ABI-SABMiller Blockbuster Closes, Reshaping The U.S. Beer Market

Anheuser-Busch InBev (ABI) has completed its blockbuster acquisition of SABMiller, in a move that reshapes the beer market both globally and in the U.S.

The new entity, created with ABI’s $100 billion-plus purchase of its archrival, will continue to be known as Anheuser-Busch InBev SA/NV. Its global market share exceeds 30%, according to Impact Databank.

In the U.S. market, the deal paves the way for Molson Coors to become the sole owner of MillerCoors. Molson Coors, which now becomes the world’s fifth-biggest brewer, according to Impact Databank, is paying $12 billion to acquire SABMiller’s 58% stake in MillerCoors. MillerCoors, the U.S. market’s second-leading brewer, was formed in 2008 when SABMiller and Molson Coors merged their U.S. brewing interests. It will remain based in Chicago, where it’s headed by CEO Gavin Hattersley. Hattersley, who became CEO in mid-2015, was previously an executive with both SABMiller and Molson Coors.

With craft and import beer growing much faster than the mainstream segment over recent years, ABI’s and MillerCoors’s grip on the U.S. beer market has loosened. Still, the two have a combined market share of more than 70%. Additionally, both players have aggressively ramped up their activities in the craft segment through a series of acquisitions.

Moet Hennessy Posts 7% Sales Growth In First Three Quarters, Propelled By Hennessy Cognac

Buoyed by strong growth for its flagship Hennessy Cognac, Moet Hennessy posted 7% organic sales growth (+5% on a reported basis) in the first three quarters of 2016, to €3.28 billion ($3.64b).

Hennessy’s volume grew by 9% during the nine-month period, with the U.S. enjoying double-digit gains and China showing progress following distributors’ destocking in 2015. Glenmorangie single malt Scotch and Belvedere vodka have also fared well in 2016.

LVMH’s Champagne business—led by Moet & Chandon and Veuve Clicquot (the two largest Champagne brands in the U.S. and worldwide)—also achieved solid growth, with sales up 3%. Prestige cuvees were particularly strong.

Moet Hennessy accounts for roughly 12.5% of parent company LVMH Moët Hennessy Louis Vuitton’s total sales. The luxury goods giant enjoyed 4% revenue growth in the first nine months of the year, to €26.3 billion ($29.2b).

News Briefs:

•Pernod Ricard is unveiling two new luxury single malt Scotch whisky expressions under its Longmorn brand, including a 23-year-old and a 16-year-old. Longmorn 23-year-old ($1,450 a bottle) was aged in traditional oak casks, while the 16-year-old ($252) was rested in a combination of ex-Sherry, American oak and traditional oak casks. Both new Longmorn whiskies, which join the brand’s existing Distiller's Choice offering (launched in January), are at 48% abv and non-chill filtered.

•Virginia Black Decadent American Whiskey, the new product from DeLéon Tequila founder Brent Hocking, has gotten off to a strong start in Canada, breaking the record for the biggest single-day launch sales in the history of Ontario’s liquor control board (LCBO). The LCBO is among the largest buyers and retailers of beverage alcohol globally, with sales up 7% to C$5.57 billion ($4.23b) in its latest fiscal year. Virginia Black ($35), which Hocking developed in collaboration with Canadian rapper Drake, debuted in the U.S. in May, marketed by Proximo Spirits. The brand will expand to the British Columbia, Manitoba and Alberta markets on October 15.

•Diageo is backing its Buchanan’s Scotch whisky franchise with a new national campaign aimed at the brand’s core Latino audience. Titled “Es Nuestro Momento” (It’s our moment), the push stars Grammy-winning musician J Balvin and encourages the younger generation of Latinos to embrace their heritage and shared sense of cultural pride. The campaign includes both English and Spanish language spots and is running across TV, digital and out-of-home channels. Buchanan’s, the U.S. market’s fourth-largest Scotch brand, reached 425,000 cases on 8% growth last year, according to Impact Databank, and has more than doubled in volume since 2010.

•Leonard Meyer, a leading figure in the spirits and wine distribution tier for more than five decades, passed away on October 8 at 91. After serving in the U.S. Army in World War II—where he was awarded five battle stars and the WWII victory medal for his service in the Pacific theatre—Meyer graduated from Atlanta Law School in 1948. He then joined his family’s Atlanta-based distribution business, State Wholesalers, Inc. He became State’s president in 1966 and chairman in 1976. State merged with fellow Georgia wholesaler Empire Distributors in 1988, and Meyer became executive vice president until his retirement in 2008.

Craft Brewing and Distilling News:

•Wyoming-based Jackson Hole Still Works recently released its second offering to market, Great Grey Gin. Billed as an American twist on a London Dry style, Great Grey (90 proof) has a scaled-back juniper profile and floral, spice and citrus notes. The label features the work of Western artist Katy Ann Fox. Great Grey Gin, which retails at $33 a 750-ml. and $24 a 375-ml., follows Jackson Hole’s existing Highwater Vodka (80 proof, $28). Jackson Hole Still Works’ products are currently available in Wyoming and Idaho.

•Rhode Island’s Newport Distilling Co. is launching a new American single malt whiskey, Sea Fog. Made from pale and peat-smoked malts, Sea Fog ($50) was aged seven years in Kentucky Bourbon barrels and is rolling out to eight states in a limited supply. Newport’s other products include Thomas Tew rum, with a footprint of 13 states, and Newport Storm beer, which is distributed in Rhode Island and Pennsylvania.

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