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Growth of spirits industry appears to be slowing

BY Tara Smith

NEW YORK The spirits industry growth slowed in 2007, due in part to a slowing economy and increased consumer interest in craft beers.

Although final year-end data has yet to be released, Eric Shepard, executive editor of trade magazine Beverage Marketers Insight, said growth in the number of spirits sent to sellers slowed in 2007 while beer shipments remained about the same. According to ACNielsen monthly retail sales data, beer outperformed spirits from September to November.

In a conference call with investors in November, Brown-Forman Chief Executive Paul Varga said wine and beer companies have benefited from slower growth in spirits, particularly in a weaker economy. Consumers faced with fewer discretionary dollars to spend due to increasing food and gas costs and declining home values—also are drinking more at home, Varga said.

Heightened interest in craft beers also may account for some of the slowdown, Shepard said. Crafts currently are one of the fastest growing beer categories and domestic brewers have been trying to get in on the success by buying smaller craft brewers and by developing brands like Blue Moon—made by Molson Coors Brewing Co.

Not everyone, though, thinks that the popularity of spirits is slowing down. John McDonnell, chief operating officer of tequila-maker Patron Spirits Co., said sales seemed to have picked up in the past week and believes growth will continue in 2008 as new drinkers enter the market with less money to spend on larger luxury items. “The cocktail culture is getting stronger,” he said, adding that liquor represents “an affordable luxury.”

Final year-end shipment and sales data is expected to be released January 11.

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Interbrand to lead design, packaging initiatives for Wrigley

BY Tara Smith

CINCINNATI Interbrand today announced that its Cincinnati arm will lead the design and packaging initiatives for chewing gum giant Wm. Wrigley Co. of Chicago.

Ronny Kastner, executive director of the Cincinnati account management team, will serve as the Wrigley global relationship manager for the new account.

Wrigley Co., with global sales of $4 billion, produces and distributes 16 international brands and owns such chewing gum brands as Doublemint, Big Red, Winterfresh, Extra, Eclipse, Orbit and Excel, as well as confections that include mints, breath strips and candies. The company had 2007 revenues of $4.6 billion and an average two-year revenue growth of 13.3 percent, according to Bloomberg.

The Cincinnati office of Interbrand, which employs more than 100 at offices in Norwood at the Smith Road exit of I-71, expects the account to bring new jobs to its local division. Kastner led the pitch to be the single global packaging design agency for the Wrigley account.

“We are thrilled, as more than 12 agencies were at the start of the process,” Kastner said.

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Nike, Coke ring in the New Year with call to fitness ads

BY Tara Smith

NEW YORK Nike and Coca-Cola are joining the bandwagon of the fitness advertisement surge which backs the most frequent New Year’s resolution—getting in shape.

Nike and Coca-Cola today announced a two-year deal, beginning Tuesday, with fitness network Exercise TV. The deal for undisclosed terms will place Coke’s Enviga green tea and brand images on some of the channel’s workout shows and create original Enviga programming. Enviga claims to help burn calories by speeding up metabolism with green tea extracts and caffeine.

Nike returns as a title sponsor for MTV’s New Year’s celebration and will kick off a fitness ad campaign around its “No Excuses” theme. “There’s no better way to deliver an inspiring message of health and fitness for the new year to the youth of America than through MTV,” said Nike spokesman Dean Stoyer.

Trend-watcher Marian Salzman at ad agency JWT stated that Coke and Nike are seizing a good opportunity to offer people a positive, action-oriented message as they try to move on from 2007’s credit crunch, housing slump, declining dollar and other woes.

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