Beverage Dynamics

Beverage Dynamics March-April 2013

Beverage Dynamics is the largest national business magazine devoted exclusively to the needs of off-premise beverage alcohol retailers, from single liquor stores to big box chains, through coverage of the latest trends in wine, beer and spirits.

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EDITOR'S NOTE Business Is Up; Guess Who Might Ruin It? A s I write this in the week preceding the March 1 deadline for the U.S. government "sequester" to kick in, it's looking more and more as if the deep thinkers in Washington have reached a new low in dysfunction. By taking a meat-cleaver approach to cutting $85 billion dollars from the federal budget, analysts say the country is risking throwing at least 750,000 people out of work within the next six months. Since the economy has been rebounding, albeit at a modest pace, this seriously dumb act is certain to slow, if not stop, that progress. It's not only the thousands of defense-sector workers who will lose their jobs or be furloughed for prolonged periods, it's also the hundreds of thousands of workers who keep our civil society functioning, from firefighters, police officers, teachers and sanitation workers, to health and safety inspectors, to name a few. And it's not like these people will just disappear: many will file for unemployment benefits, stretching already troubled state budgets; they will not be paying taxes on the money they are no longer earning, and they will not be purchasing discretionary goods and services with the money they no longer have. Unfortunately, some of those goods will probably be beverage alcohol products. Though our industry was mostly spared during the recent Great Recession, there were disappointing trends, such as the decrease in sales of abovepremium and superpremium products and the increase in sales of largesize, value-priced packages. This could easily happen again, if Congress doesn't come to its senses. Right now, it's looking bleak. On the other hand, as we point out in our Growth Brands cover story (turn to page 25), the wine and spirits industry has been doing quite well, and our 2012 statistical results underline healthy growth in both sales volume and revenues. Total U.S. distilled spirits sales volume in 2012 rose to almost 206 million 9-liter cases, representing a 3.6% gain versus 2011. And overall spirits retail revenue growth (the combined dollar total of off- and on-premise sales) also increased, by a hefty 5.4% to $72.12 billion, an almost $3.7 billion jump over 2011. This result underlines the fact that a significant part of the increase is produced by more sales activity at the premium and above-premium price segments. The same holds true in the wine segment. Total U.S. wine sales volume increased by 2.7% in 2012, to approximately 320.8 million 9-liter cases, the nineteenth consecutive year of wine sales volume increases, according to Specialty Information Media research. Similar to spirits, the move toward high-end purchases continued in the wine segment, evidenced by the segment's 3.9% revenue increase in 2012 to $28.9 billion. These positive trends can certainly continue, but we need our elected officials to see the light. Let's all hope they do. Richard Brandes, Editor-in-Chief 6 • Beverage Dynamics • www.beveragedynamics.com • March/April 2013 Executive Vice President and Group Publisher Charles Forman Tel: 845-426-6072 Fax: 845-426-6423 email: cforman@m2media360.com Editor-in-Chief Richard Brandes Tel: 212-353-3832 Fax: 212-353-8214 email: rbrandes@m2media360.com Managing Editor Jeremy Nedelka Contributing Editors Dan Berger Harriet Lembeck F. Paul Pacult Robert Plotkin Michael Sherer Cheryl Ursin Vice President of Sales, Associate Publisher Anthony Bongiovanni tbongiovanni@m2media360.com Senior Regional Sales Manager Mark Marcon mmarcon@m2media360.com Senior Regional Sales Manager Debbie Rittenberg drittenberg@m2media360.com Art Director Adam Lane Senior Research Analyst Adam Rogers List Rental Manager Cheryl Naughton R E TA I L E R E D I T O R I A L A D V I S O R Y B O A R D Charles Bailes III ABC Fine Wine & Spirits, Orlando, FL Ralph Bondon Berbiglia's, Kansas City, MO David Breitstein Duke of Bourbon, Canoga Park, CA Jim Shpall Hal Gershman Applejack Liquors, Wheat Ridge, CO Ron Junge Ted Farrell Burt Notarius Charles Sonnenberg Brown Derby Stores, Springfield, MO Happy Harry's Bottle Shop, Grand Forks, ND Haskell's, Minneapolis, MN Premier Liquors, Kemmore, NY Frugal MacDoogal's, Nashville, TN Beverage Dynamics is published by Specialty Information Media Editorial and executive offices at 17 High St., 2nd Fl., Norwalk, CT 06851 Telephone: (203) 855-8499 Fax: (203) 855-9446 E-mail: rbrandes@m2media360.com

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