After announcing earlier today that Beam Global struck an exclusive agreement with SWS in 21 states, adding Kentucky and Arizona, we had a chance to talk with the division’s president Bill Newlands. He addressed rumors of sell-offs and alliances and gave us a peak into the company’s future.
WSD: What does this mean for Beam to hook up with Southern in Arizona and Kentucky?
Bill: Well I think it’s bigger than just Arizona and Kentucky. They are really just extensions of a long term partnership that we’ve had with Southern and it simply extends it into two additional states. They’re an extremely strong partner for us and we thought adding those two states would further simplify our routes to market by continuing a strong partnership into the future.
WSD: Where was Beam in Arizona and Kentucky before it moved to SWS?
Bill: Our business was split in both states between Republic and Southern, partially due to prior acquisitions. This deal consolidates the business into Southern.
WSD: Are Beam, Diageo and Pernod forming a Gemini-like alliance?
Bill: No, not at all.
WSD: What’s next for Beam?
Bill: This certainly gives us a lot of confidence about how we’re going to approach the future. We have a tremendous amount of things going on as you probably know. We are on TV with Jim Beam for only the second time in our history and we’re running a fairly extensive schedule in sports for Jim Beam. We’ve also got some exciting things coming with our Sauza Hornitos tequila, so there is a lot of excitement that’s occurring in our business.
WSD: Any predictions or trends you see in 2009?
Bill: I’m sure what a lot of people are saying is fairly true and we’re seeing it as well. There’s been some migration from on-premise to off-premise, so more at home consumption rather than consumption out in the market. We’re also seeing a little divergence in category that is quite good for us. For instance, the bourbon category has been very, very resilient. Bourbon is a very positive territory and that’s terrific for us given our extensive bourbon portfolio.
We are seeing some differences in terms of price, so to some degree consumers have traded down in price. They’re looking for more value in the bottle. I think that trend is going to continue. People are being careful where they spend their money and they want to spend it where they get great value. Quite frankly that works out great for us. The Beverage Institute tested our Jim Beam White brand and it beat Jack in every way it was tested. I think that speaks fantastically about what the consumer is looking for today, which is value in the bottle and we’ve got it.
WSD: The data we’re seeing seems to suggest that the spirits industry is being hit a little harder than wine or beer due to the shift from the on-premise to the off-premise. Are you seeing that?
Bill: If you compare spirits to say, the auto industry, we’re fairly resilient. Certainly there is some moderation in consumption and I think that’s fair but it’s not as radical as you see in many businesses.
WSD: Well, I have to ask. Are there any divestitures or acquisitions on the horizon at Beam?
Bill: We don’t comment on any acquisitions but we certainly have no expectations of selling anything. I can confirm that. We’re looking to build this business. If you look at our history in the recent past, it was just a little over three years ago that we spent $5.5 billion for our portion of the Allied Domecq portfolio and that changed this business from a fairly domestic one to a worldwide business. We’re now the fourth largest player in the world, second largest in the U.S., and the largest U.S. based spirits company. We are looking forward to continuing to see our business grow and expand over time and we’ll do that in whatever way is most sensible.
WSD: Thank you for your time Bill.
WINE TRADE HAS HIGH HOPES FOR SPANISH WINES
Wine Opinions has released the first “Trade Track†report that highlights the opinions of leaders in the U.S. wine trade and trends in the wine business. The new report is based on a survey of 207 members of the Wine Opinions trade panel, which is comprised of U.S. wine producers, importers, wholesalers, retailers, and those who work in the restaurant/hospitality sector. The group gave us a peek at the multi-faceted report and here’s a brief glimpse of some of its contents.
Members of the trade held an optimistic view for continued volume growth in the U.S. wine market in 2009, both on- and off-premise. In terms of sales value, predictions for gains were not as optimistic as for volume, but still pretty positive. It’s important to point out that that the survey period occurred after the dire economic news of October.
Furthermore, a majority in the trade believes Spanish wines, both white/rosé and red wine, have the greatest potential in the U.S. wine market based on value. Other top picks for market potential in terms of value are Sauvignon Blanc, Riesling, and dry rosé in the white/rosé category, and Latin American reds (i.e., wines from Chile and Argentina).
The report covers several other topics, including wine sales in 2007-2008, the influence of wine bloggers and critics, trends in alternative wine packaging and the degree to which “green†practices in the vineyard and winery affect wine sales potential.
JACKSON WINERY IN KNIGHTS VALLEY APPROVED
Much to the dissatisfaction of some local residents, Jess Jackson was granted the approval to build another winery in the Knights Valley region complete with a tasting room. Sonoma County supervisors approved the project 4-1, and a final vote will be made on March 24.
Opponents most dislike the seven-day-a-week tasting room, which would be the first one in Knights Valley open to the public without appointment. Residents are afraid it will encourage other wineries to open a 7-day-a-week tasting room in the area, but K-J said the tasting room was essential to promote its new 5,000-case brand. The only winery now in Knights Valley was established in the late 1980s and was turned down for a public tasting room.
WSD BRIEF:
A.V. BRANDS HAS NAMED Charles Spelman to the position of vice president, western region. Charles brings more than twenty-five years in the wine and spirits industry to A.V. Brands, with former sales positions at Palace Brands, SWS, Robert Mondavi Corp., Delicato Family Vineyards and John Gott Wines.
Until tomorrow, Megan
“I’ve never been a millionaire but I just know I’d be darling at it.â€
Dorothy Parker
——— Sell Day Calendar ———-
Today’s Sell Day: 19
Sell days this month: 21
Sell days this month last year: 22
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YTD sell days Over/Under: 0
BEER SUMMIT 2009 – The Four Seasons, Austin, Texas – Join us for great speakers, intelligent discourse, good food, and of course great beer at the next Beer Summit on March 1 – 2, 2009. Click here: http://tinyurl.com/beersummit
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