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Treasury Looks To Refocus

U.S. Business As Covid-19, Private

Labels Cut Into Full-Year Sales

Treasury Wine Estates posted net sales down 6% to A$2.6 billion ($1.9b) for its fiscal year ended in June, as headwinds from Covid-19 and challenging conditions in the U.S. continued to weigh on the company's business. EBITS were off 22% to A$534 million ($382m).

Treasury's Americas region saw sales slip 6% to A$1.1 billion (A$790m), with EBITS down 37% to A$147 million ($105m). Accelerating private label activity in the U.S. continues to present a challenge, Treasury said, noting, “Increased levels of supply in the market continued to contribute to accelerated movement of product through private label, which grew over 50% in the $8-$15 price points through 2H20.” As it looks to combat those conditions by streamlining and premiumizing its U.S. business, TWE added that “Work to explore the potential divestiture of selected brands and assets in the U.S. is underway.”

Still, the company has benefited from a pivot to off-premise and e-commerce channels in recent months. The priority brand stable including Stags’ Leap, Beringer Brothers, The Stag, Matua, and 19 Crimes posted depletions growth of 32% in the 13 weeks through June as off-premise gains ramped up. Treasury noted that its U.S. shipments trailed depletions by 7% for the year, “driven by industry-wide working capital management by distributors in response to the closure of key non-retail channels as a result Covid-19.”

USTR Holds E.U. Tariff Rates In Place

In case you missed last night's news alert, the U.S. Trade Representative has chosen to leave tariffs on E.U. wines and spirits in place at current rates, prompting an outcry from industry groups that say the tariffs are hurting U.S.-based importers, distributors, restaurants, and retailers and undermining the drinks business overall. Here's the full story.

Jose Cuervo Jumps Into Hard Seltzer With Playamar

Brand

Hard seltzer’s explosive growth is leading major players from across the drinks industry to enter the fray. According to Impact Databank, the top seven hard seltzer brands in the U.S. accounted for around 89 million (2.25-gallon) cases last year on 217.5% growth, and if anything the category appears to be further accelerating this year.

Now Jose Cuervo, the lead brand in the Proximo portfolio, is looking to get in on the action with the launch of Playamar Tequila Hard Seltzer. Made with Cuervo Tequila, the new RTDs are launching in lime and grapefruit flavors reminiscent of the Margarita and Paloma cocktails. Playamar is debuting in an initial six states this month, retailing at $12 a 4-pack of 12-ounce cans. Each can of Playamar is at 4.5% abv, contains 90 calories, zero sugar, and zero carbs, and is free of gluten and artificial flavorings.

Lander Otegui, Proximo’s senior vice president of marketing, sees significant opportunity for Playamar in the off-premise, where RTDs have been serving as a replacement for the on-premise cocktail experience. “We almost doubled our RTD and prepared cocktails business over the second quarter, giving a lift to our business overall,” Otegui tells SND.

Beyond selling well in their own right, RTDs and seltzers like Playamar are increasingly seen as an entrypoint to convert consumers to a spirit brand’s core offerings. The advantage is twofold: using Cuervo Tequila in Playamar distinguishes it from malt-based seltzer competitors while also courting consumers who haven’t ventured into the Tequila space before.

News Briefs:

•Ireland’s West Cork Distillers has launched a new, limited release IPA Cask Finished Irish Whiskey in the U.S. The 40% abv whiskey is a blend of 75% grain whiskey, distilled from wheat, and 25% malt whiskey that matured for four years before blending and finishing for six months in casks that held Blacks of Kinsale’s IPA. Through M.S. Walker, West Cork Distillers IPA Cask Finished Irish Whiskey will be available across the U.S. for around $33 a 750-ml.

•The Vacheron family, owners of Le Clos du Caillou, have purchased the 33-acre Domaine de Panisse in Châteauneuf-du-Pape from the Olivier family. The deal came together during France’s COVID-19 shutdown but has just been announced, much like the Guigal family’s recent purchase of Domaine Les Clefs d’Or. The purchase price was not disclosed. Wine Spectator has the full story.

•Vanderpump Wines, in collaboration with Palm Bay International, has added two new offerings to its portfolio. Vanderpump Pink and Red Sangrias both feature a grape base blended with 100% natural fruit juice. Each sangria clocks in at 12.5% abv and retails at $14 a 750-ml. The Vanderpump Wines lineup, which also features a Provençal rosé and two California wines, is spearheaded by businesswoman, restaurateur, television producer, and philanthropist Lisa Vanderpump. Last year, Vanderpump Wines was at 32,500 cases, up 73%, according to Impact Databank.

•Austin, Texas-based Fifth Generation, Inc., owner of the Tito’s vodka brand, has named Alex Borbolla as international commercial manager. In this new role, Borbolla will lead sales and work with Tito’s distributors in Latin America/Caribbean, Europe/Middle East, Asia/Pacific, and global duty free. A veteran of Seagram and Jose Cuervo International, Borbolla will report to John McDonnell, Tito’s managing director for international.

Craft Brewing and Distilling News:

•Garrison Brothers Distillery has expanded its partnership with RNDC/Young’s, bringing the Texas company’s whiskies to California and Washington, effective September 1. RNDC/Young’s currently handles Garrison Brothers in Arizona and, while the brand is available in select parts of California, the expanded partnership will bring the distillery’s products to the entire state and throughout Washington. Garrison Brothers portfolio, which includes Small Batch and Single Barrel Bourbons, plus limited releases, retails from around $90 a 750-ml. and up.

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