Liquor business tidbits from across the nation
By Paul F. Vang
Author's note: After discussions about what we should cover to keep readers informed,
Montana Tavern Time Editor Cole Boehler suggested a feature about activities in the wide beverage world. The last few weeks I’ve studied industry news and there’s lots going on, especially with industry giants. Heck, we could fill the column with just news about any one of them. On the other hand, you wouldn’t want to read it and I wouldn’t want to write it, either.
We’ll try to keep content more varied, interesting and relevant.
Irish Whiskey Capitol
Butte is one of the most Irish cities in America, and takes honors for Montana’s biggest St. Patrick’s Day, but Minneapolis, home of the Vikings and lutefisk, has, surprisingly, a lock on Irish whiskey.
The Local, a pub in downtown Minneapolis, according to the
Minneapolis Star-Tribune, won recognition for the third consecutive year as the world’s largest seller of Jameson Irish Whiskey. The Local’s signature drink is “The Big Ginger,” a mix of Jameson and ginger ale over ice, with lemon and lime wedges.
In 2008, The Local sold 671 cases of Jameson, up from 530 cases in 2007 and 397 cases in 2006.
Constellation-Sazerac Deal Still in Works
Mum’s still the word on how the Constellation sale of its “value” line of spirits to the Sazerac company (see March
MontanaTavern Times) will all shake out.
Sazerac spokesperson, Angela Traver, told the Tavern Times that the two companies are still working out all the details of the deal, and how it would affect local representatives and distributors, and didn’t think that consummation would happen until mid-March at the earliest.
Tobacco Company Ponders Wine and Beer
Tobacco company Altria Group has not decided what to do with its recently acquired wine business and stake in SABMiller. Altria acquired smokeless tobacco maker UST in January, which also includes Ste. Michelle Wine Estates and a 28.6 percent stake in SABMiller. A report in Reuters quotes chief Michael Szymanczyk saying he hopes to have strategies in place for the $8 billion in alcohol assets by the end of 2009.
Altria Group is the parent company of Philip Morris USA, U.S. Smokeless Tobacco Company, John Middleton, Ste. Michelle Wine Estates and Philip Morris Capital Corporation. Philip Morris USA is the largest tobacco company in the United States, with approximately half of the U.S. cigarette market. U.S. Smokeless Tobacco Company is the leading producer and marketer of moist smokeless tobacco.
Altria, previously known as Phillip Morris, used to own Miller Brewing and then sold it to South African Breweries to form SAB Miller. SAB Miller also brews beer in Poland and Russia… just for a start. For example, SAB Miller just bought breweries in Nigeria to enter that lucrative market. Hey, it’s hot there—it has to be a great place to sell beer.
Incidentally, SAB Miller is cutting costs back home in South Africa. Heineken, the big Dutch company, started a brewery in South Africa—the first competition SAB Miller has had there.
Recession Changing Consumers
A new Nielsen survey highlights how consumers are reacting to the economic recession and the subsequent effect on the alcohol beverage industry.
On-premise sales are slowing, but Nielsen’s study reveals pain felt by restaurants. In 2007, 18 of 25 chain restaurants posted growth. In 2008, however, 22 out of the same 25 restaurants posted declines. The only restaurants that grew sales in 2008 were Buffalo Wild Wings, Olive Garden and Red Lobster.
Beer has experienced the least impact at the on-premise level, while wine has hurt the most. The poor economy is actually helping increase “by-the-glass” wine orders, while draft beer has also gained share.
As for off-premise, beverage alcohol, wine in particular, does well in store formats selling multiple goods (food, drug and mass merchandisers, including Wal-Mart). In c-stores, beer drives the most volume while wine drives more dollar sales.
White, Red or Rosé?
A few years back an acquaintance told of an airline trip and a stewardess offering complimentary wine, asking, “White, red or rosé?” When a passenger requested rosé, the stewardess filled the glass with half-and-half red and white wine.
Maybe that was quite a few years ago, since the story was of a stewardess, not a cabin attendant, and an airline offering complimentary wine. Talk about the good old days.
Winegrowers in France's Provence region are furious over European Union plans to let producers make rosé wine by mixing red and white, saying this risks destroying a local tradition. "Provence is the heartland of rosé," said Linda Schaller, of the Chateau Les Crostes outside the village of Lorgues, one of dozens of area vineyards, half of which make rosé.
Rosé’s pink hue comes from a special technique. Red grape skins are crushed and left in contact with the white juice for a few hours, long enough to gently tint the wine, then removed.
The European Commission believes rules on how to make rosé are holding French, Italian and Spanish producers back in export markets. It has adopted a draft trade ruling that would allow wine merchants to mix red with a splash of white, and bottle the result as rosé—heresy as far as France is concerned.
ABI Mad at MADD
The American Beverage Institute (ABI) is criticizing Mothers Against Drunk Driving (MADD) for what ABI calls manipulation of the results of a
Parade magazine poll that posed the question: Should ignition interlocks be mandatory for drunk drivers nationwide?
Ignition interlocks are devices installed in vehicles to sense blood alcohol concentration (BAC) and prevent the vehicle from starting if the BAC exceeds a pre-set threshold. MADD recently sent an e-mail to its supporters urging them to vote “Yes,” a move ABI calls “making an already unscientific poll an even more unreliable indicator.”
“MADD is using these manipulated statistics to convince state legislatures to require ignition interlocks for low-BAC, first-time offenders as the first step in their goal of having them installed in all cars,” the ABI statement said. “The level would be set so that millions could not drive after one glass of wine.” The impact of such a policy on the on-premise business is clear.
Social Hosting Laws Incriminate Parents
Ordinances against social hosting are popping up in many communities, an effort to curb numbers of teenagers who drink and drive. These social hosting laws incriminate the parents, or any other adult, who provide alcohol to underage drinkers or allow it to be consumed by minors.
In a recent tragedy surrounding underage drinking, a 16-year-old Georgia boy was killed instantly during a head-on collision Jan. 24. The boy's friend was driving and both boys had been drinking. They got their alcohol from the driver's stepmother, who has been arrested on two misdemeanor counts: reckless conduct and furnishing alcohol to a minor.
She paid a $10,000 bail bond and, if convicted faces as much as a year in jail and thousands of dollars in fines.
Ads Promote Moderation
Major marketers of alcoholic beverages are maintaining or stepping up campaigns to encourage drinking in moderation. Advertising about drinking responsibly has been appearing for decades.
Responsibility campaigns are considered a counterweight to activists who seek to limit or ban advertising for beer, wine and liquor.
Now, a popular vodka brand is significantly increasing the digital presence of its moderation messages by devoting a section of its website to helping drinkers "enjoy with Absolut responsibility."
Source: The Montana Tavern Times, April 2009, published monthly by Continental Communications, 125 W Granite, Suite 102, Butte MT. 59701