Britvic, you would think, is a company that's worth analysts unpicking a bit.
Today saw the release of much-improved full-year results after a miserable 2012 hampered by bad weather and the recall of its Fruit Shoot brand. The company is also in the middle of a major cost-cutting plan that will close three of its UK and Ireland sites, while a concurrent expansion of its US franchising strategy continues apace.
All of which made it very surprising when, in the post-results conference call with investors and analysts this afternoon, there was a long, and slightly embarrassing, silence when it was turned over for questions.
No one, it seemed, wanted to ask Britvic anything. Either that, or the world's drinks analysts were still at lunch.
To put it into context, I've listened in to countless numbers of these calls, across the global beverage industry, and there has always been a few questions.
CEO Simon Litherland, who was fronting the call, took it in his stride. “Thank you very much everybody for listening in to the call,” he said after a slight hesitation. “And I wish you a good day.”
Till next time, Simon. Perhaps.
On just-drinks last week:
One would never accuse Diageo of missing a trick, and the launch this week of a limited-edition expression from one of its lesser-known blended Scotch labels shows why.
White Horse may have been the preferred whisky of Jackie Gleason's legendary pool shark Fats Minnesota in “The Hustler” (thanks, Wikipedia), but it doesn't quite have the profile of other Diageo blended drams we could mention, especially in Asia.
Nevertheless, next year is the Year of the Horse in the Chinese lunar calendar, and some canny operator in the Diageo marketing team must have been wise to White Horse's auspicious potential. Before you can say “Asian whisky boom”, out pops White Horse Gold Edition 1890, soon to be available in Asia-Pacific Travel Retail, ready for a serendipitous sales bump from travelling Chinese consumers.
If the ploy works, soon all the other whisky makers will be digging through their portfolios in search of horse-related brands, not to mention sheep, cow, snake, tiger, rat, dragon, monkey...
Four months into his premiership at Diageo, Ivan Menezes showed that he can cope with the odd curveball thrown at him by media.
At a press gathering, following an investors day in London yesterday, I decided to ask him about a slightly uncomfortable recent episode in the UK involving Guinness. The team behind the Irish stout brand took the unusal step of booking out an entire three-minute ad slot during an episode last month of ITV's primetime chatathon The Jonathan Ross Show.
So far, so good.
But the spot featured Jonathan Ross himself in a bizarre pseudo chat environment, with comedian Danny Wallace and Professor Robin Dunbar talking about the benefits of male bonding. As we reported at the time, the Twitterati were not impressed and neither was my colleague Olly Wehring.
So what what did Mr Menezes think of the debacle?
In a relaxed manner, with even a slight grin on his face, he told just-drinks: “It didn't turn to be as good as we wanted, but I'm glad they tried it... I want people to push the boundaries.”
He added: “If you're not failing, you're not trying hard enough.”
On that basis, I can't wait to see what the Guinness gang try next.
On just-drinks last week:
- Carlsberg is continuing to up its focus on Asia, last week unveiling a new boss for its regional unit. It came as the Danish brewer reported flat nine-month sales as its Russian woes remain, but its CEO predicts brighter things next year. Meanwhile, rivals Anheuser-Busch InBev were updating analysts on how it sees the US beer market, while SABMiller reported sad news of a relapse for its chairman and former CEO Graham Mackay.
- In spirits, columnist Richard Woodard rattled the cage over the issue of category definitions – with absinthe's rough treatment raising the ire of our commentator. Newly-listed Stock Spirits revealed details of a deal to distribute Diageo's premium portfolio in Czech, while Stock CEO Chris Heath insisted to just-drinks the tie-up is “complementary”.
- In soft drinks, PepsiCo put down a marker in India, saying it intends to invest US$5.5bn in the country by 2020. Meanwhile, iPro Sports Group has signed a GBP7m (US$11.3m) deal to rename Derby County's Football Club's ground after its isontic sports drink brand.
- In wine, Pernod Ricard's US unit is eyeing major expansion over the next five years and unveiled a new team to drive that effort. Back in the UK, it emerged that Direct Wines is selling the UK unit of Virgin Wines for GBP14m (US$22.4m) to the division's management team.
- Finally, we ran a round-up of the drinks industry's contribution to the relief effort in the aftermath of Typhoon Haiyan. Our thoughts and condolences go out to those affected by the disaster.
Professor David Nutt, a clever bod who used to advise the UK Government on addiction, claims he is close to discovering a chemical compound that replicates the feeling of drunkenness, but without the hangover.
So what does this mean? Is the alcohol industry about to collapse as everyone shuns beer, spirits and wine for these new, consequence free, super drinks?
As Nutt himself writes: “The challenge is to prepare the new drink in a fashion that makes it as tasty and appealing.” Which, reading between the lines, tells me his chemical compounds taste about as inviting as they sound. Certainly not a patch on a 12-year-old malt.
Another reason we're all still likely to keep our jobs is that there are other factors for why people choose to drink.
According to Ronald Siegel's book “Intoxication - Life in Pursuit of Artificial Paradise”, our desire to indulge is really an innate longing to alter our state of awareness. Siegal calls it the “fourth drive”, and puts it alongside food, sex and thirst as humankind's greatest and most basic motivators.
Though, of course, if, as Siegal says, all we desire from alcohol is the changed brain state that comes with it, then perhaps Nutt's chemical stand-ins are the perfect replacement. We scratch the itch, but we don't bleed, as it were.
In which case, we are all out of a job. And I'm in need of a stiff drink.
Next year sees the ProWein exhibition celebrate its 20th birthday. The event organisers have chosen to celebrate the anniversary with a song.
On just-drinks last week:
- Accolade Wines may still be without a CEO, but that hasn't stopped the Australian firm from making an acquisition, in neighbouring New Zealand. The company snapped up a range of wine brands from the Mud House Wine Group last week, a move which, if nothing else, suggests thatAccolade owner CHAMP is still enjoying its foray into wine almost three years on. Elsewhere in wine, reporter Andy Morton took a trip to France to see what Les Vignobles Foncalieu has been up to of late.
- Molson Coors released its third-quarter and year-to-date numbersand confirmed in the subsequent conference call that its legal row in Canada with US JV partner SABMiller is heading to the country's courts next month. And, while we're on the subject of Canada, click here for an in-depth look at the country's beer market.
- In spirits, we managed to grab some time with the MD of Pernod Ricard's UK unit, Denis O'Flynn, for a look at the division's 'post-premiumisation' strategy moving forward. Meanwhile, we alsointerviewed the MD of Cognac house Thomas Hine & Co, which recently underwent a change of owner.
- In soft drinks, a change of mayor meant the spotlight returned to New York last week. Is the ban on large sugary drinks in restaurants, movie theatres and from food carts dead and buried, or merely on hiatus as Bill de Blasio makes himself comfortable? Still in the US, regular commentator Ray Rowlands considered the potential for Coca-Cola Co's sparkling Dasani.
In the just-drinks research store, we've launched the first in a new - and ongoing - series of reports, which tell the story of major developments in the global drinks industry. Heineken's battle to secure full control of Asia Pacific Breweries dominated the headlines late last year. Here's the full story of how the saga unfolded.
There are not many things that will stop an interview quicker than asking the head of a Cognac house what his - or her - stock situation is. That's what I've learned, anyway, after talking to two of them recently.
Stocks are the Cognac industry's most closely-guarded secret, with executives more likely to divulge their online banking passwords than confess to how much eau de vie they hold. As Hine head François Le Grelle told me in Cannes last month: “If you have the (stock) profile then you can read the future of the company.”
All of which makes the purchase of a Cognac house an interesting prospect, as the buyer, initially, can only guess at what he's stumping up for. Once exclusivity agreements are reached, inventory information can be disclosed and, as Le Grelle says, there has to be some level of trust between the two parties, which means there is no nasty surprises when the warehouse doors are finally unlocked.
But still, it's a complex process.
The CEO of Altia Corp, which bought Larsen Cognac in September, tried to simplify the situation for me this week with a bit of home-spun wisdom from his native Finland. “In Lapland,” Antti Pankakoski said, “if you ask someone how many reindeer they have, they will reply, how much money do you have in the bank?”
So, bear that in mind when you're next at the bargaining point in western France.
On just-drinks last week:
- The hangover affecting Treasury Wine Estates just won't go away. After announcing in July that it would take a US$145m hit from a stock writedown in the US, the Australian firm cut its ties with its CEO in September. However, David Dearie popped up again last week as he moved to defend his time at the tiller. Not only that, but Treasury was also named in a lawsuit last week brought due to the aforementioned writedown. Meanwhile, the wine world was sent into a spin late last week after a report from Morgan Stanley claimed that there is a world wine shortage on the horizon. Head here to read Chris Losh's thoughts on this ridiculous suggestion.
- In spirits, Beam Inc released its Q3 and YTD results, with the three-month period providing a headache or two. Has the Skinnygirl bubble burst? Click here for a full round-up of just-drinks' coverage of the numbers. Meanwhile, our brown spirits commentator, Ian Buxton, shone his monthly spotlight on the Irish whiskey category.
- On the soft drink front, Tom Vierhile from Datamonitor highlighted the growing popularity of the 'flavour enhancers' sub-category. Could the dusting off and the 21st Century-ising of the cordial and squash segment provide a NPD opportunity for the soft drinks world?
- I was busy in beer last week. First up, I sounded a cathartic moan about the over-excited gossip I've been reading of late about the prospect of Anheuser-Busch InBev buying SABMiller. Come on people, we can do better than this! Then, two days in Czech gave me the chance to run the rule over Budejovicky Budvar - invariably over a plate of meat. While the brewer is a small player domestically, on the global stage it's far better known, if only for its legal row with Anhesuer-Busch InBev.
Finally, last week we launched the first in a new - and ongoing - series of reports in the just-drinks research store. Heineken's battle to secure full control of Asia Pacific Breweries dominated the headlines late last year.Here's the full story of how the saga unfolded.
Finally, finally, it's a happy anniversary for me! Thursday last week was my tenth anniversary with just-drinks. It has been a true pleasure to serve. Here's to the next ten years. Cheers.
On just-drinks last week:
- The Q3 results season continues, with Heineken being the latest major brewer to report its numbers. The company's annus horribilis goes on, with flat sales in the year-to-date prompting a warning from the brewer that its 2013 full-year net profits are expected to fall by low single-digits. And yet, as one analyst highlighted, Heineken's long-term gameplan looks sound. Also, as I suggested, maybe the firm is being a little bit too hard on itself. For a full round-up of our coverage of Heineken's latest figures, click here.
- Dr Pepper Snapple Group has had a better year of it so far, withnine-month net profits staying black on flat sales. With the "extremely challenging" adage getting yet another airing, the US-based company also expressed alarm at the marked fall in sales for diet CSDs in its domestic market. Should the company heed the advice of the analyst that suggested pricing is the answer?
- Another multinational having a tough time of late is Pernod Ricard, which saw sales in its fiscal first quarter register a marked decrease. Despite the firm maintaining that its full-year profits should stay positive, can Pernod get over its Chinese hump? The likes of Remy Cointreau are struggling to do just that.
- The wine world was surprised to learn last week that Vinexpo's planned exhibition in the country is now dead in the water. Isn't China supposed to be the next booming market for wine? Then, when we learned last week that the event organiser was not yet able to guarantee that Vinexpo Tokyo will go ahead, the concern must now be that it is alarm bells that wine companies can hear coming from the east, rather than the sound of till drawers.
Yesterday was the first day of the 2013 Tax Free World Association World Exhibition and just-drinks is back on the Riviera to deliver a first-hand account of what is happening in the alcohol industry's most lavish get-together.
We didn't have long to wait for the likely winner of most opulent display. Step forward Bordeaux negotiant Cordier Mestrezat Grands Cru who has turned up this year with a gift box made from the wood of Marie Antoinette's favourite tree. The 322-year-old oak, which grew in the Palace of Versailles, died in 2003 and a few years later was shorn of its branches. Those very limbs under which Antoinette supposedly whiled away afternoons before she too succumbed to the blade have now been turned into three wine boxes that house four of Cordier Mestrezat's most high-end wines, including a Château Pape-Clément. Despite the EUR100,000 price tag, one of the three has already been sold, although future buyers should be aware that, due to the limited nature of the raw materials, only 15 will ever be made.
Cordier Mestrezat's export director Ronan Tremelot told just-drinks that the Royal4box is one way the company lets clients at TFWA know that it is not just another Bordeaux wine merchant. “It shows that we can create and invent new things. It shows that anything is possible.”
The parties in Cannes are as flash as the displays - the show brings more money in to the city than its higher-profile film festival. Last night was Pernod Ricard's turn, and the French group did not disappoint, with dinner in the Carlton hotel on the Croisette, hosted by future CEO Alex Ricard. But, as with Cordier Mestrezat, behind the pizazz lies the usual hard-headed business. The drinks firms are in Cannes to sell, and as the clock neared midnight, Ricard was off, not to bed but to a business meeting with clients.
Tiring enough, but then there's still four days left of this.
On just-drinks last week:
- And, the numbers kept rolling in. In soft drinks, the two big guys posted their third-quarter and year-to-date numbers. While The Coca-Cola Co saw its nine-month sales and profits dip, PepsiCo was left to toast growth in both in the period. In North America, however, the two suffered contrasting fortunes again, this time in the opposite direction.
- SABMiller issued a trading update for its half-year that showed volumes and sales improve slightly in the period. While the brewer may be dealing with issues in the short-term, the longer-term future for the company looks good, according to one analyst.
- In spirits, Diageo issued a trading update soon after its investor conference, which considered the potential offered by Africa, drew to a close on Tuesday. Meanwhile, returning spirits commentator Richard Woodard cast his eye over Bacardi’s latest global push for the Grey Goose vodka brand, as deputy editor James Wilmore sat down with the man himself, Bacardi’s CEO Ed Shirley.
- In wine, the spotlight was shone on the growing influence of Hispanic consumers in the US. Could the Latino population hold the key for unlocking the world’s most important wine market?
just-drinks is in Cannes this week, at the annual TFWA World Exhibition for the travel retail channel. Take a look here for our preview of the event and, if you’re down on the Riviera, drop us a line to arrange a meet-up.
The past couple of months have seen much talk over Nelson Peltz's manoeuvrings to pressure PepsiCo into paring off its beverage units into a stand-alone company ahead of a possible sell off.
However, cutting through all the noise that has surrounded the issue - and indirectly lending support to Nooyi's cause - was the ever-reliable Warren Buffett. In an interview with CNBC today, the legendary investor simply said that, if he was running PepsiCo, he would keep both snacks and beverages, as “one of them is a terrific business (snacks) and the other is a perfectly good business (drinks)”.
Who says business is complicated?
On just-drinks last week:
- As the qualifying phase for next year's FIFA World Cup draws to a close this week,PepsiCo launched its latest global advertising campaign, featuring Argentinian football wunderkind, Lionel Messi. The tournament, which takes place in Brazil in June and July 2014, is set to be the focus for a wealth of drinks companies, not least AmBev, the Brazilian division of Anheuser-Busch InBev.
- Following William Grant & Son's announcement earlier this month that it is set to enter the single grain Scotch whisky category, we managed to secure some time with the company's global marketing manager for innovation to discuss William Grant's plans in the sub-category. My chat with Kevin Abrook followed my out-loud musings about the move. Is single grain going to replicate single malt Scotch in the years to come?
- Eyebrows were raised last week among the wine fraternity in South Africa. The region has had more than its fair share of critics in recent years, so it was with blessed relief that they will have readChris Losh's review of the South African wares on show at last month's Beautiful South tasting event in London.
- It was a quiet week for the brewers amongst us, although Carlsberg still found time to confirm to us that its Olivaria Brewery in Belarus has appointed a new CEO. Be assured that this will almost certainly represent the calm before some kind of storm in beer!
Don't forget, the latest research report from just-drinks and The IWSR has been published today. Full details of 'Global market review of vodka - forecasts to 2018' can be found here.
Heineken is about to have the most dramatic moment in its history given the Hollywood blockbuster treatment.
'Kidnapping Freddy Heineken' will tell the story of Alfred 'Freddy' Heineken, the grandson of the founder of the Dutch brewery, who, in 1983 was kidnapped, along with his driver Ab Doderer. 'Freddy', who was CEO of the group at the time, and Doderer, were only released after a ransom of NLG35m (US$20m) was paid, the largest ransom to have been met at the time for an individual.
The kidnappers were eventually caught and served jail terms.
British actor Sir Anthony Hopkins will play 'Freddy', according to the Hollywood Reporter.
It's actually the second film to be made about the incident, after a Dutch version - De Heineken Ontvoering – was released in 2011.
But, from what I have heard, neither film has had the blessing of the company; it's understandably still a sensitive topic for the group.
It looks like there will be a fresh spotlight on Heineken's past, whether the brewer likes it or not.
Follow me on Twitter @jamescwilmore
On just-drinks last week:
Constellation Brands released its Q2 and H1 results on Thursday. The US-based company has shifted from being better known as a wine producer to being referred to predominantly as a brewer. That’s little wonder, considering Constellation became the US’s third biggest brewer in June. Sure enough, the buyout of JV partner Grupo Modelo dominated last week’s numbers. which is no bad thing: Constellation’s wine and spirits sales were down by 1% in its second quarter. For our full coverage of Constellation’s results, click here.
After the announcement last month that Oaktree Capital will launch an IPO for a stake in its Stock Spirits division, the US-based private equity group made another spirits sale last week. Having found itself with a sizable holding in Groupe Belvedere, Oaktree has offloaded its entire stake in the troubled French firm, we learnt last week. Elsewhere in the spirits world last week, Beam Inc became the latest multinational drinks company to look to up the production capacity for its Scotch whisky operations; proof, then, that I was right way back in February, 2011 - If it’s brown, it sells.
For all you brewers out there, Larry Nelson did something last week that he’d never thought he’d do: He wrote about a billionaire craft brewer.
Deputy editor James Wilmore looked back five years to see how the relationship between the energy drinks sector and the health lobby has developed - if at all - in recent times.
Finally, the latest research report from just-drinks and The IWSR has been published today. Full details of ‘Global market review of vodka – forecasts to 2018’ can be found here.
UK Prime Minister David Cameron used Diageo's Smirnoff brand as a weapon for a spot of political retaliation during his speech at the Conservative Party conference today (2 October).
In a counter-dig at a Russian official's reported “small island” comment about Britain last month, Cameron bragged that the world's biggest-selling vodka - Smirnoff - is actually produced in the UK. In Fife, Scotland, to be precise.
One wonders, however, how Diageo's bigwigs feel about Cameron highlighting this fact? Does the average consumer know that Smirnoff is made in Fife? Does s/he perhaps think of it as a Russian brand? (Interestingly, it was originally created in a Moscow distillery in the 1860s).
Hugo Rifkind, a journalist for The Times, tweeted during the speech: “Suspect Smirnoff won't be too thrilled by that.” Other tweeters expressed surprise at discovering the production home of the vodka brand.
Might former CEO Paul Walsh, who is still involved with Diageo, and was, until last year, part of the Government's Business Advisory Group, be having a word with Cameron?
The beer industry has, over the past few decades at least, not been best served by American cinema.
While spirits have a sharp-edged coolness on the big screen - the opening scene in Apocalypse Now, those bits inbetween the drug-taking in Fear and Loathing in Las Vegas - beer is merely a back-catalogue of blue-collar tropes and scenes set in that same Irish bar, the one with a pool table and a neon shamrock on the wall.
That may be about to change. Dubbed the “Sideways” of beer, “Drinking Buddies”, due out in the UK and Ireland in November, attempts to jettison the working class American clichés and update the genre for beer's newest audience - the craft connoisseur.
The movie was released in North America earlier this year and got some very respectable reviews, too (currently 79% on Rotten Tomatoes). But you may have missed it because it was on a limited release and has so far taken less than a quarter of a million US dollars at the box office. Compare that to Insidious: Chapter 2 (Rotton Tomatoes rating: 35%), a new horror movie that this week alone took US$14.5m.
So maybe the beer industry, where craft beer takes all the good reviews despite holding just 7% of the US beer market, has something in common with Hollywood after all. With both, the indies get the critical acclaim but the majority of the audience sticks with the blockbusters.