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On top of all this, any research you buy before the end of March will earn you a free copy of our 2006 drinks trends briefing, due to be published next month. The 5,000-word report alone is worth US$320.
So, check out the new service and see what just-drinks can do for you, above and beyond what we do already, you lucky folk.
To try this new service email firstname.lastname@example.org , or call Allyson directly on (UK) +44 (0)1527 573 609.