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Beer, Spirits, & Wine – Packaged Imports Continue Growth, But Recent Trends Decelerating

On Friday, September 2nd, import and export data for beverage alcohol was made available through July 2016. Top line results are as follows:

Beer:

Imported beer increased +7.6% by volume and +10.0% by value over the last twelve months. Over the last three months imports are up +7.5% by volume and up +7.6% by value. 65.3% of imports by volume come from Mexico.

Exported beer increased +17.2% by volume and +10.4% by value over the last twelve months. The last three months have seen some softness with declines of -1.6% by volume and -6.0% by value. 39.4% of exported beer goes to Mexico.  

Overall beer imports by volume are 6.6 times the size of beer exports.

Spirits:

Imported packaged spirits for the last twelve months are up +4.0% by volume and +3.4% by value.  Volume trends have softened over the past three months, up only +0.3%, but value has strengthened +5.0%.  Imported bulk spirits are not as healthy.  Over the past twelve months, volume is down -3.5% and value is down -6.1%.  These trends have declined further over the past three months with volume down -9.8% and value down -19.8%.  Tequila represents 13.8% of all imported packaged spirits while whiskeys (from all sources) represent 31.1% of all imported bulk spirits.

Exported packaged spirits for the past twelve months are down -1.8% by volume and -6.1% by value.  Volume trends have worsened over the past three months with volume down -5.4% and value -13.3%.  Exported bulk spirits for the last twelve months are up +10.8% by volume but only +1.6% by value.  Over the past three months volume trends have accelerated, up +14.3%, but value has declined, down -10.8%.  The United Kingdom represents 11.1% of all exported packaged spirits while 24.0% of all exported bulk spirits is destined for Canada.

Wine:

Imported packaged wine is up +4.4% by volume and +2.9% by value over the past twelve months. This growth has decelerated over the past three months with volume down -3.0% and value -2.8%. Imported bulk wines for the last twelve months are down -1.4% by volume but up +0.4% by value.  This too has significantly decelerated over the past three months with volume down -9.5% and value -11.9%.  Imported packaged wine from Italy represents 35% of all packaged imports by volume while imported bulk wine from Chile represent 32.5% of all bulk imports by volume.

Exported packaged wine for the last twelve months is down -10.4% by volume and -3.3% by value.  Over the past three months trends have decelerated with volume down -27.6% but value only down -1.9%.  Exported bulk wine for the past twelve months is down -4.2% by volume and -7.4% by value.  These trends have also decelerated over the past three months with volume down -10.3% and value -11.2%.  Canada represents 31.5% of all exported packaged wine and the United Kingdom represents 38.1% of all exported bulk wine.

To be able to track Beverage Alcohol imports and exports on a monthly basis for volume, value in USD, and value in local currency for all major trading countries, please see the bw166 Import and Export reports for Beer, Spirits, and Wine.

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Total Beverage Alcohol Spending Continues Growth: +4.0% through July 2016

For twelve months ending July, the bw166 Total Beverage Alcohol Overview shows total consumer spending on beverage alcohol at $229.8 billion, an increase of 4.0% and an acceleration of the growth from June. The bw166 Total Beverage Alcohol Index, the standard in measuring overall consumption, stands at 119.8, a 1.9% increase over the prior twelve months.

Beer volumes entering the market are up 1.50% over twelve months and are up 1.4% over three months.  This is a material improvement compared to the twelve month results through June.

Wine volumes (including Cider which is not materially impacting trends) entering the market are up 4.6% over twelve months and up 4.4% over three months. This is consistent with results through June.

Spirits volumes entering the market are up 2.3% over twelve months and 2.5% over three months. This is consistent with results through June.

The bw166 Total Beverage Alcohol Overview Report tracks all tax paid shipments into the US market including domestic products, packaged imports and bulk imports.  The reports also track total consumer spending on beverage alcohol in both the on and off premise channels. Subscribe now to receive the most complete view of the total beverage alcohol market.

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Beer, Spirits, & Wine – Packaged Imports Growing, Bulk Declining

On Friday, August 5th import and export data for beverage alcohol was made available through June 2016. Top line results are as follows:

Beer:
Imported beer increased +6.3% by volume and +9.3% by value over the last twelve months and has accelerated over the last three month to up +8.7% by volume and up +9.9% by value. 63% of imports by volume come from Mexico.

Exported beer increased +20.8% by volume and up +13.0% by value over the last twelve months; while the last three months have experienced slight deceleration with +13.5% by volume and +5.9% by value. 40% of exported beer goes to Mexico.

Overall beer imports by volume are 6 times the size of beer exports.

Spirits:
Imported packaged spirits for the last twelve months are up +6.0% by volume and up +2.9% by value.  This is consistent with trends over the past three months where volume is up +6.2% and value up +5.5%.  Imported bulk spirits are not as healthy.  Over the past twelve months, volume is down -4.6% and value is down -3.2%.  These trends have declined further over the past three months with volume down -14.6% and value down -9.7%.  Tequila represents 13.6% of all imported packaged spirits while whiskeys (from all sources) represent 31.9% of all imported bulk spirits.

Exported packaged spirits for the past twelve months are down -1.2% by volume and down -5.7% by value.  Volume trends are similar over the past three months with volume down -1.2% but value  down -13.8%.  Exported bulk spirits for the last twelve months are up +12.6% by volume and up +3.5% by value.  Over the past three months, volume trends have accelerated, up +14.7%, but value has declined, down -9.1%.  The United Kingdom represents 12.2% of all exported packaged spirits while Canada is the destination for 28.4% of all exported bulk spirits.

Wine:
Imported packaged wine is up +6.3% by volume and up +3.8% by value over the past twelve months.  However, this growth has decelerated over the past three months with volume up +1.3% and value up +1.1%. Imported bulk wines for the last twelve months are down -2.0% by volume but up +0.7% by value.  This too has significantly decelerated over the past three months with volume down -32.5% and value down -25.5%.  Imported packaged wine from Italy represents 35% of all packaged imports by volume while Imported bulk wine from Chile represent 31% of all bulk imports by volume.

Exported packaged wine for the last twelve months are down -4.8% by volume but up +2.8% by value.  Over the past three months trends have decelerated with volume down -28.7% and value down -3.7%.  Exported bulk wine for the past twelve months are down -3.9% by volume and down -7.5% by value.  These trends have also decelerated over the past three months with volume down -23.6% and value down -22.5%.  Canada represents 31% of all exported packaged wine and the United Kingdom represents 37% of all exported bulk wine.

Interesting Facts:
For 12 months ending June 2016.  Imported beer from Denmark is up 57% by volume though represent only 0.2% of all imported beer.  Imported packaged wine from Canada is up 83% by volume to 2.2 million cases, entirely driven by Sangria, Coolers and other similar wine types at relatively low prices.  Imported packaged spirits from Japan are up 116% by volume, but still only represent 0.2% of all imported packaged spirits.

To be able to track Beverage Alcohol imports and exports on a monthly basis for volume, value in USD, and value in local currency for all major trading countries, please see the bw166 Import and Export reports for Beer, Spirits, and Wine.

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Beverage Alcohol Spending Up 3.4%

For 12 months ending June 30th 2016 the bw166 Total Beverage Alcohol Overview shows total consumer spending on Beverage Alcohol at just over $222 Billion, an increase of 3.4% versus the prior 12 months. The bw166 Total Beverage Alcohol Index stands at 119.04, a 1.5% increase over the prior 12 months.

Overall Beer volumes entering the market are up .23% over twelve months and are up .24% over three months.

Wine volumes entering the market are up 4.4% over twelve months and are up 4.5% over three months.  Note Wine trends include Cider but it is not materially impacting the trends.

Spirits volumes entering the market are up 2.0% over twelve months and 2.7% over three months.

bw166 reports track all tax paid shipments into the US market including Domestic Products, Packaged Imports and Bulk Imports.  The reports also track total consumer spending on Beverage Alcohol in both the on and off premise channels.  This is the most complete view of the Total Beverage Alcohol market on a consistent basis.

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Brexit and Total Beverage Alcohol – A Quick Primer

After the United Kingdom voted on Thursday to exit the European Union, there has been considerable commentary on the long term economic implications for the global economy including the total beverage alcohol industry. Ultimately, for the beverage alcohol industry, Brexit’s largest effect is likely to be foreign exchange (FX) rate fluctuations in both the near and long term.

Since the vote to leave the European Union, the GBP has dropped in value against the US Dollar (USD). Conversely, the Euro to USD exchange rate has remained relatively stable over the past 18 months. While the majority of trading is speculative, it appears unlikely that the GBP/USD rates will revert to historical norms in the near term.

Presuming these rates signal a new normal, there are some general assumptions that can be made relevant to the beverage alcohol industry:

  1. Overall exports from the UK to the US will be more profitable for UK-based exporters.
    • Scotch Whisky is the biggest potential beneficiary. However, many of the major Scotch brands are owned by international corporations and these companies will protect brand positioning so it is unlikely that pricing will be reduced to gain market share. That said, incremental margin may be used for marketing spend to drive greater consumer awareness.
    • The UK is not a major exporter of Wine or Beer into the US so there are likely to be minimal impacts related to exchange rate fluctuations.
  2. The UK is a major importer of beverage alcohol and a weakening GBP against the local currencies of most major producing countries will make the UK a much less profitable market
    • For US based producers, this means that either prices will necessarily increase in the UK market, or export margins will be reduced
    • Regarding pricing specifically, the UK market has traditionally been resistant to price increases. However, these FX shifts may make it possible to protect exporter margins over the medium term.
  3. As the potential profitability of the UK export market declines, international producers are likely to look to other markets to achieve growth objectives, including the US.
    • To the extent that the Euro shows on-going weakness against the USD, this will make it possible for Euro-denominated producers to increase more on price relative to US domestic producers.

Overall, for the US Beverage Alcohol market there are two points to be made:

  1. With a strong USD and a weak Euro, it is a good time to buy barrels and equipment from Europe.
  2. With a strong USD and a weak GBP it is a great time for a vacation to the United Kingdom; and, if you plan to make it a sales visit, be prepared for pricing discussions.

To be able to track Beverage Alcohol imports and exports on a monthly basis for volume, value in USD, and value in local currency for all major trading countries, please see the bw166 Import and Export reports for Beer, Wine, and Spirits.