Alongside our daily news coverage, features and interviews, the Just Drinks team again rounds up the week‘s top stories with a series of data snapshots.
This week, we had an exclusive interview with Stock Spirits Group CEO Jean-Christophe Coutures, who reflected on an active 12 months on the M&A front for the distiller and looked ahead to its plans for the next year and more.
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“There’s willingness from consumers to go back to trustworthy brands,” Coutures told us, insisting there is “dynamism” in mainstream spirits, the central plank of Stock Spirits‘ growth strategy.
The Poland-based plans to spend 2024 bedding in its new assets, which include Sierra Tequila, a brand it is looking to expand into more European markets.
Elsewhere, we saw Coca-Cola Europacific Partners end a long-running deal to distribute Rekorderlig cider in Australia, a country where cider sales are forecast to come under pressure.
In Norway, the country’s official stats organisation published the latest figures for annual alcohol sales and, in the UK, soft-drinks major AG Barr announced plans to overhaul parts of its local distribution network, a move that will affect more than 100 jobs. The Irn-Bru maker is set to report annual revenues of around £400m ($510m) later this month.
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By GlobalDataFrom a low base, Tequila set to toast growth in Europe in 2020s
With growth in North America still healthy but slowing, the world‘s Tequila brands should be eyeing markets further afield.
The category remains in its infancy outside North America but distillers believe markets such as Europe hold potential. The number of Tequila brands launching in the UK, for example, continues to catch the eye but the development of the market on this side of the pond is unlikely to be smooth.
As our spirits commentator Richard Woodard wrote last month, we’ve already seen category volumes dip in the UK as perceptions gradually shift from cheap shots and slammers to something more sophisticated and centred on cocktails and sipping.
Nevertheless, one spirits major with a firm belief in the outlook for Tequila in Europe is Stock Spirits Group, which bought the Sierra Tequila brand last year and is looking to open up more markets in the region in 2024.
Forecasts from GlobalData, Just Drinks’ parent, suggest the market for Tequila and mezcal is set for solid growth in Europe up to 2028 (Tequila being a far bigger piece of the pie than mezcal, of course).
“With Sierra, a leg of the strategy [is] to introduce the brand in new geographies, in particular in central Europe where we have a very strong route to market,” Coutures said this week. “The Tequila category has been extremely dynamic. It’s been the fastest-growing spirit category over the last five years. A lot of that growth came from North America and the US market in particular thanks to the 100% agave product.
“At the same time in Europe… the Tequila category has been growing but from a slow base… The Tequila category in Europe, we think… will be one of the next booming categories in the years to come, we really believe in the growth of the [segment] in the coming five to ten years, and we want Sierra to play a key role as being a gate opener for that category to new consumers.”
You can read more of the wide-ranging interview here and hear more about Stock Spirits’ move into non-alcoholic spirits here.
Cider forecast to sour in Australia
Coca-Cola Europacific Partners this week announced it is ending its sales and distribution contract with AB Abro Bryggeri for the Swedish group’s Rekorderlig cider brand in Australia.
CCEP has been the distribution partner in Australia for the Rekorderlig cider brand for the last nine years. The brand is available in on-premises and stores including Dan Murphy’s, First Choice, BWS and Liquorland.
“As the CCEP organisation continues to align as a bottler of our brand partner, The Coca-Cola Co., re-aligning Rekorderlig cider to a distributor with similar future ambitions in the cider category will enable brand owner AB Abro Bryggeri to best maximise its future growth ambitions for Rekorderlig in Australia,” Tobias Hoogewerff, VP for licensed sales at CCEP in Australia, said.
CCEP and Abro are “working” on the transition of the Rekorderlig cider brand to a different distributor by 1 July.
CCEP announced three years ago it would stop producing, selling and distributing beer and cider products in the Australian market to focus on its RTD and spirits portfolio.
And with forecasts that the country’s cider market is set to see sales slide in the years ahead, perhaps it is no surprise the Coca-Cola bottler is exiting that side of the sector.
Alcohol sales slide in Norway
Beer, wine and spirits sales fell in volume terms in Norway in 2023 compared to the previous year, reaching the lowest figures since 2019, it was announced this week.
Beverage alcohol sales stood at 392 million litres last year, down 2.4% on 2022, according to data from Statistics Norway.
Spirits volumes declined 5.6% to 12.5 million litres. The amount of beer sold decreased 3% to 263.1 million litres. The data showed there were 89.6 million litres of wine sold in Norway in 2023, down 1.9%.
However, soft drinks volumes rose 2.8% to 27m litres.
“If you compare the figures back in time, you have to go all the way back to 2019 to find lower figures in total commodity turnover,” said Lena Weitzenbürger Haarr from Statistics Norway.
The statistics include all alcoholic beverages declared for duty by manufacturers and importers during a quarter.
Job cuts at AG Barr in offing – as are higher revenues and profits
Irn Bru manufacturer AG Barr this week set out plans to change part of its distribution network in the UK, a move that will affect 160 roles.
The UK-based soft-drinks group wants to shake up how it delivers to local symbol and independent retailers.
The group’s plans, which it said are subject to consultation, could result in the closure of its direct operations in Manchester, Wednesbury and Dagenham.
Meanwhile, AG Barr plans “to fully integrate” its Boost Drinks subsidiary into its Barr Soft Drinks division to eliminate “duplicated activities”.
The group bought UK company Boost Drinks in 2022. The proposed changes would affect 35 staff and lead to the closure of an office in Leeds.
The company, which also owns brands including Funkin cocktails, is set to report its annual financial results on 26 March. In a trading update issued last month, AG Barr said its revenue in the year to 28 January grew by around 26% and by 7.6% on a like-for-like basis.
Adjusted profit before tax is expected to be around £49.5m, up 13.8% on the prior year.
Former Coca-Cola and Mars executive Euan Sutherland is set to take the helm at AG Barr in May, succeeding Roger White, who has been chief executive at the Funkin cocktails owner for 20 years.
