Thursday, May 24, 2007

Industry News as reported by Wine & Spirits Daily

HOT NEW TRENDS IN WINE AND SPIRITS. Hispanics, baby-boomers and catchy new products are the way to drive new growth in today's market, according to NABCA's "Hot Trends" panel. Kaumil Gajrawala of UBS, Bump Williams of IRI and Anthony von Mandl of Mike's Hard Lemonade shared their insight on how to make (more) money in this industry. Let's take a look. SUPPLIERS IGNORE BABY BOOMERS. "We expect this trend (wine and spirits share growth) to continue but at a declining rate." If this is true, what can wine and spirits do to continue driving trends? The baby-boomer demographic has been ignored by suppliers, says Kaumil, which could really end up hurting them in the future. In the next ten years, the over-50 age group will increase 22 million. This is huge considering boomers have more retirement wealth than any generation in history. So, what do they like? Wine companies benefit the most from the boomer segment, said Kaumil, because they are attracted to its healthy image. They also like simple, low-alcohol content beverages, which Kaumil reasoned would be perfect for Smirnoff Source. "The income of affluent US household is growing faster than other segments due to high salaries of well educated workers, more two-big-paycheck families, and favorable tax policies." Another group to watch out for is the baby- boomer's children, otherwise known as millennials (roughly 21- 29 demographic.) According to Kaumil, beer is extremely focused on this group who value variety, the image of sophistication, a connection to the product and premiumization. The kicker, though, lies in the Hispanic demographic which is set to double in next 20 years. Kaumil says that they're wealthier and migrating all across the nation, not just South Texas or California. Hispanics are the youngest of all ethnic groups (average age is 28) and most brand loyal. Hispanics want companies to market with them, not to them, and are attracted to flavored products, said Kaumil. High-end will also continue to grow.

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