Pernod Ricard’s sales fall 14.5% in Q3

24th April, 2020

Spirits giant Pernod Ricard’s global sales fell 14.5% in its third financial quarter as the widespread closure of bars and restaurants took effect.

Alexandre Ricard

Pernod Ricard’s sales fell organically to €1.73 billion (US$1.86bn) in three months ending 31 March 2020.

And for the nine-month period to 31 March 2020, Pernod Ricard’s organic sales fell 2.1% to €7.2 billion.

In the year to date, sales in the US grew 3%, led by brands such as Jameson whiskey, The Glenlivet, and Malibu rum, although there was a significant slowdown in the third quarter “due to confinement and physical distancing measures implemented in most States,” it said.

In China, sales “severely” plummeted by 11%, which the group blamed on on-trade closures starting at the end of January. Sales were also impacted by the cancellation of Chinese New Year celebrations.

Sales in India grew by 1%, compared to 19% growth in the nine months to February 2019, but the country’s own nationwide lockdown imposed on 24 March hurt this year’s Q3 performance.

The company’s global travel retail business was one of the hardest hit, with “severe decline from February,” of 13%,  driven by restrictions and lockdowns imposed across the world.

In Europe, sales have remained “stable” so far, with 2% growth in the year to-date, but the company’s “good performance to February” was severely impacted by a “double digit decline” in March once lockdown measures started come into effect.

The Jameson whiskey owner said that the Covid-19 outbreak will have “widespread repercussions” on business last month, and expects operating profit to fall by 20% in FY20. The company had initially expected that the virus could cause a 2% fall in its FY2020 sales.

Alexandre Ricard, Chairman and Chief Executive Officer, said, despite the blow, Pernod Ricard H1 sales through the start of Q3 were “solid, thanks to the implementation of our Transform & Accelerate strategic plan.”

As part of this plan, which launched in 2019, the company said it was to merge its two French businesses, Pernod and Ricard, which would lead to 280 jobs being open to voluntary redundancy.

“Since then, the Covid-19 pandemic has led to a significant deterioration of the environment across the globe.”

“I would like to praise the exemplary behaviour of our teams and their impact on their respective communities around the world at this very difficult time.

“Under current assumptions of the impact of Covid-196, we are confirming our guidance of an organic decline in Profit from Recurring Operations for full-year FY20 of c. -20%.

“We are staying the strategic course while implementing a comprehensive action plan to mitigate costs and tightly manage cash. Thanks to our solid fundamentals and strong liquidity position, I am confident in Pernod Ricard’s ability to bounce back from today’s challenges to achieve its growth potential.”

Pernod Ricard said sales of “strategic local brands” fell by 1%, while “speciality brands” grew 13% thanks to Lillet apéritif, Altos Tequila, Redbreast Irish whiskey, Monkey 47 gin, Aberlour Scotch whisky and Del Mageuy mezcal.

It comes as little surprise then, that the group is investing in more speciality brands. After recent investments in aperitivo Italicus and Japanese gin Ki No Bi, French drinks group Pernod Ricard bought the remaining stake in German gin brand Monkey 47 at the end of March.

Budweiser revives ‘whassup’ ad for lockdown era

24th April, 2020

Budweiser has revived its famous “whassup” advert to reflect the lockdown situation in the US.

(Photo: Budweiser)

The AB InBev-owned lager brand has recruited former NBA superstar Dwyane Wade and his wife, actress Gabrielle Union, to star in the new advert, as well as some of their friends including Chris Bosh, Candace Parker, and DJ D-Nice during one of his ‘Club Quarantine’ dance parties.

The original “whassup” ran from 1999 to 2002, and first aired on December 20, 1999. The ad campaign was run worldwide and became a pop culture catchphrase, and arguably one of the first adverts to go viral. The catchphrase has been parodied numerous times, with nods to the commercial appearing on The Simpsons, Scary Movie, and more recently, by TV presenter James Corden on the Late Late Show.

The first episode shows Wade and his wife, actress Gabrielle Union, checking in on his friends.

A second episode featuring Wade, Union and other stars will premiere later this month.

“We both remembered the original ‘whassup’ ads and love the idea of bringing them back as a genuine PSA to connect with each other,” Wade said.

“We encourage everyone to take a moment out from their day to check-in with their friends and loved ones during this difficult time.”

Budweiser has partnered with The Salvation Army as part of the PSA campaign, and will make a donation to the charity to fund its newly launched hotline directed at people suffering from high levels of anxiety and loneliness during lockdown.

“Thanks to modern technology, we’re able to remain virtually connected in ways that otherwise we would not have been able to within the current distance-mandated climate,” Monica Rustgi, Vice President of Marketing for Budweiser, saud.

“In times like these, something as simple as a hello, or in this case ‘whassup,’ means a lot. Following the unbelievable success of the original ad campaign, we found this to be a meaningful opportunity to revisit the original spot’s simplicity and focus on human connection in a time when people may be feeling hopeless, uncertain, and alone.”

Johnnie Walker launches online tutorials by celebrated bartenders

23rd April, 2020

With social distancing in force, Johnnie Walker has invited five celebrated Hong Kong bartenders to share their original recipes and tips for cocktail making at home.

In the simplest forms, whisky highballs are a mixture of whisky, sparkling water, mixer, ice and garnish. Easy to make and drink, various whisky characteristics in the highball can be highlighted by adding different garnishes and mixers.

Johnnie Walker Black Label, as one of the staples in bars, invites five seasoned bartenders in Hong Kong to give their tips on creating the simple cocktail with a twist.

Shelley Tai, the winner of the 2019 World Class Hong Kong and Macau Bartending Competition, shares a concoction made by honey syrup, lemon juice, grapefruit juice and soda water. Prepared by either shaking or stirring, the intricate touch is adding two pieces of salted plum to impart an Asian flair. The sour saltiness of the plum can further boost the fruitiness of the whisky.

Yvonne Chan, former head bartender of The Old Man Hong Kong, magnifies the flavour of all ingredients with her secret of adding salt and pepper to the highball. Her recipe also comprises whisky, lemon juice, apple juice and ginger beer and is packed with fruity and spicy notes.

Fans of robust smokiness should try a trick from Henry Ho of Bar 001. Add soda water to the well-mixed ingredients of whisky, passion fruit, kumquat and yuzu jam. The final step of a sprinkling of pink pepper can further intensify the smoky aroma of the whisky.

For further details, see the brand website.The full recipes will be uploaded by the end of the month.

Pubs could ‘go bust’ if rents aren’t cancelled

23rd April, 2020

Publicans have launched a campaign asking pub companies to cancel tenants’ rents while the UK’s coronavirus lockdown won’t allow them to open.

London pub

A group of UK pub operators launched a campaign called #NoPubNoRent on social media last weekend, calling on companies to cancel rent payment for the months in which sites have been unable to trade at all due to lockdown.

Prime minister Boris Johnson told all pubs, bars and restaurants to close on 20 March, leading to widespread loss of income throughout the on-trade.

Companies such as Greene King, Star Pubs & Bars and Marston’s and Enterprise Inns have told tenants they plan to defer all rent payments until lockdown measures are lifted.

But Dave Mountford, who runs the Boat Inn in Derbyshire, told the drinks business that publicans need more than a deferral if they are to survive the long-term damage the government’s lockdown measures will cause.

“By the time they re-open they will all end up with £40,000, £50,000 worth of debt,” he said.

In normal trading conditions, pub groups such as Greene King and Marstons collect the majority of their profits from beer ties. Pubs under tied agreements purchase beer from these companies, often at a large mark-up, in exchange for reduced rents.

But with publicans unable to shift the vast majority of what is in the cellar, pub groups are even more reliant on rent to stay afloat.

Mountford said the majority of businesses have continued to charge rent “simply because they can’t afford not to charge rent – the beer tie no longer exists.”

“Either we lose our homes, careers and communities or we get into a debt we cannot repay or go bankrupt,” Edward Anderson, who runs three Marston’s pubs in Cheltenham and co-founded the campaign, told the drinks business.

Pubs’ rents are calculated by their turnover as opposed to square footage, which means they typically pay more than other businesses.

“Our rents are based on turnover, as are all pubs, which means they have not been calculated to cover a period when there is no money coming in,” Anderson said.

Anderson’s rent is £14000 a month, so he will owe this much for every month his pubs are not allowed to reopen.

But monthly rent payments don’t allow Anderson to save enough to be able to pay back this debt, “it’s not how the calculation was done.”

“The only fair solution has been offered by a number of pub companies and brewers, that is no pub, no rent. We are asking for the rest of the pubcos to follow this example and give us a chance of reopening.”

Admiral Taverns is one of few groups that has completely cancelled rent for their tenants, but it plans to review the situation this month.

Others that have cancelled rents include Adnams, Donnington, Fullers, Robinsons, Shepherd Neame, Timothy Taylors, and Youngs.

Ei Group, Punch, Greene King and Star Pubs and Bars have suspended rent collection, while Marston’s are suspending rents on a “case by case basis” according to the Campaign for Real Ale.

A spokesperson for Greene King told the drinks business: “As an employer of 38,000 people who rely on us for their livelihoods we are taking financially responsible decisions.”

Greene King told db: “All pubs and pub companies are under immense pressure currently and we acted swiftly to alleviate any immediate cash flow concerns for our leased and tenanted partners by deferring rent.”

The company said it has written to close to 1000 tenants within its portfolio, and since then have been working on “long-term proposals that can work alongside government schemes to offer tailored financial support on rent to our tied tenants who have been impacted most by this crisis.”

“There isn’t a one size fits all solution and the support plan we’ve now communicated is fair, bespoke and aims to ensure that as many of our partners as possible are able to emerge from this crisis in a strong position, as we all look to recover our businesses together.”

A spokesperson for Marston’s told Metro.co.uk the group will review its tenants’ situation on a “pub by pub basis.

“Our view is that many pubs will be affected differently and there will not be a ‘one size fits all’ solution.”

Ei also told the publication that the pubco “continues to communicate directly with our publicans and have advised that rent and charges continue to be deferred for the foreseeable future.

“We will be working with each of our publicans on an individual basis in order to best provide the right level of support and assistance in each case when we are permitted to re-open for business.”

In an effort to support site operators in the meantime, Heineken, which owns Star Pubs and Bars, has launched a new website, www.thepubcollective.co.uk, which includes government advice, support and how to access it.

Stephen Watt, on-trade sales director at Heineken UK, said: “It’s a worrying time for everyone and we are doing all we can to support our on-trade customers and Star Pubs & Bars licensees. This pop up website makes it easy for them to access all the information they need in one place.”

English wine producers ‘need to make more of e-commerce’

23rd April, 2020

Elisabeth Else, founder of Wine Cellar Door and e-commerce consultancy The 3 Bottles, says English wine producers should view e-commerce as a money-making tool and “not a necessary evil they need to pay for”.

Else’s Wine Cellar Door site has launched a new online shop featuring a selection of producers.

Speaking to the drinks business, Else said that while some producers were clued up and had invested in online shops well before Covid-19, for others it is still an after-thought.

“People pay so much for a fancy architect and an amazing looking cellar door, and spend a fortune on labels and packaging. We’ve got producers who are making a lot of money from their online shop, but most people seem to seem to think it’s a sort of necessary evil that they need to pay for, not a tool to make money. For us, it’s most definitely a tool to make money,” she said.

The 3 Bottles helps producers construct bespoke online shops, which can be scaled up according to demand. Most producers then manage it themselves, but return to Else “every six months or so for a service” when a larger project needs to be uploaded onto the site.

Else believes that as the English wine industry, and therefore competition, grows, e-commerce should be taken more seriously. In addition, she feels English wineries should follow the example of their American counterparts, and invest time in building mailing lists and launching wine clubs.

Many of the larger wineries, for example Gusbourne and Ridgeview, already have such schemes, but Else says more need to follow their example.

She said: “I’ve attended the Direct to Consumer Wine Symposium for a couple of years and went round wineries in Sonoma afterwards.

“They simply cannot grasp the fact that we don’t have wine clubs here. They told me ‘we know we could not make a profit if we didn’t have wine clubs’.”

She added that wineries must step-up their on-going engagement to create comprehensive mailing lists that could aid them in a time of crisis, like we are experiencing currently.

Elisabeth Else

“I made a big effort to go around the wineries in California that were particularly badly affected by the fires and understand how they were rebuilding,” she said. “They were in a situation where they were re-opening and had to get the message out. By having a mailing list, you have people that care about you, and by having a wine club, you can have the planned revenue still coming in.”

Else is also the founder of searchable wine tourism website Wine Cellar Door. The site allows users to see vineyards in the UK on a map, and search according to criteria including ‘vineyards that do weddings’ or ‘vineyards where you can help with harvest’.

She has just launched an online shop function, which she described as a natural progression for the website.

Else doesn’t hold stock, and instead all transactions are made on individual producer websites. Each of Wine Cellar Door’s premium listings has been offered the opportunity to provide a mixed case for sale via the shop.

“Before, if people had a great experience at their local vineyard, they’d be more likely to buy the wines there or buy them afterwards. We’re looking at it the other way round and offering the opportunity to try a selection of wines from a producer, and think about visiting them afterwards,” she said.

“By driving traffic back to the producer’s own website, this service will help our premium listing members to continue to reach out to new consumers while ensuring that they retain 100% of the sale price.”

Prosecco brand Alberto Nani brings ‘quarantine series’ to Instagram

23rd April, 2020

Prosecco brand Alberto Nani has launched a ‘quarantine series’ on Instagram with tomorrow’s episode turning the spotlight on the UK.

Called Lunchbreak in London, the next episode is the third in the series, which sees Alberto Nani feature ways of enjoying Prosecco during coronavirus lockdowns in different countries, from the US to Australia, and of course Italy too.

The UK focused episode, which you can see at 1.30pm tomorrow, will feature London-based food and travel blogger, called Binny, who is also a wildlife conservationist.

Her combination of interests is apt, with Alberto Nani being a specialist in the production of organic DOC Prosecco.

In a new development for the producer, Alberto Nani Prosecco DOC Organic is now also vegan certified. The brand is a pioneer in the now fast emerging area of sustainable and organic Prosecco production.

Read more

A ROSE FUTURE FOR PROSECCO

Virtual wine and spirits tastings you can enjoy at home

23rd April, 2020

Food pairing masterclass

So you’ve been in lockdown for just over a month, and you’ve now learned to shuck oysters, pipe meringues, burn butter and just ordered a sous vide on Amazon.

Your kitchen skills make Simon Rogan look like a forgettable Masterchef first-rounder, but what are you going to drink with your lovely creations to elevate the flavours to God-tier?

Luckily, The Wine Workshop has just launched online wine and food pairing masterclasses hosted by Britain’s leading names in the world of vino.

Classes will be led by luminaries such as Jane Parkinson (Saturday Kitchen Live and Stylist‘s wine expert), Douglas Blyde (ES Magazine and Wine List Confidential) and Master of Wine, Nancy Gilchrist.

Signing up to a 60 minute class gives you a hamper for two, containing three wines and three complimentary dishes crafted by the team’s specialist luxury caterers This package will also include the log-in code and details for your particular workshop.

The first class kicks off on 30 April, with Jane Parkinson delivering a run-down on planet-friendly wines.

When: Every Thursday

How much: The Community Package – A virtual online tutorial that creates a sense of community via education and experience – starts at £145

Find out more: here

The Flatgate Partnership releases trio of 2018 Ports

23rd April, 2020

In keeping with tradition, The Fladgate Partnership has chosen St. George’s Day to release a trio of Ports from the 2018 vintage from its Taylor’s, Fonseca and Croft brands.

The Fladgate Partnership has released a trio of 2018 vintage Ports to mark St. George’s Day

Conditions in 2018 were excellent in the Douro Valley and “exceptional” in the Douro Superior, leading Adrian Bridge, managing director of The Fladgate Partnership, to declare 2018 to be a “classic” vintage for Taylor’s.

“As Taylor’s is the only one of our companies with extensive land holdings in the Douro Superior, it has been able to make a classic vintage in 2018. All our properties are farmed so that every grape has the potential of being made into vintage Port,” Bridge said.

Head winemaker, David Guimaraens, added: “The Douro Superior enjoyed the combination of abundant ground water and hot summer weather which often produces great vintage Port.

Adrian Bridge, managing director of The Fladgate Partnership

“It has given us the excellent phenolic maturity typical of a hot ripening season but the fine multi-layered fruit, fresh acidity we normally see in cooler years.”

While a classic declaration normally only happens about three times a decade, the exceptional run has meant that Taylor’s is able to make a third in a row.

“This is very unusual, but our principle is that we only declare a classic vintage when the quality is there and this is dictated by the year.

“In view of the economic situation in which we find ourselves, we will bottle in July as usual, but will not offer the wines until early 2021,” Bridge confirmed.

Meanwhile, Fonseca will release a 2018 Guimaraens Vintage Port – the first bottling under the Guimaraens label since 2015.

“The Guimaraens concept is unique, a wine with the same make up and character as the classic Fonseca vintages but made in a more approachable, early drinking style,” Bridge said.

Guimaraens added, “The 2018 is one of the finest recent examples of a Guimaraens vintage, with its rich, dense woodland fruit and sturdy but well integrated tannins.”

Finally, Croft will release a 2018 single quinta vintage Port from its historic Quinta da Roêda estate.

“The Quinta da Roêda 2018 delivers the characteristic ripe fruit and scented quality, which are the hallmarks of the Roêda wines together with the taut tannins and freshness of the year,” Bridge said.

Commenting on the year, Guimaraens noted, “The 2018 harvest has produced outstanding vintage Ports, but the year was not without its challenges, which included the severe hailstorm that devastated many Pinhão Valley vineyards, including those of Taylor’s Quinta do Junco.

“It is important to note that the 2018 wines have the highest colour intensity of recent vintages, which is a sign of good extraction and longevity.”

How ‘very socially disruptive’ measures will effect the wine trade

23rd April, 2020

With England’s chief medical officer Chris Whitty warning last night that “very socially disruptive” measures would have to stay in place for the rest of this year, we consider what this will mean for the wine trade.

While the entire wine industry is looking forward to an end to the coronavirus lockdown in the UK, there are major concerns for all parts of the supply chain that come with a re-opening of businesses with social distancing guidelines still in place.

In terms of the hospitality sector, it is hard to see how such measures could be adhered to while running a fully functioning business, both in terms of the practicalities – how can you serve a customer and keep a 2m distance? – but also the bigger issue that a part-filled bar, pub or restaurant won’t be profitable.

As MD at London’s Vagabond Wines, Stephen Finch, told db earlier this month, “Social distancing will be the new norm for a while, so we will have a drastically reduced patronage,” he said.

“Our costs will go up [after the lockdown ends] but our revenue will not go up commensurately,” he added – meaning that many businesses simply won’t be economically viable.

Referring to a future solution to Covid-19, he also noted that the “talk about a vaccine is a red herring and counterproductive,” pointing out that “One won’t be ready at scale for 1-2 years.”

Consequently, he said, “Do we really want spend our every day for the next year or so social distancing? We shouldn’t forget that the mortality rate for the coronavirus is a vanishingly small 0.1-0.3% for the non-old (55-60+) and non-vulnerable. The solution is not a vaccine but the much derided herd immunity.”

However, social distancing measures are due to remain in place in the UK to prevent a second wave of the virus, because, with only 5% of the population believed to have contracted the virus, at the moment there is no ‘herd immunity’ – and it’s feared that trying to achieve one would have a huge impact on the health service and the economy.

While much of the media focus of the lockdown and social distancing measures has focused on the most obvious victims, particularly the UK pub sector, the suppliers to the hospitality sector are equally severely affected.

As previously reported by db, those businesses that specialise in supplying wine to bars and restaurants have seen demand fall to nothing overnight, and yet don’t receive the same level of Government support as the hospitality sector.

Such suppliers also have the additional burden of excise duties, which is why the WSTA is lobbying the Government to allow businesses to spread duty payments over the remainder of the year.

And they often have a further cash-flow problem in that much of the wine already supplied into the UK on-trade over recent months has yet to be paid for, with invoices unlikely to be settled by bars, pubs and restaurants until they reopen and start to receive enough income. Excaberating this is the fact that in some cases, such establishments may have already decided to close down for good, or won’t be able to survive after the lockdown ends with social distancing in place.

Of course, if the on-trade suppliers aren’t being paid, then neither will their wine producers, meaning that both parts of the supply chain face the double hurdle of zero ongoing trade, and a loss of income from orders that were fulfilled, but not yet paid for.

While some wine producers have benefitted from an upsurge in volume sales through UK retailers, offsetting the losses suffered in the on-trade, the growing off-trade demand tends to be for cheaper wines.

Speaking to db this morning, Terry Pennington, the commercial director for the UK and Ireland at South America’s Santa Rita Estates, highlighted the impact.

“Our on-trade business has not so much been badly hit but completely gone, and where we have a listing in a major multiple, then it’s great if you can keep the wine moving through, but it tends to be lower value… the premium sector has been greatly impacted; the mix and value are not as good as they were.”

Another concern for wine producers along with importers and distributors is the fact that there are currently fewer channels to sell wine.

This may make it harder to retain listings in the short term, while reducing choice for the eventual consumer.

In anticipation of this, Pennington said that as soon as it became clear that the lockdowns were coming, Santa Rita reduced the range of wines they were bottling to its core lines, taking the total down from around 300 to 100 different wines.

The longer term fear is that some of the importers in the UK that are focused on selling a more eclectic mix of wines won’t have enough cash to stay afloat because the establishments they supply aren’t receiving any income during the lockdowns, and not enough in the future with social distancing measures still in place.

This means that the less mainstream and more expensive wines could find it increasingly hard to find a home, and Pennington’s fear is that this could have a negative effect on the overall image of wine, so often seen in its best light when served properly in a restaurant setting.

“I’m worried there will be an impact on the appreciation of wine,” he said.

Nevertheless, to conclude on a positive note, the pick-up in the e-commerce drinks sector since the lockdowns began offers much hope for the wine business, because it gives the trade a powerful way to communicate directly with drinkers, wherever they are enjoying a glass.

And building on this new, increasingly connected digital community of wine lovers provides the great opportunity for all in this business both now and after the social distancing measures come to an end.

Read more

SUPPLIERS TO ON-TRADE NEED MORE SUPPORT FROM UK GOVERNMENT DURING COVID LOCKDOWN

Hail storms damage parts of Bordeaux

23rd April, 2020

Parts of Bordeaux’s Right Bank and Entre-Deux-Mers were pummelled by hail stones last week when storms struck vineyards on 17 and 18 April.

The more severe of the two storms took place on Friday 17 April and struck vineyards around Saint-Émilion, particularly in the communes of Saint-Sulpice de Faleyrens, Vignonet, Saint-Christophe-des-Bardes, Saint-Étienne de Lisse, Saint-Hippolyte, Puisseguin and Castillon.

Meanwhile, in Entre-Deux-Mers, areas including Grézillac, Targon, Daignac, Espiet, Branne and Saint-Léon were affected.

A second cloudburst struck on the following day, mostly over the Saint-Julien-Beychevelle appellation, but reports indicate that the damage wasn’t great, with the amount of water falling in a short period proving more of a concern.

In a bulletin, the Gironde Chamber of Agriculture said the first storm caused damage in a “south-west-north-east corridor”, stretching from Entre-Deux Mers, and the Saint-Emilionnais to Castillonnais and Dordogne.

Damage ranged from minimal to 100% destruction, and having mapped the areas affected, first estimates indicate between 600 and 800 hectares of vines are more than 80% damaged. The map can be found here. 

Other areas reporting damage include La Sauve, Tizac de Curton, Moulon, Saint Radegonde, Juillac, Flaujagues, Doulezon , Ruch, Saint Philippe d’Aiguille,  Monbadon, Côtes de Francs, Saint-Cibard, Tayac, Pellegrue, Massugas, Caplong, Eynesse and Saint Avit de Soulège.

Philippe Raymond of Saint-Émilion Wine Council (CVSE) estimates that between 3,000 and 4,000 hectares have been affected on the Right Bank, with between 10% and 100% crop losses.

Christophe Château, communications director the CIVB, said it was “too early” to tell the impact on this year’s harvest.

He told Wine Spectator that the hail damage would not affect the yield for the Gironde region, but said that some estates have been “severely impacted”.

Speaking to France Info, he added that parts of Entre-Deux-Mers and Côtes de Francs, in particular Château Le Puy, had been “very affected”, and Saint-Émilion less so.