FSM4880 Johnson Wales Alcoholic Beverages Trends Discussion Please read the materials I provided before you start the work, thanks! https://247wallst.com/i
FSM4880 Johnson Wales Alcoholic Beverages Trends Discussion Please read the materials I provided before you start the work, thanks! https://247wallst.com/investing/2013/03/11/pricing…
Please make initial posts to this discussion forum after you have reviewed the PowerPoint presentation on Beverage Trends and read the articles and watched the videos about Beer, Wine and Spirits Trends, draw at least two conclusions from the information provided and post those conclusions to the forum.
Conclusions like “people are drinking less beer” because beer sales have fallen is not a conclusion drawn from the data. Conclusions about the reasons for wine sales diminishing from a particular country would constitute a valid conclusion.
Discussion Forum Expectations: (this will be the expectation for all discussion forums)
In addition to making your initial post to the discussion forum, You are required to respond to at least two post from your classmates. You may respond as many times as you like to any discussion thread.
Citing Your responses:
Please include citations (with hyperlinks) at the end of your post or in your responses so other can see what you are referencing by your statements and use information you have found in future assignments and activities. Industry Overview:
Beverage Trends
FSM4880
Beverage Operations Management
Coffee
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Sourcing and Characteristics
Treating Coffee like wine
Region
◼ Grower
◼ Characteristics
◼ Pairings
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Why not – Even McDonald’s is doing it
French Press Program
Tea
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Sourcing and Characteristics
Health Benefits
Loose Leaf
Many of your members are used to drinking
these high-quality beverages
Beer
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Three years of no growth overall
Most recent data – 1.7% increase
Imports and Craft Beer driving increase
Imports
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Up 12%
Make up 13.7% of total U.S. sales
Super premium and Craft Beers
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Up 6.6%
Make up 3.8% of total U.S. sales
Beer
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Domestic Beer is flat
Domestic Beer
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Premium Domestics
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Down 5.9%
Popular Domestics
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Reversing downward trend
Up 0.2%
Down 4%
Light Beers
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Up 2.3%
50.5% of total U.S. Sales
Beer
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Rising Stars
Brands less than 5 years old
Smirnoff Twisted
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Heineken Premium Light
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–, 7.5 million cases
Michelob Ultra Amber
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+0.8%, 13 million cases
–, 6 million cases
Smithwick’s
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+18.1%, 1.3 million cases
Beer
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Fast Track Brands
9 million/1.5 million/4 year double-digit growth
Modelo Especial
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Stella Artois
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+34%, 19.6 million cases
+60.1%, 6.25 million cases
Blue Moon
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+79.4%, 6.1 million cases
Beer
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Established Growth Brands
3 million/4 year growth
Widmer Hefeweizen
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Dos Equis
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+15.4%, 7.5 million cases
Corona Light
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+17.9%, 3.1 million cases
+15%, 11 million cases
Pacifico
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+14.1%, 5 million cases
Beer
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Conclusions
Moving out of the middle and toward the
extremes
Your portfolio should include…
Craft brews
Domestic Lights
Lighter Imports
Wine
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Fifteen straight years of growth
Most recent data – 4.0% increase
Table/Still Wine
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Imports
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+7.6%
Domestic
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91.4% of U.S. market
+3.1%, 66% of market
Sparkling
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+3.6%
Wine
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Fast Track Brands
100,000 cases/4 year double-digit growth
21 Brands
13 California
3 Italy
1 each from Washington, Chile, New Zealand,
Australia, Spain
A variety of different price points
Wine
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Rising Stars
Less than five years, notable growth
27 brands
12 California, 7 New World, 8 Old World
Common Denominator – Less intimidation
Funky labels and names — $600 million since ‘05
◼ Varietals from the old world
◼ Accessible
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Wine
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The Data
Wine consumption among all age groups is
increasing
Baby boomers account for most of consumption
◼ Gen X is more spirits oriented but as time goes by
the drink more wine
◼ Millennials will drink more wine as time goes on
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Massive generation
Wine
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The Data
The great majority of growth brands are
domestic
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The weak dollar should favor this trend going
forward
Many growth brands are “critter brands”
Growth brands now include a significant
number of price points from $8 to $24
Wine
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The Trends
Green Marketing
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Organic, Biodynamic
Accessibility
Wines by Style
◼ Critter Wines
◼ Wines by the glass
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Drinking less but better
Wines
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You should…
Offer wines by the glass at a variety of price
points
Add organic and biodynamic wines to your list
Add more domestic selections to your list
Offer “critter wines”
Organize your list by style
Spirits
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Ten straight years of growth
Most recent data – 3.2% increase overall
Gross revenue up 5.2%
Super-premium up 16.4%
Value segment down 2.7%
Spirits
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Growth Categories
Tequila
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Vodka
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14.7 million cases, +3.8%
Cordials and Liqueurs
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49.3 million cases, +6.7%
Whiskey
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10 million cases, +10.2%
21.5 million cases, +3.7%
Rum
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22.8 million cases, +3.5%
Spirits
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Flat Categories
Gin
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Scotch
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10 million cases, no growth
n/a, +.4%
Brandy and Cognac
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10.4 million cases, +1.9%
Spirits
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Fast Track Brands
100,000 cases, 4-year double digit growth
14 Brands
9 Vodkas — Grey Goose, Svedka, Seagrams,
Three Olives, Pinnacle…
Two Tequilas – Patron, 1800
Two Rums – Admiral Nelson, Sailor Jerry
One Whiskey — Jameson
Spirits
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Established Growth Brands
900,000 cases/4 year growth
Eight Vodkas – Absolut, Skyy, Stoli
One Gin – Bombay Sapphire
Four Rums – Bacardi, Captain Morgan, Malibu,
Cruzan
Three Tequila – Cuervo, Sauza, Juarez
Spirits
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Established Growth Brands cont.
Three Brandy – E & J, Hennessy, Remy
Two Liqueurs – Grand Marnier, Jager
Six Whiskies – Jack, Crown Royal, Johnnie
Black, Maker’s Mark, Rich and Rare, Wild
Turkey
Spirits
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Conclusions
Increased interest in luxury products
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Fuels growth in super-premium brands
Cocktails are cool – The cocktail culture
Next Level Marketing
◼ What do you drink?
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Spirits – 22%
◼ Beer – 19%
◼ Wine – 11%
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Spirits
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Conclusions cont.
The biggest and fastest-growing spirits
categories are mixable
Vodka
◼ Tequila
◼ Rum
◼ Flavor adjuncts
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Cocktails are Key
Spirits
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Conclusions cont.
You should…
Treat the bar like the kitchen
Focus on Super-premiums
Focus on the cocktail – Bar Chefs
Fresh Ingredients
◼ Exotic Garnishes
◼ Muddling
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