Industry Issues
June 1, 2005
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Court Lets Winemakers Expand Shipments
In a much-anticipated ruling, the U.S. Supreme Court last month sided
with winemakers, striking down laws in Michigan and New York that banned
shipments from out-of-state companies. The five-to-four ruling said state
laws that banned direct shipments from out-of-state wineries, but allowed
them for in-state wineries was unconstitutional.
The case pitted the Commerce Clause of the U.S.
Constitution against the 21st Amendment, which gives each state the right
to regulate the sale and distribution of alcohol beverages within its
borders. It also represented a battle between small winemakers who were in
favor of direct shipments against wholesale companies that benefit from the
three-tier distribution system. Under the court’s ruling, states
still could ban direct shipments altogether, but they must apply the same
rules to out-of-state and in-state companies.
Soft drink industry loses a veteran
Longtime soft drink
executive Sidney Mudd died early this month in New Rochelle, N.Y. He was
88. Mudd had a more than 45 year career in beverages, including 43 years
with 7 Up bottler Joyce Beverages, retiring as president of the company in
1984. He also served as president of the National Soft Drink Association
from 1974 to 1976, and director of Keep American Beautiful.
Pernod is step closer to Allied deal
Pernod Ricard, Paris, has
tightened its lead in the race to acquire Allied Domecq, with the
announcement that London’s Diageo plc has agreed to purchase
Bushmills Whiskey and the option to acquire Montana New Zealand wines in an
exclusive agreement. The transactions are conditional on the completion of
Pernod Ricard’s acquisition of Allied Domecq, and Diageo has agreed
to not enter into discussions with any third party bidding for Allied.
The expected purchase price of Bushmills is
approximately 295 million euro, and 469 million euro for the Montana wines.
If the options are exercised, they are expected to close by the end of 2005
or early 2006.
Pepsi signs with Metromedia
Metromedia Restaurant
Group, Dallas, has signed Pepsi-Cola to a multi-year contract as the
official refreshment beverage supplier to more than 800 restaurants such as
Ponderosa and Bonanza Steakhouses, Bennigan's and Steak & Ale
restaurants.
This new partnership will add Bennigan's and Steak and
Ale to the long-standing relationship Pepsi has enjoyed with the Ponderosa
and Bonanza Steakhouses, and as part of the agreement, the restaurants will
serve a complete line-up of Pepsi-Cola's fountain beverage products. BI
Oxygen takes water up a notch
West Windsor, N.J.-based Power-Water USA formed as a water
technology systems and beverage company. PowerWater owns the rights, title
and interest in a proprietary design to produce pure distilled oxygenated
water.
The company owns a
process that infuses high-grade oxygen molecules into distilled water,
which produces PowerWater. The company says the unique process
manufacturers one of the highest oxygen content and clean- tasting bottled
waters available.
California leads wine growth
Domestic wines are the
overall winners in table wine growth, but Australian Yellow Tail is the top
earner, according to Information Resources Inc.’s first Table
Wine Trendsetters Ranking. The study pinpoints the Top 25 most influential
table wine brands based on volume growth, share of segment trends,
merchandising effectiveness, front-line pricing stability, profitability,
distribution gains, incremental sales, and sales velocity growth.
According to the report, California vintners are
making a comeback through the purchase of brands or joint venture brands
with Australian winemakers, the creation of new brands at different prices
to compete with imports, and new, more relevant consumer packaging.
Key trends that emerged include:
An increase in merchandising support appeared to
contribute to the success of the Top 25 brands.
15 of the Top 25 brands are domestic table wines from
California.
Imported table wine brands held 7 of the 25 spots,
with Australia as the No. 1 import country of origin with three brands.
The majority of brands (84 percent) are premium priced
at $5.50 and above, while no brands in the $2.99 and below segment made the
ranking.
All table wine trendsetter brands grew by double
digits or more in dollars over the 52 week period and 21 of 25 brands grew
by double digits in volume.
Nearly all (24 out of 25) brands increased their
presence at retail with an increase in average items per store and
increased distribution.
To qualify for the study, brands had to meet a minimum
requirement of 100,000 9-liter cases sold.
“The wine market is incredibly dynamic and
today’s winemakers are taking product development,
marketing and retail execution to the edge of the envelope,” said
Bump Williams, executive vice president and general manager, global
consulting, beverage alcohol practice at IRI. “The brands on this
year’s Top 25 have put traditional thinking to the wayside and
delivered breakout performances through new and innovative thinking.”
| Top 25 table wine trendsetters | |
| Rank | Table wine brand |
| 1 | Yellow Tail |
| 2 | Mirassou |
| 3 | Barefoot |
| 4 | Sterling Vintners Collection |
| 5 | Smoking Loon |
| 6 | R H Phillips Vineyard |
| 7 | Ravenswood Vintners Blend |
| 8 | Francis Coppola |
| 9 | Leaping Horse |
| 10 | Crane Lake |
| 11 | Columbia Crest |
| 12 | Bella Sera |
| 13 | Blackstone |
| 14 | Alice White |
| 15 | Schmitt Sohne |
| 16 | Century Cellars By BV |
| 17 | Bogle Vineyards |
| 18 | Covey Run |
| 19 | Black Swan |
| 20 | Concha Y Toro Frontera |
| 21 | J Lohr |
| 22 | Estancia |
| 23 | Louis Jadot |
| 24 | Chateau Ste Michelle |
| 25 | Foxhorn |
Go figure
5.2
Millions of liters of wine exported from New Zealand
in March 2005, the largest amount ever shipped in one month, according to
New Zealand Winegrowers. That represents a 73 percent increase over the
same period a year ago.
10
Percent demand for organic milk that is greater than
the supply, according to the Organic Trade Association. Traditional
supermarkets are experiencing greater shortages than local stores despite
the price differences between organic and regular milk, the association
reports.
33
Percent of Spanish brewer Mahou SA Groupe Danone
intends to sell for 600 euro. Mahou was the last of Danone’s brewing
interests and follows the sale of breweries in France, Belgium and Italy.
51
Percent of consumers who preferred store brands in a
10-city taste test conducted by Meyers Research Center for the Private
Label Manufacturers Association. The test compared products in 12
categories, including orange juice, coffee, cookies, iced tea, cola,
cereal, potatoes au gratin, ice cream, pizza, chicken nuggets and frozen
broccoli.
74
Percent of health club members who also regularly go
to bars and nightclubs, according to the Health Club Panel Network. Health
club members also are 60-94 percent more likely to drink alcohol beverages
– 60 percent more likely to drink vodka, 64 percent rum, 77 percent
imported beer or tequila and 94 percent super-premium domestic beer –
than the general population.
175
Number of products marketed last year as
“low-glycemic” vs. two in 1999, according to Productscan
Online. However Productscan’s Tom Vierhile predicts the glycemic
index is too complex to be the next big diet fad. “Most American
consumers never learned how to program their VCRs,” he says.
“So why would they bother paying attention to their glycemic
indexes?”
