CLAIMS OF BEING HANDMADE IS BEING SCRUTINIZED

We have all witnessed the growth of craft beers, craft wines and now crafts spirits. Craft and Artisan Spirits are trendy and so trendy that many brands are claiming to be craft brands or handmade in small batch etc. Even mega large distributors/wholesalers have started 'artisan' and 'craft spirit' portfolio and sales departments.

However, I have mostly personally witnessed a bandwagon effect and a me-too follow up on this.

Fictitious Flavored Spirits

Within the past months a few brands have been under scrutiny about the true statement of being small-batch or craft made. All in all it is catchy marketing and it is hard to decipher what is crafty or handmade or not. At some stage someone had to use their hands in the process and therefore ...

In closely watched case, Tito’s plans to contest lawsuit against its “handmade” claim says  Shanken News Daily.
Drinks marketers are likely reevaluating their label claims in the wake of a lawsuit against Tito’s Handmade Vodka for the 1.3-million-case brand’s claim of being “Handmade.” The suit, filed September 15 2014 in San Diego Superior Court.

A pair of class-action lawsuits filed this month against craft distillers has exposed what many consider the worst-kept secret in craft distilling: Despite the marketing, most liquor is factory-made"says The Denver Post.

Whisky and American Whiskey /Bourbon are faced with the same dilemma: huge demand growth and limited amount of producers, hence the growing number of bottlers trying to claim all kind of things.

For this matter, 'cognac' benefits from a strict controlled appellation. Not only the grapes, but the way the grapes are crushed, the fermentation process, distillation, etc. and another 1000 things are regulated to ensure the quality of the claims. Eventually ALL cognac is by definition produced in small-batch and handmade. However, since 90% or more is blended and distributed by a few brands the end result is mostly processed through large standardizing factories to ensure a repeatable product day after day.

My recommendation read the article from The Denver Post asap!

Source: Shanken News Daily and The Denver Post

GREY GOOSE AND JOHNNY WALKER ARE INVESTING INTO TRAVEL AND DISCOVERING THE WORLD

Johnny Walker and Grey Goose are both getting adventurous, joining the long legacy of Rasmussen or Magellan.

Explorer, Discovery, Grey Goose, and Johnny Walker

Grey Goose which is made in Cognac, has just signed a partnership agreement with Virgin Galactic to shoot the first commercial while traveling out of space using Virgin Atlantic out of space travel facility. Planned to launch in 2015, the Virgin Galactic commercial spaceflight, owned by Branson’s Virgin Group, has already accepted US$80 million in deposits from prospective “space tourists”.

Johnny Walker (Diageo) through a complicated trademark law suit against the Explorers Club has decided to settle. Even better Diageo and The Explorers Club have now announced a global sponsorship and licensing agreement to settle all outstanding litigation between the two companies.

Under the agreement, Johnnie Walker has become a corporate sponsor of The Explorers Club. This sponsoring will allow The Explorers Club to fund more educational programs and world education.

SCOTCH WHISKY INTERNATIONAL DECLINE OF SALES

Cognac is not the only brown spirit to suffer from a world sales decrease. Scotch whisky saw it worst sales decrease this year from January to June in 15 years, and this is not over.

Cognac and Scotch Sales Decline

According to the Scotch Whisky Association, exports fell 11% to £1.77 billion in the six months through June.
Major markets saw double-digit shipment decreases like the U.S. (-16% to £328 million/$538m), Germany (-22%), South Africa (-10%), Brazil (-19%), and Mexico (-27%). In Asia the drop was the worst with  China (-35%) and a key re-exporter to the Chinese market, Singapore (-46%) but also South Korea (-12%).
Still, a host of key markets enjoyed solid growth—such as France (+6%), Taiwan (+39%), United Arab Emirates (+26%), India (+31%), Australia (+4%) and Japan (+18%).

This declined is attributed to slowing down economies, China's grip on conspicuous consumption and a stronger currency exchange rate of the Pounds.

Source: Scotch Whisky Association

THE SCOTCH'S WORLD IS GOING INTO VOTING

As a graduate of the University of Stirling in Scotland, I am following with interest the debate on the voting for Scotland independence which will happen tomorrow Thursday 18th September 2014. "Uncertainty is bad for business" is a strong argument leading the "no" vote within the Scotch industry. Most polls have announced that the results will be slightly on favor of the 'No' until recently when some results have shown that in fact it might be closer and even possibly a 'Yes' winning.

Scotland Yes and No Vote

1. Uncertainty is driving to the status quo and a 'No' vote.
2. Polls might not be representative of the true responses. Admitting a 'Yes' is admitting being against the English in some ways. Social desirability might lead people to admit a 'No' easier than a 'Yes'.

Hence, it will be interesting to see what will really happen in the private rooms when people are actually voting, and there are still about 15% of the people who are undecided one day before the vote.

DECLINING COGNAC SHIPMENTS IN 2014

Global Cognac shipments declined markedly by volume and value in the year through June, with growth in the U.S. unable to offset continuing woes for the category in China. According to the Bureau National Interprofessionnel du Cognac (BNIC), shipments fell 7% by volume to 156 million bottles in the 12 months through June, with value down 10% to €2.2 billion ($2.85b).

Bureau National Interprofessionnel du Cognac BNIC Logo

A 19% slump in sales to the Far East—where shipment value amounted to €1 billion ($1.3b)—was blamed primarily on the ongoing government austerity drive in China. Cognac sales to Europe also declined, falling 12%, even as Eastern Europe posted volume progress. Meanwhile, shipments to North America—led by top Cognac export market the U.S., which accounted for 54 million bottles—delivered 6% growth by both volume and value.

Source: http://www.shankennewsdaily.com

SPIRIT SALES GOES UP AND DOWN IN A CYCLE

What comes up must come down.

Sales and Balance

I am not explaining Newton theory of gravity but the pendulum of life. Big sales, Bigger sales, and BiGGER & BIGGER SALES usually are followed by lower sales, and lower lower sales and so forth. Everything has to adapt, evolve and change but the basic concept is the one where good things have a end for some to generate good things for some other.

In business this principle is annoying but true. Hence, the importance of timing.

For the past months, we have heard of the declining sales of wines and spirits in China.

- 9% for French spirits sales in China, mostly cognac.
- 7% for French wine sales in China, -28% for Bordeaux category.

Now that we are approaching the end of the year, these news about China are only going to get worse. Why? Because if the sales were bad when the least amount of sales are made, one can only imagine the negative impact of bad sales when good sales are expected, that is when the most amount of sales is expected, i.e., end-of-the-year.

That means the end of the year and festive season sales are not going to be good and the results, reports and statistics coming from Asia are for the most part going to be even more disappointing than what has been report to date.

Another interesting data that comes from the 2014 sales results is the steady growth of Champagne sales in Asia. Nothing huge but steady. China’s recent legal recognition of the “Champagne” appellation (27th May 2013) has helped differentiate Champagne from other sparkling wines in the market, and it is likely a cause of further growth.

Sources: The Wallstreet Journal

FRANCE IS EXPECTED TO REGAIN ITS POSITION AS THE WORLD'S BIGGEST WINE PRODUCER IN 2014

Government and trade groups from Italy, France and Spain have released wine production forecasts for the year 2014, with France expected to jump over Spain and Italy to become the world’s biggest wine producer. According to France’s Ministry of Agriculture, French wine production is expected to increase by 11% this year, to 46.93 million hectoliters.

2014 Country World Largest Producers of Wines

Italy’s Associazione Enologi Enotecnici Italiani is projecting Italian wine output to fall 13.5%, from 48.2 million hectoliters last year to 41.6 million hectoliters for 2014. According to the Milan-based group, wet weather conditions are primarily to blame, with 12 of Italy’s 15 wine production regions including Piedmont, Veneto, Sicily and Puglia among others set to record volume losses that is believe to be the smallest since 1950.
Spanish wine production, meanwhile, is expected to drop by 26.3%, from 2013’s record 53.55 million hectoliters to 39.44 million hectoliters this year, according to reports from Spain’s Ministry of Agriculture.

As a result, French wines are probably going to be cheaper and more available than before. Hence, it will indirectly help the cognac where French wine might brighten the reputation and remind consumers of French alcoholic beverages.

Source: The Drinks Business‎