Alongside our daily news coverage, features and interviews, the Just Drinks news team sifts through the week’s most intriguing data sets to bring you a roundup of the week in numbers.
This week, we took a look at the latest sales data in the US spirits market, saw Brown-Forman again cut its sales forecast, delved into Becle‘s results as the Tequila maker faces pressure from shareholders and highlighted wine-export reports in Spain and Germany.
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Concerns for US spirits category
US spirits sales stalled in January, with “major categories” hit by weakening demand for Scotch, rum and gin, data shows.
Volume sales of Scotch, rum and gin fell 8.8%, 6.3% and 6.9% respectively according to figures released this week by the National Alcohol Beverage Control Association (NABCA). Value sales fell 7.9%, 3.6% and 3.9%.
Robert Moskow, an analyst at TD Cowen, said the data suggested a wider deceleration trend for the year ahead.
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“The data confirms our view that the industry will face slower growth in 2024 due to reduced incidence post-pandemic and pantry de-loading,” he said.
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By GlobalDataUS brandy and Cognac sales also declined in January, with a negative category price mix led by Cognac, NABCA said. The category declined 4.8% in volume terms while Cognac alone declined 7.5%. In value terms, the category declined 9.1% while Cognac fell 11.5%.
Sales of cocktails and Tequila in US control states grew in January, meanwhile, both in volume and value. Ready-to-drink cocktails shot up 18% in volume across the 12-month period and 20.8% in value. Sales were led by canned RTDs, NABCA said.
Brown-Forman cuts sales forecast – again
For the second time in three months, Brown-Forman has had to lower its forecast for its annual organic sales.
On Wednesday, the US spirits giant cut its prediction for how much the Woodford Reserve owner thinks its organic net sales will grow in its 2024 fiscal year.
Citing a “challenging operating environment”, Brown-Forman expects its organic net sales to be flat in the fiscal year to the end of April.
In December, the Woodford Reserve owner cut its forecast for organic net sales growth from 5-7% to 3-5%.
Brown-Forman is now also forecasting its organic operating income will, at best, be up 2% year on year, or, at worst, flat.
The company’s December forecast was for growth of 4-6%, itself down from an earlier 6-8% prediction.
“Looking ahead, and with the company hosting an investor day later this month, we think the key question will be to what degree have industry inventories – in the US, in particular – been cleaned up such that growth can get back to a more normal trajectory in fiscal year 2025,” Barclays analyst Lauren Lieberman said.
Pressure on Tequila maker Becle despite Q4 uptick
Becle shareholder Marathon Partners Equity Management has put pressure on the Tequila producer to increase shareholder value following “poor” results.
Becle, which went public on the Mexico stock exchange in 2017, saw net income and earnings per share (EPS) increase in Q4 2023 following at least four consecutive decreases. Net sales and Operating both decreased in the quarter, though less than Q3.
But Marathon Partners was not placated by positive EPS movement in the fourth quarter.
In a letter to the board, it suggested the Jose Cuervo brand owner consider a sale or merger and re-list on a “major” stock exchange.
“Becle shares have performed quite poorly since the February 2017 IPO and, at most times, have been significantly undervalued by the marketplace relative to global spirits peers,” Marathon managing member Mario Cibelli said.
“While we are encouraged by Becle’s fourth-quarter results, company shares remain well below prior highs. Had Becle announced a re-listing along with the recent results, we are confident that the market’s reaction would have been even more favorable.”
In 2023, Becle’s EPS fell to 1.32 pesos (US$0.08) from 1.64 pesos in 2022. In the fourth quarter, however, EPS rose to 0.55 pesos compared to 0.39 pesos in Q4 2022.
Spanish wine exports fall in 2023
Belgium and the UK were the only countries out of Spain’s largest export markets to import more packaged wine in 2023 than 2022.
Belgium increased imports by 5.2% to €47.36m, increasing volume 23.4% to 15.42m litres according to the Observatorio Español del Mercado del Vino (OEMV).
The UK grew more slowly, importing 0.5% more “packaged” wine (82.98m litres) worth €249.46m (an increase of 3.3%).
Canada saw volumes decrease 0.7% to 95.32m litres but exports grew 0.4% in value to 18.75m litres, the OEMV said.
Overall, the country exported €2.91bn ($3.14bn) of wine in 2023, a 4.1% drop compared to 2022. In volume terms, Spain exported 225m nine-litre cases, a 3.2% decrease on 2022.
Bottled DOP wines (those with a protected designation of origin) led the declines, falling by €73.7m (-5.6%) and 3.71m nine-litre cases (-11.8%).
