Industry Issues

June 1, 2004
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Pernod Ricard USA, White Plains, N.Y., has appointed Theodore Roman vice president of sales, replacing Charles Smith, who has become senior vice president of trade relations… Shaw Ross International Importers, Miramar, Fla., has named Bruce Hunter to the newly created position of senior vice president/director of wines… James Thompson has been named president, global and North American marketing at Diageo. Norma Suter Drew has been selected as senior vice president of marketing for Diageo North America… So So Def Recordings Chief Executive Officer Jermaine Dupri has become a partner and owner of 3 Vodka Distilling Co., Chicago… Izze Beverage Co., Boulder, Colo., has named Lance Gentry director of marketing and Madeleine Berenson director of corporate communications… Cory Stauder has become vice president of sales for G.K. Skaggs Importers, Irvine, Calif… Constellation Wines, Canandaigua, N.Y., has selected Ken Shyvers to fill the newly created position of president and chief winemaker for Constellation
Wines U.S…
Interbrew, Femsa Break Ties
Interbrew and Femsa have agreed to demerge their U.S. and Mexican shareholdings and reassign distribution rights for their products.
According to the agreement, Labatt Brewing Co. will sell to Femsa its 30 percent interest in Femsa Cerveza SA de CV (CCM), a subsidiary of Femsa, for $1.2 billion. U.S. distribution rights for CCM brands will be assigned to Wisdom Imports Sales Co. LLC, a wholly owned subsidiary of CCM. Upon completion of the transactions, Interbrew will own 100 percent of Labatt USA and Femsa will own 100 percent of CCM.
Labatt USA will continue to distribute the CCM brands in the United States for four months, and Labatt USA and Beck’s North America are expected to be merged into a single
organization.
In addition, Femsa agreed to withdraw the lawsuit filed in March, which sought a preliminary injunction on aspects of Interbrew’s merger with AmBev.
“We are pleased with this outcome. We have always maintained that a negotiated resolution was in the best interests of both parties. Interbrew is now free to build a single, focused U.S. company with a unified distribution system. We will be able to deliver premium brands to the United States and are now well positioned for future strategic growth in this key market,” said Interbrew Chief Executive Officer John Brock in a statement.
The transactions are expected to be completed in the third quarter of 2004.
Coca-Cola’s Heyer resigns
Steven Heyer, president and chief operating officer at The Coca-Cola Co., announced he will resign from his post in a move that was widely anticipated after he was passed over for the company’s top job in favor of incoming Chief Executive Officer Neville Isdell.
Heyer plans to stay on for an orderly transition as Isdell succeeds outgoing Chairman and Chief Executive Officer Doug Daft, but Isdell told Coca-Cola employees, "Steve and I agreed that he could best realize his aspirations outside of the company, where he plans to take advantage of the limitless opportunities for a talented executive of his caliber."
Isdell said Heyer’s accomplishments at the company included framing strategic priorities, focusing on marketing platforms, brands and innovation, and advancing bottler relationships.
Pasco sells frozen business
Pasco Beverage Co., Dade City, Fla., plans to sell its frozen concentrate business to Louis Dreyfus Citrus Inc. The sale includes equipment, which will be moved to Dreyfus’ Winter Garden, Fla., facility in December.
“The decision to sell was difficult,” said Pasco Chief Executive Officer Gary Viljoen. “The frozen retail market is declining at greater than 15 percent annually and there is significant excess manufacturing capacity to support the market. Candidly, our Dade City operation could meet the total manufacturing demand of both the branded and private label segments of this market.
“We would have preferred to have our business merged or acquired with other industry participants in order to keep our Dade City facility operating, but our potential partners were highly skeptical that Dade City could be cost-effective in the long run as the market continued its decline.”
Louis Dreyfus Citrus is the third-largest orange juice producer in the world. The company owns and operates two fruit processing plants in Florida and two fruit processing plants in Brazil. Its Winter Garden operations are undergoing expansion and the company has indicated a need to double its production workforce in conjunction with the expansion.
Pasco plans to transition its remaining business to its plants in Chicago and Fontana, Calif.
Allied Domecq taps two for distribution
Allied Domecq Spirits & Wine North America, Westport, Conn., announced First Choice Supplier agreements with Southern Wine & Spirits of America and Judge & Dolph for distribution in South Carolina and Illinois, respectively. Allied Domecq has been evaluating its network with strategic distributors on a market-by-market basis, establishing First Choice agreements with new performance-based rewards.
New luxury wine group formed
Constellation Brands; Domaines Barons de Rothschild, which owns 46 percent of the Chalone Wine Group; and the Huneeus Family have proposed a new joint venture for luxury wines. The new company would include the assets of the Chalone Wine Group; the Huneeus’ Quintessa winery, vineyard and brands; and Constellation’s Franciscan Estates Oakville Vineyard. In addition, Domaines Barons de Rothschild would develop its first wine estate in Napa Valley.
“We are changing the way business has traditionally been done in the luxury segment, from primarily an individual company basis to a collective partnership of some of the most respected members in the industry,” said Richard Sands, chairman and chief executive officer at Constellation Brands. “We are creating a new strategic platform for increasing our participation in the luxury wine business.”
“The strength of the proposed joint venture will come from the unique collection of top-quality wine acreage it will own in the greatest North American appellations and from its strong brands,” added Baron Eric de Rothschild, managing director of Domain Barons de Rothschild.
In other Constellation news, the company announced it will open a new research and development center in Canandaigua, N.Y. The lab will be affiliated with the company’s main Mission Bell R&D center in Madera, Calif., and will include a tasting room, dry and wet labs and a temperature-controlled storeroom. It will be run by Marilyn Konopka, product development manager.
GO FIGURE
1/5
Amount of the world’s coffee that Americans drink, according to Packaged Facts. U.S. consumers are the largest consumers of coffee in the world.
10
Percent increase in sales of beer in Norway during the first four months of 2004, according to the Norwegian Brewers and Soft Drinks Producers.
13.2
Percent climb Miller Lite experienced in supermarket case sales during the 26-week period ended May 8, according to reports in the Chicago Sun-Times.
30
Percent increase in annual sales of frozen blended coffee beverages in North America, according to International Dairy Queen.
49.2
Gallon average of carbonated drinks consumed per capita in the United States in 2000, up from the 10.8-
gallon average consumed in 1946, according to Reuters.
17,000
Number of coffeehouses in the United States, according to Mintel International.
298,381
Number of alcohol ads on television in 2002, according to the Center on Alcohol Marketing and Youth in Washington, D.C. That’s 39 percent higher than alcohol ads appearing on television in 2001.

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