Contents Agile Media Ltd, Zurich House, East Park, Crawley, West Sussex RH10 6AS Direct Line: +44(0) 1293 590049 Fax: +44(0) 1293 474010 Putting a value 30 18 on brands News 21 Brands by Value ell, we have stuck our 05 Business News In conjunction with brand valuation necks out and tried 08 People and Events consultancy Brand Finance, Drinks to put a value on the 10 What’s New International publishes the Top 50 spirits major brands that 12 St Patrick’s Day Promotions and wine brands by value occupyW our space. 14 Travel retail News Thanks to the expertise of Brand Features Finance, with its incredibly complex Previews 30 German Wine methodology, we have come up with what we believe are 16 IAADFS German wines are in rude health with old the most valued brands. The International Association of Airport stagers such as Blue Nun and Black Tower Frankly, there are no major surprises. There should not Duty Free Stores’ Duty Free Show of the leading the way. Richard Woodard says Zum be, if we are doing our job correctly. The likes of Johnnie Americas Wohl Walker, Bacardi, Smirnoff and Chivas Regal would be in most people’s top-of-head best five. 37 ProWein 41 armagnac The consistent pressure on all publicly quoted The big German show in Dusseldorf In its 701st year, Armagnac’s producers companies to always produce results, progress and are turning their attention to new markets volume statistics can mean that the worth of a product Analysis – China, Japan and Australia. Richard is undermined in the long term. You only have to look 18 Global Travel Woodard reports at how major Australian wine producers have suffered Diageo has decided to put a concerted as they have chased volume and bowed to pressure from effort into travel retail/duty free. Christian 45 Bar Ingredients major multiple retailers. Great brands such as Penfolds, Davis heads west Jaq Bayles checks out the latest must- Rosemount and Hardys have lost a lot of their gloss over haves for the back bar the past few years. 20 The Future of Fortified Wine The spirits industry is an old hand when it comes to Peter Cobb puts the case for greater 48 Bar Zone brand building and protection. Champagne is pretty good investment in the likes of sherry, port and Hamish Smith reports on measuring for as well when it comes to knowing when to promote and/ madeira. Support it or lose it pleasure in Cognac or discount and when not to. Just as Millionaires is a special brand, exclusive to 22 Profile: Dan Edelstyn 50 Departure Zone Drinks International, we hope to build Brands by Value From documentary film making to Captain Morgan and the Morganettes, in much the same way. Zorokovich 1917 vodka. Budmo! says book reviews and Cuban dancing while Lucy Britner cruising the Baltic Christian Davis Editor march 2011 DRINKSINT.COM DRINKS INTERNATIONAL 3 News Most valuable brands revealed rinks International in Chinese baijiu brands, Kweichow Dconjunction with Brand Moutai and Wuliangye. Finance, a consultancy that “We felt the time was ripe to specialises in evaluating brands and add a complementary league table companies, has published a World’s highlighting the most valued and Top 50 Spirit & Wine Brands by therefore, one assumes, the most Value (see pages 25-28). profitable brands,” said DI editor The new league table follows Christian Davis. DI’s well established Millionaires “Volume is obviously vital to Supplement – brands that have achieve critical mass but volume sold a million-plus cases – which is at the expense of margin is not published every year in conjunction necessarily a good thing and can with international market research mask whether a brand really has a company Euromonitor. franchise or not,” said Davis. Top of the value league are: Brand Finance chief executive, Johnnie Walker, Bacardi, Smirnoff, David Haigh, said: “Our table Chivas Regal, Hennessy, Baileys, shows that whisky has rebounded Absolut, Jack Daniels then two as the world’s favourite tipple.” Double-digit growth for Diageo buys spirits Pernod Ricard company in Turkey ernod Ricard has reported a sales increase of P13% to €4.28 billion in its half-year results. The group’s financial statement, which iageo has struck an agreement to acquire Europe and will continue to operate under the current pertained to business from July 1-December 31 Turkey’s “leading” spirits company, Mey Içki. management team. 2010, also revealed that 7% of sales growth was D According to Diageo the producer and The acquisition will be funded through existing organic. distributor, which is valued at £1.3 billion, is the cash resources and debt and is expected to be Pernod’s 14 strategic spirits and champagne market’s leader in raki – the biggest spirit category in completed in the second half of 2011, subject to brands grew 8% by volume and 13% by value. Turkey – and has a “leading position in vodka”. regulatory clearances. Martel, Perrier Jouët, Royal Salute, Chivas Regal, In the financial year ended December 31 2010 the Walsh added: “The acquisition meets our return Jameson, Ballantine’s, The Glenlivet and Havana company recorded net sales of £300 million and criterion and delivers topline growth above the Diageo Club all enjoyed double-digit growth. earnings before interest and taxes of £120m. average, and margin expansion.” The company’s four priority wine brands Paul Walsh, chief executive of Diageo, said: “The Diageo describes Turkey as a fast-growing economy posted volume and sales growth of 3% – the first acquisition of Mey Içki transforms our existing with consumer spending forecast to be twice the rate return to volume growth since the first half of position in this fast-growing spirits market. of GDP growth. 2007/8. “It gives us leading brands in the major local spirits Paul Walsh added: “This investment represents Pernod also revealed that advertising and categories, a superior distribution network and a the continuation of our strategy to increase Diageo’s promotion spend for the half year was up 11% to proven management team.” presence in those emerging markets, such as China and €765 million. Mey Içki will be consolidated as part of Diageo Vietnam, which have a rapidly growing middle class.” Chivas Regal and Nemiroff has reported Brown-Forman has The Supreme court of Vivienne Westwood have strong growth in 2010. launched a Canadian ‘maple Spain has ruled in favour News collaborated to launch a The Ukrainian vodka brand wood’ whisky in Florida, of Pernod ricard and the whisky. The blend of more said sales volumes rose to Kentucky, Louisiana and cuban government in the than 20 single malts, priced $473.6 million – $56.8m Texas. Collingwood – which havana club trademark In Brief US$495, has been limited to (13.6%) up on the previous is 40% abv, priced at $26.99 dispute with Bacardi. 2,500 bottles. Its launch will year. The company said the and available in 75cl bottles Bacardi has claimed its coincide with the designer’s largest growth areas were – is packaged in a flask- challenge over the Spanish Industry stories from autumn/winter 2011 Red Ukraine and Poland. shaped bottle. rights to the name was around the globe Label show in London. rejected “on a technicality”. march 2011 DRINKSINT.COM DRINKS INTERNATIONAL 5 News Foster’s in aU$151m wine estate demerger oster’s Group has announced a proposal independent capital structures and financial to demerge Treasury Wine Estates at a policies, greater flexibility, increased transparency Fcost of AU$151 million. and improved investment choice for shareholders. The move, which is subject to shareholder Foster’s chief executive Ian Johnston said: “We Diageo has further bolstered its duty free presence approval in April and the Supreme Court of expect this will lead to improved performance by with a new retail unit in partnership with Qatar Duty Victoria, will see the creation of two listed the businesses over time.” Free (above). entities – Treasury Wine Estates and Foster’s Eligible shareholders will retain their existing The open-fronted, golf-themed “experiential unit” Group. Foster’s shares and receive one Treasury Wine benefits from the passenger traffic using the 7/8 According to Foster’s the scheme – which will Estates share for every three Foster’s shares. international gates on this level and from the nearby see its wine business separated from its beer, cider Crawford added: “The demerger will allow food court. and spirits portfolio – should be complete by Foster’s shareholders to benefit from owning Passengers can try their best swing against a May 2011. Treasury Wine Estates shares and to participate computer-animated screen and the top score wins Foster’s chairman David Crawford said: in any value creation within that business, a trip to Gleneagles in Scotland. Inside the unit, “Foster’s has completed a detailed evaluation including from improved market conditions in brand ambassadors are on hand with educational of the issues, costs and benefits of the demerger the wine category.” iPad applications to engage shoppers with the and the board unanimously considers that the ‘One-off transaction costs’ associated with the story around the Johnnie Walker family and to demerger represents the best path forward and is demerger of approximately AU$151m (pre-tax) answer questions about the brand, while offering in the best interests of Foster’s shareholders.” will be incurred by Foster’s. direct retail. As part of the structural separation, The pre-tax cost includes transfer costs and In February Diageo GTmE celebrated the opening independent boards and managements will be advisory fees of AU$66m, foreign exchange of a Bahamian bar aimed at cruise ship travellers.