2008 - That's a wrap

Well, that's that for another year. And what a year it's been for us here on just-drinks. We've had an amazing 12 months, travelling the world and meeting the great and the good of the global drinks industry, while making many new friends (I mean, contacts) on the way.

Both Chris Mercer (our deputy editor) and I would like to thank all of you for your continued support in 2008, without which we wouldn't be here. It's been an absolute blast, and we both can't wait for 2009 - whatever it may bring for our industry.

just-drinks is taking a bit of a break now, closing for business at end of play today (23 December), but we'll be back, refreshed, raring to go and at least a few pounds heavier on Friday 2 January.

Happy holidays to you, dear reader. We'll raise a glass or 40 to you over the next few days.

Cheers.

2008: How was it for you?

Those eagle-eyed readers among you may have noticed that we have begun publishing reviews of the year for different sectors of the industry.

We began with beer yesterday, and moved on to spirits today, charting the major events of the last 12 months and examining how they have shaped the industry for the future. Next week comes the turn of wine and soft drinks. 

Naturally, our insightful comments on the year's events don't come for free. You have to be a member to gain access. Click here to sign up. 

Feel free to send in your most memorable drinks-related event of 2008. You can contact us at news@just-drinks.com.

Christmas comes early for Coca-Cola, PepsiCo

This week's clearance for natural sweeteners derived from the stevia plant could prove to be a watershed moment for soft drinks.

The US Food and Drug Administration has cleared both Coca-Cola Co and PepsiCo to use their different versions of the sweetener.

Soft drinks firms are salivating over stevia and it's not hard to see why.

There is the soft drinks industry, battered from all sides over obesity and artificial additives, and then along comes a new sweetener that not only contains zero calories but can also be described as a "natural" ingredient.

It's early days, of course, but stevia is going to be one to watch. Development is theoretically open to all because there can be no patent on stevia itself, only particular sweeteners derived from it.

Next stop will be the EU, which is still deliberating.

The end of the phoney recession

Job losses are mounting in the drinks industry.

This week in the UK alone, Coca-Cola GB, Scottish & Newcastle (Heineken) and Constellation Europe have all announced that they plan to shed staff. A-B InBev is likely to follow, once a review of its UK operations is complete.

There will be more. Indeed, the UK wine industry is struggling to stay afloat, amid the tidal waves of duty rises and discounting. Over in beer, sales have slumped and an average five pubs are closing every day. 

UK unemployment is expected to rise sharply next year, negating a boost to spending power by the recent cuts to value added tax and interest rates.

The US is hardly faring much better, if not worse. A-B InBev is shedding 1,400 jobs, mostly from A-B's St Louis headquarters, while thousands of employees connected to the soft drinks industry are also staring redundancy squarely in the face.

The phoney recession is receding, propelling forward the grim reality that 2009 is, afterall, going to be painful for many.

Mince pie anyone?

My debt is my bond

The credit crunch has started to play second fiddle to the frontline battle against falling consumer sales and rising unemployment on the world's financial pages of late, as the economic gloom spreads from the finance sector to broader consumer industries.

But, startling figures I saw today on the BBC website suggest that the ability of (or should I say failure of) businesses to be able to negotiate funding from their banks will bring the credit crisis storming to the front of the agenda once more.

The figures, reported by Robert Peston, the BBC's business editor, are from the Bank of England's quarterly bulletin and show that, in 2009, there will be a massive bulge in the value of bonds issued by European companies that have to be repaid.

Peston says that close to US$1000bn of what he terms "old world" companies' borrowings in the form of tradable debt has to be paid back during the next 12 months - with something like $800bn of this owed by financial companies and $200bn by non-financial companies.

"That would be a colossal sum to pay off at the best of times, and is equal to about five times what's been repaid in 2008. It is a disturbingly huge amount, at a time when even the bluest-of-blue-chip companies are finding it difficult and expensive to raise money by selling new corporate bonds," he says.

There is of course plenty of talk about government bail-outs already for car and steel manufactures, but the prospect of these safety nets being extended to other more unexpected industries is rising.

Lunch wars: Pernod v Diageo

Pernod Ricard and Diageo's battle to rule the world of alcoholic drinks came to London last week as both competed for the hearts of that fickle individual - the drinks journalist.

We dragged our cavernous stomachs down to the Pernod UK and Diageo Great Britain annual festive lunches, so we thought it only fair to produce a brief scoring card on both. 

The Food: A promising start from Pernod, followed by solid mains from both, but stolen at the last by Diageo with a decadent dessert consisting of profiteroles, chocolate sauce, sorbet and chocolate-encased cream on some kind of brandy snap base. 1-0 to Diageo.

The Place: Tough call. Pernod's had a certain '60s retro charm, and they'd booked it for longer. Diageo's was more grand, and easier to get to for us public-transported paupers. A draw.

The Goodie Bag: Yes, I know it's a small thing. But, receiving a few goodies in a Samsonite laptop-rucksack from Pernod proved far more amenable on the trip home/to the pub, compared to the Diageo carry bags, which broke (granted, under the weight of bottles). Diageo's subsequent excuse of: "It's because of all the presents, we're far too nice to you lot", doesn't wash I'm afraid. Pernod equalises, 1-1.

The Verdict: Obviously, we're perched firmly on the fence. There has been some deliberation, however,over whether Diageo's late offer of a Rumple Minze should be a bonus or minus point. For the ignorant few out there, 'the Minze' is a clear, mint-flavoured schnapps effort, and reputedly consumed somewhere in Germany. It also emits fumes powerful enough to solve the world energy crisis.

Downturn to give Cognac a breather?

Cognac has spent the last couple of years running to catch its tail, hardly able to turn the stuff out fast enough for its growing collective of consumers, from hip-hop stars to China's nouveau riche.

Could it be that the economic downturn will give Cognac a little space to breathe?

It's an unconventional idea, but one that holds some water for Courvoisier president and master distiller Jean-Marc Olivier.

Speaking to him at last week's party for the Courvoisier Future 500 club, he said that a serious global downturn could never be described as a good thing for Cognac. But, he said some parts of the industry may benefit from a slackening of demand.

Cyril Camus, CEO of Camus, another of the region's five biggest producers, said a year ago that continued rapid growth for Cognac would lead to shortages in the near future.

A slight drop in sales may, therefore, help to replenish stocks. Every cloud...  

Doing a Stella...

You know you're in a bad place when your name becomes the central facet of a derisory catchphrase.

And so it is with Stella Artois in the UK. The brand has already had to contend with the nickname "wife beater", but the lager's decline in popularity in recent years appears to have given rise to the notion of "doing a Stella".

In short, no one wants to "do a Stella", according to the major brewer that introduced the phrase to just-drinks.

It said that imported beers in the UK need to guard against an erosion of their image and premium identity, referring to Stella as an example of how things can go pear-shaped.

Still, at least InBev UK is trying to get things back on track. Earlier this week, the unit said that it has narrowed its lager offering in the UK, dropping Eiken Artois and Peeterman Artois, "in order to focus support and investment" on its flagship Stella Artois brand. It also says Stella 4% is bigger in the off-trade than Heineken. 

How unsporting of InBev to try and spoil everyone's fun.

Beware the fickle world of celebrity

Diageo, a company that most people cannot pronounce correctly, has won a major popularity contest among its UK business peers.

The drinks giant has leapfrogged stricken banks and brow-beaten retailers to become the UK's "most admired company", a prize bestowed on it by the high and mighty of the country's business sector.

Fittingly, the news comes two days before the entire UK alcoholic drinks industry anticipates a rollicking by ministers over its record on promoting responsible consumption. That's how it goes.

In fact, Diageo's proactive approach to this issue, together with solid sales and profit growth in recent years, are probably what helped it to take the prize. 

Diageo's solid business model has helped it to shine in a world littered with economic pitfalls for previous high flyers.

Clearly the business world believes Diageo to be more "recession-proof" than most.

Most people have no idea what Diageo is, but, chances are, they do know Guinness, Johnnie Walker and Smirnoff. And, chances are, people will still want a drink during the recession - more so, some might say.

Analyst group Bernstein today described Diageo as "very much a safe haven", even in its own sector.

It warned of "gathering storm clouds", however, adding that the group was "over-exposed" to three of Europe's worst hit economies - UK, Ireland and Spain. So, above the adoration, there is still hard work to do, and there will be no prizes for slipping up.

UK drinkers forever blowing bubbles

Oh, how I remember how Sunday mornings used to be. Waking up at around midday, with a throbbing head, slightly blurred vision, a mouth that tasted like a cat had slept in it... and some sort of random paraphernalia in the room that had me asking: How did THAT get here?

Yep, Saturday nights were always a drink-filled slice of fun when I was in my 20s.

For drinkers in the north of England, it seems, that slice of fun may lead to them finding bubble blowers by their beds come Sunday morning.

A report in yesterday's (30 November) Observer has said that police in Bolton, Lancashire, are launching a scheme next month where they will hand out free toys to young drinkers as they exit bars and clubs in the city, the idea being that drinkers trying to blow bubbles will be drinkers otherwise pre-occupied from picking fights.

This appears to be from the same school of thought that has seen Manchester police distribute lollipops to stop people shouting in the streets after they've had a skin-full, and seen female drinkers in Devon receive flip-flops to stop them falling in the gutter.

Beats finding a traffic cone in your bed, doesn't it?

just-drinks in India, take two

Another week, another trip to India. just-drinks has just returned from a three-day jaunt to Delhi and Jaipur, courtesy of SABMiller.

Given the events in Mumbai on Wednesday night, it was not the best time to be a westerner staying in India's poshest hotels. The attacks on Mumbai, which as I write have claimed a reported 130 lives and left more than 300 injured, make the world of drinks journalism seem relatively trivial.

On a business level, of course, talk has centred on whether the attacks can harm investor confidence in the country. The Bombai Stock Exchange was closed yesterday (27 November) but held up well upon re-opening today (28 November).

This week's trip was a bit of a whirlwind tour, taking in Delhi, Jaipur, rural areas of Rajasthan and also an 'ethnic village' theme park, which included elephants, camels, traditional bread making and screeching puppet shows.  

Much of India appears to be synonymous with organised chaos. Things seem to work, though it is not often obvious to the foreign eye as to how.  

Beer drinking is on the rise but remains a minority sport in the country. Bars are minimal, and vary from low-end types, such as the gloomily lit yet brilliantly named 'Yes Boss' bar in Jaipur, to the swanky, disco light experience that is 'F Bar' in Delhi.

Beer is also pricey for the masses. A day's work on the minimum wage in Rajasthan would hand you INR100 (US$2), still not enough to buy one bottle of standard beer.

Dr Pepper v Guns n' Roses - Welcome to the (legal) jungle

When does 'a bit of PR fun' become more hassle than it's worth? Well, you could always ask Dr Pepper Snapple Group.

The company is currently at the business end of a legal complaint from the lawyers of rock group Guns n' Roses. In March, you may recall, DPSG promised consumers in the US a can of Dr Pepper each if the rock group came good on the planned release of new album 'Chinese Democracy' this year. Recording initially began on the album in 1994.

At the time, G n' R's main man, Axl Rose, said he was "surprised and very happy to have the support of Dr Pepper".

'Chinese Democracy' hit record shops earlier this month and, dutiful to the last, DPSG honoured its promise, even extending the window for consumers to apply for their free can by an extra 18 hours, as well as opening a toll-free number.

But, in a letter to DPSG earlier this week, lawyers for the rock band said the company had "clumsily implemented" the redemption set-up, and "'ruined' the day of 'Chinese Democracy's' release" for many fans.

What had begun as a "fun giveaway", as a DPSG spokesperson told press this week, now looks a bit too much like hard work to me.

No publicity is bad publicity, though, I guess.

The economy - how bad is it? Ask the Russians

Just how murky is the economic gloom enveloping us all? You only have to ask the Russians.

I read an interesting piece from Reuters yesterday, which claimed that Russian drinkers are veering away from vodka in an attempt to save money, resulting in a glut of the drink in the country's supply chain. "People are having to save money, including on drinks, and this is connected to the impact of the financial crisis on people's disposable incomes," Pavel Shapkin, president of the National Alcohol Association, told Reuters.

So, they're drinking less, right? Wrong. The number of deaths from alcohol poisonings in September in the country rose to 1,458, Shapkin added, as consumers look to get their fix from all manner of illicit sources.

Speaking to a senior executive at a vodka company today, I found that the situation in Russia really is as bad as Reuters suggested. "Retailers in Russia are demanding longer credit terms," he told me. "It's sliding up the chain."

You know it's bad when the Russians aren't drinking vodka.

Russian Standard - You have been sampled

Just what has Russian Standard vodka been up to during its recent sampling aboard the Orient Express, we wonder?

The vodka group appears to have developed a new approach to interactive marketing, according to a press release in to the just-drinks broom cupboard this morning. 

"More than 100 passengers were sampled in total," it says.

They also got free Russian Standard vodka, cocktails and dinner.   

IndSpirit - Day Two. "I blame the Government."

It's day two of the IndSpirit conference here in Mumbai, and the spotlight has switched from spirits to beer and wine.

The majority of us appear pretty clear-headed this morning following last night's event - an awards ceremony in the grounds of our hotel, at which yours truly was requested to hand out some awards. As well as the presentation ceremony for the winners of an online vote in the run-up to IndSpirit, we had Bollywood-style dancing, a huge buffet-style dinner and bars run by the likes of Diageo, Pernod Ricard and InBev.

But, to work.

This morning, I gave my presentation on the global beer market, a round-up from which will appear on just-drinks later this week.

During the morning's look at beer, I learnt that the per capita consumption of beer in India stands at a paltry one litre, which still towers over wine consumption, which we heard this afternoon has hit 10ml per capita.

Both the beer and wine industries echoed the sentiments from yesterday's spirits presentations, with all three sectors calling - nay, screaming - for some sort of uniformity from the authorities in India's 28 states. Present at all three sessions were two state excise commissioners. Credit to them for turning up, never mind taking questions, but I'm in total agreement with Gavin Hewitt, the chief executive of the SWA, who yesterday described the regulatory climate for alcoholic drinks in India as being "Byzantine".

It's a mess and, although there was lots of talk, this frustration looks like being with us for quite some time. Those low per capita consumptions may be on the rise, but nowhere near as fast as they should be.

As is usually the case, you can blame the authorities, in part, for that.

India - While we're on the subject...

... just-drinks is in India!

Having arrived in Mumbai/Bombay this morning, I'm trying to acclimatise both weather (30 degrees)- and time(five-and-a-half hours ahead)-wise, ahead of the IndSpirit conference, which starts here tomorrow.

Not only will I be reporting to you from the two-day event, but on Saturday I'll actually be talking to delegates about the global beer market and the consolidation trend of recent years.

If you have any questions you'd like me to put to the great and the good of the Indian alcobev industry, then drop me a line at news@just-drinks.com. I'm also staying on for two days to play tourist in Mumbai, so if you have any visit recommendations or hints and tips for an Englishman abroad, then let me know the same way, please.

We've a bit of an Indian slant starting on just-drinks today (13 November), with the first of a two-part interview with the head of The UB Group - the country's biggest beer and spirits company - Vijay Mallya.

The interview will be up very, very soon. Once I've tanned my front.

Diageo in India - Still many rivers to cross?

A fascinating meet-up last night in London, when Diageo invited us along to its inaugural press dinner. Present at the bunfight were, among others, CEO Paul Walsh and CFO Nick Rose. I took the opportunity to quiz some of Diageo's top bods about the company's intentions in India, following recent speculation linking Diageo to talks with The UB Group.

The Indian behemoth's chairman, Dr Vijay Mallya, told me earlier this month that the two companies "keep talking about matters of mutual interest".

"They've got a very strong portfolio of brands, I have a very strong route-to-market and so we talk about possibilities of cooperation," he said. "But there's nothing concrete."

What one Diageo exec suggested to me, however, is that, much as UB does have a distribution footprint to crow about in the country, that footprint may not be the kind that would suit Diageo's brands in India. A fair point, with the exception of the Whyte & Mackay brands, UB's portfolio is heavily- - if not solely - geared towards Indian brands. Would an outlet that sells UB's Kingfisher beer brand be the right point-of-sale for Smirnoff?

Whatever, it would appear that Diageo is sitting tight until the long-running saga over excise barriers for foreign spirits brands is resolved. I fear that this matter will need putting to bed before Diageo's attention switches to how it ups its presence in the Indian market.

A night out with Constellation

I was back on the razzle last night - this time as a guest of Constellation Europe at 'A Big Night Out With Fifteen', a charity dinner to raise money for Jamie Oliver's Fifteen project. The Constellation link was the presence of Robert Mondavi wines for all 200 of us throughout the four-course culinary treat.

While at the shindig, I managed to grab five minutes with Constellation Europe's CEO, Troy Christensen. You may remember Christensen's candid comments last month about UK trade in the coming festive build-up. Well, last night he reiterated those concerns but sounded remarkably upbeat about the coming months in the UK. Interesting, seeing as Asda have just started pushing three bottles of wine for GBP10 on UK prime-time TV, while Morrisons are pushing three for GBP9.

What concerns me for Constellation is that the company is dead-set on no longer being a value chaser in the UK, looking to hold prices. It's clear, however, that if the company won't shift on price, there are plenty of others out there who will. And, with the UK consumer starting to turn every penny before he spends it, in which direction do you think that penny's going to go?

An aside, but at the GBP650-per-head dinner last night, a raffle was held to raise money for Fifteen. One of the prizes was to go 'Bowling with Lemar'. Fair reminded me of Alan Partridge's 'Youth Hostelling with Chris Eubank' idea.

Any excuse for a Partridge link.

Cannes - photographic evidence

Further to my blog about Vijay Mallya's party in Cannes earlier this week, this just in. Many thanks to photographer John Paul for sending this through.

My interview with Dr Mallya will be up on the site early next month, so keep your eyes peeled.

TFWA - I Cannes't believe it

Well, warnings that the TFWA World Exhibition in Cannes was "a bit Alice in Wonderland" appear bang on the money after last night's adventure.

Having been ferried out to St Marguerite Island by motorboat for 25 minutes, we were driven deeper into the heart of the island on dirt-track roads, the headlights picking out the woods either side. All very Blair Witch.

Then, after ten minutes, we were dispatched outside the entrance to Vijay Mallya's house - his villa - his private villa - his private villa on an island - the only private villa on the island - the only private villa on the island off the coast of Cannes.

Granted, the toilets on the recently purchased pad - rumoured to have cost Mallya EUR65m (US$81.5m) earlier this summer - smelt of fresh paint, but the location, its surroundings, its cocktails, its Champagne, its food, its pool, its entertainment - all of it really was rather... Alice in Wonderland.

I want to go again, this evening...