It's all about the brands - By the Way

Cheers, April, 2002

Last month in this space we talked a little bit about the numbers and how overall consumption of spirits, wine and beer increased slightly despite concerns about the economy and the war on terror. For on-premise operators, while things certainly could have been much worse, 2001 was far from a good year. While total beverage alcohol sales in bars and restaurants increased by $2 billion last year; according to Adams Handbook Advance 2002, it also marked the first time since 1997 that spending on drinks at on-premise ($63.6 million) establishments fell behind the dollar volume of off-premise ($63.7 million) retail.

But everything's not doom and gloom. Economic experts see signs of new life in the economy and Americans are starting to travel again which are both positive signs for the on-premise community. And in the beverage alcohol industry, as in most global businesses these days, the good news is often about brands.

Marketers have done an excellent job of creating brand identities that can strike a responsive chord with consumers. And because brand marketing works, companies go to great lengths to acquire and hold on to brands with great perceived value. A perfect example is the recently-resolved conflict that resulted in the acquisition of Malibu by Allied Domecq and of Captain Morgan by Guinness UDV.

It is the momentum of specific spirit, wine and beer brands that dramatically outperform the industry as whole that has brought about the growth we've seen in the last few years. With that in mind, Adams Beverage Group has created the Growth Brand Awards which recognize outstanding brand performance in four different categories.

The award category most worth noting is probably what we call Fast Track Brands. These are brands that have been on the market at least five years and have demonstrated double-digit growth over the last four years. Leading the way among these brands is captain Morgan with a four-year annual compound growth rate of 24% and Skyy Vodka with an acgr of 2l.5%. Equally impressive was Grey Goose Vodka, which more than doubled 2000's figures and has gone form 18,000 cases in 1997 to 600,000 last year

Among Fast Track wine brands are the leaders Lindemans, Clos du Bois, Rosemount Estates, Luna di Luna and Jacob's Creek. Not surprisingly all but one of the Fast Track beer brands are imports:

This year, eight beer brands qualified for the Fast Track and all but one of them are imports. Corona Extra, Modelo Especial, Corona Light, Dos Equis, Labatt Blue Light and Newcastle Brown Ale.

A look at al the Growth Brands can be found in the in-depth report beginning on page 12.

Cheers,

Robert Keane

Editorial Director/Co-Publisher