2019 Market Update 70

Posted in Beer, Industry, Spirits, Wine.

Anheuser-Busch Chasing Online Beer Sales As Grocery E-Commerce Picks Up Steam

As online grocery sales slowly creep higher, anheuser-busch inbev s.a. is wasting no time getting a foothold in the burgeoning e-commerce beer sector, which is only just starting to come to the attention of shoppers.

Through ab inbev’s bud, -0.12% global growth and innovation group, zx ventures, it is working across north america to “elevate the beer category online,” which only made up less than 1% of the market in the u.s. in 2017.

According to data provided by zx ventures, only 6% of the adult beer-purchasing population has bought beer online in the past. More than a quarter of u.s. consumers (28%) don’t even know you can buy beer online.

One hurdle is the limitations imposed by regulations in the beer and alcohol sector.

“beer is a very traditional industry,” said carolyn brown, head of north american e-commerce for anheuser-busch, who spoke with marketwatch alongside her colleague, david kestenbaum, zx ventures’ global head of e-commerce strategy and capabilities, at the recent shoptalk conference.

“a lot of alcohol laws are post-prohibition and haven’t been updated in a lot of ways,” she said.

Both executives call the move toward online beer sales “consumer-led,” with online grocery, including delivery and click-and-collect, pushing growth forward. Officials are now stepping in to meet the growing demand.

“regulators are coming forward to say this is something we need to address,” said kestenbaum.

An october 2018 report from moody’s puts the online penetration for grocery at less than 2% of the u.s. food retail sales business, “making it one of the least penetrated categories of the u.s. retail industry.”

However, the market is growing. Commonsense robotics calls 2018 “a momentous year for online grocery in the united states,” with major grocers like walmart inc. Wmt, -0.11% kroger co. Kr, -0.77% and target corp. Tgt, -0.12% all ramping up their curbside pickup capabilities.

Walmart said in its most recent earnings release that grocery pickup is available in more than 2,100 locations, and delivery is offered in nearly 800 locations. Walmart u.s.’s e-commerce sales were up 40% in the fourth quarter.

“we continue to make significant investments to build an omnichannel platform that will deliver customers anything, anytime, anywhere,” said kroger chief executive w. Rodney mcmullen on the fourth-quarter earnings call, according to a factset transcript.

“by the end of 2018, 91% of kroger households have access to pickup or delivery. By the end of 2019, with full integration of kroger ship into our ecosystem, we will reach 100% of america.”

For 2018, kroger’s digital sales run rate was about $5 billion.

Commonsense robotics says major retailers poured billions into online grocery in the face of amazon.com inc.’s amzn, +0.15% 2017 acquisition of whole foods market inc.

Don’t miss: can grocers withstand amazon’s onslaught?

“as [online] grocery shopping becomes more ubiquitous we expect online beer shopping to as well,” said the zx ventures blog post.

Zx ventures contributed 10% to anheuser-busch’s 2018 revenue growth, said carlos alves de brito, the company’s chief executive, on the february 28 earnings call.

Another area of focus is the premium beer segment, which is driven by an autonomous business unit within anheuser-busch, high end company, that is responsible for about 30% of the company’s revenue growth.

“in fact, premiumization represents our single biggest opportunity for growth,” said alves de brito.

Anheuser-busch stock has rallied 22.7% for the year to date, though it has tumbled 30% over the past year. The s&p 500 index spx, +0.30% is up 11.6% for 2019 so far.

TTB Consignment Sales Investigations – What Is Behind The Curtain Of The TTB Press Releases?

The recent slew of TTB press releases about consignment sales settlements presents the image of a widely successful initiative, vindicating the $5 million in special funding that congress provided to TTB to address “lawless practices” in the alcohol industry. The TTB trumpets the sheer number of its recent settlements in press releases to justify its increased enforcement activities, but quality over quantity should be the true yardstick of success.

What is behind the curtain of these press release successes?

A review of the offers in compromise and the stipulated suspensions posted on the TTB webpage shows that the TTB has targeted small businesses, family-owned companies spanning generations, and the small importer arm of a german brewery. Not one of the publicly disclosed offers in compromise or stipulated suspensions relates to a major industry member.

The TTB exclusively targeted small businesses without in-house legal staff who must rely on expensive outside counsel arrangements to defend themselves. Some targets have incurred significant legal fees. All have diverted financial resources away from developing their businesses and paying employees.

Many targets preferred to settle the TTB’s claims rather than continue to suffer disruptions in their day-to-day business operations by the constant invasion of TTB investigators, and the growing legal costs of fighting the TTB’s threats of severe penalties. Many targets with low legal defense budgets reasoned that a one-day suspension on a convenient friday (such as the day after thanksgiving day) was an easy give-away; not understanding the collateral consequences of having a record as a violator (at the least) that must be disclosed in detail in every future state license and permit application. The common penalty for deliberate failure to disclose the details of the violation (the forms are under penalty of perjury) is revocation of the license or permit being applied for or renewed.

Against this backdrop, TTB publicity of the consignment sales settlements is disturbing. In full disclosure, our firm represents one of the TTB’s targets in the consignment sales investigations. The small winery suppliers that have taken a stipulated suspension are suppliers to our client, angel share north, a wholesaler in new york that specializes in building markets for small wineries unable to attract attention from the traditional large wholesalers. While we rarely play cases out in the press, as TTB is doing, we received permission from our client to publish this blog so that a light may be shined on these consignment sales investigations. There are simply too many industry members using similar financial arrangements at the importer/producer/wholesaler level to stay quiet.

If the TTB’s goal is to “clean up” the practice of consignment sales in the marketplace, then the TTB must define what is, and is not, a permissible consignment sale. The TTB does not understand that extended payment terms with no right of return of the goods are not consignment sales and, if extended terms are to be defined as consignment sales, to clarify to affected industry members what payment terms are, and are not, acceptable.

Over two years ago, the TTB opened its consignment sales investigation of angel share north. Since then, angel share north has cooperated fully by providing documents and employee interviews. TTB investigators have been quick with questions and slow with answers. As other members of the alcohol industry know, open investigations are disruptive and detrimental to on-going business relationships. Those businesses are worried about “guilt by association” or longstanding business relationships being cut short – creating uncertainty in distribution and marketing. These are marketplace realities that TTB investigators and leaders, few of which have ever worked in a private business, fail to understand or appreciate.

Meanwhile, as the angel share north investigation wilts on the vine, the small business administration’s office of advocacy has examined the impact the TTB is having on small businesses by choosing only to penalize small businesses and not major industry members with similar practices.

Over the last two years, the TTB has targeted angel share north’s suppliers, one-by-one, with allegations of consignment sales violations. These suppliers are small wineries with little access to the wholesale marketplace. The relationship they had with angel share north enabled them to get their wines to local markets not otherwise available to them. Whether those relationships constitute a “consignment sale” as that term is used in the federal alcohol administration act is at the heart of this matter.

Angel share north persistently has asked the TTB to issue an order to show cause against it so angel share north can have its day in court – its opportunity to show that its sales are not unlawful consignment sales. But the TTB delays – stringing angel share north along while continuing to target its smaller, weaker suppliers and business partners for the same alleged conduct. If the TTB has proof of a consignment sale violation by a supplier, then it also should have enough evidence of a consignment sale violation by the wholesaler. The TTB’s position is not consistent or just.

Angel share north has the will, the resources, and the determination to fight the TTB’s allegations about consignment sales whereas the small winery suppliers do not. Holding a consolidated hearing would save time, resources, and money for all parties. More important, a consolidated hearing would serve the ends of justice. Angel share north believes it will prevail and its business models will not be held to be consignment sales as contemplated under the faa act. The TTB will then face the question of how to make whole the small wineries it pushed into a stipulated suspension. With an offer in compromise, you can give back the money. With a suspension, you can never give back time or the permanent stain on the record of the affected winery; a stain that must be explained in detail for years and decades to come, and a wound not easily closed.

It is time, however, to roll back the curtain.

Banfi Vintners And Riunite/Giv Agree To Part Ways Banfi To Focus On Premium And Luxury Offerings

  • banfi vintners
  • March 12, 2019

After a partnership spanning over 50 years, banfi vintners and riunite have mutually agreed to part ways.

Following a transition period ending june 10, 2019, riunite and giv brands will be marketed in the usa by frederick wildman and sons.

“with all the history we have made together, this is a difficult announcement to make,” says banfi vintners ceo cristina mariani-may. “however, after thoughtful consideration for our long-term goals, both sides concluded that it is time to move on.”

Banfi began importing riunite in 1967. By 1976, it was the #1-selling imported wine, a position it held for over a quarter-century.

“on behalf of cantine riunite & civ board of directors, employees and all associates, i would like to thank the mariani family and all banfi vintners associates for their collaborative partnership over many years and wish them the very best for their future business,” said vanni lusetti, general manager cantine riunite & civ.

“riunite has always been a wonderful, supportive partner, and we wish the brand continued success,” says mariani-may. “moving forward, we will be focusing our energy on further developing and enhancing our premium and luxury offerings – led by brunello di montalcino and the super tuscans of castello banfi, the crown jewel of our portfolio and a five-time gran vin italy winner. We are excited to take our portfolio of global brands to the next level with this new emphasis.”

The mariani family is celebrating 100 years as a leader and pioneer in the wine business, founded in 1919 by john f. Mariani, sr. The company continues to be family-owned by the founder’s children and grandchildren.

Has #Corngate Backfired On Bud Light?

  • beer business daily
  • March 12, 2019

Bud light hasn’t let off the gas in its attempt to ‘expose’ coors light and miller lite, if anything, things have intensified. The commercials are still running, billboards are popping up, and its relatives like natty light are getting in on the action throwing jabs on twitter.

So if a-b is ratcheting up the attacks that must mean it’s working, right? Not really. In fact, it seems the attacks are having the “opposite” effect, according to millercoors behind the beer blog.

[ed. Note: i know what you’re thinking… ‘Why source information from a-b’s competitor’s blog?’ the answer to that is simple, we’ve already reported on#corngate doing squat for bud light trends for a week or more now, and this report has the latest data to prove that #corngate hasn’t paid off for bud light].

“since the new campaign launched, bud light sales volume is off 9.2%, compared to down 6.7% in the 12-weeks leading up to the super bowl,” reports behind the beer, citing nielsen all outlet data to march 2. “the brand’s share of total beer also worsened, down 1.2 points of share versus down 1.1 points heading into the holiday.”

Meanwhile, miller lite “continues to pick up share in total beer and has gained a full share point in the premium light segment year-to-date,” per report, and “coors light has held share in premium lights.”

The early returns lead anup shah, miller vp, to tell the blog that “it’s clear that bud light’s desperate attempt to mislead consumers is not helping them.”

Anup adds that “bud light’s attack is not going to distract us from our strategy. In fact it only intensifies it. We’re going to continue to focus on making our message break through, connecting with latino drinkers and being bolder in our competitive spirit.”

Millercoors Takes Another Swipe At Bud Light For Its Corn Syrup Super Bowl Ad

Millercoors published nielsen data showing bud light’s falling sales since the rival beer aired a super bowl ad attacking miller lite and coors light for using corn syrup in their products. Millercoors had already hit back at bud light on twitter and with a full-page new york times ad. The ad further jeopardized a beer alliance after millercoors pulled out of a meeting scheduled for this month.

Millercoors took another swipe at bud light in a blog post that pointed to the rival beermakers’ falling sales since it aired its super bowl ad that called out miller and coors’ use of corn syrup in their lite beers.

Anheuser-busch inbev bought 5½ minutes of air time for the 2019 super bowl, but it was a single 60-second commercial for bud light that made the biggest waves. The ad shamed molson coors brewing’s miller lite and coors light beers for using corn syrup, leading to backlash from farmers and millercoors, molson’s u.s. division.

After the ad aired, millercoors responded on twitter and took out a full-page ad in the new york times to hit back at bud light and defend its use of corn syrup.

Miller lite and coors light use corn syrup to feed yeast in the brewing process. Once the yeast eats the corn syrup, it turns into alcohol and carbon dioxide. Anheuser-busch uses rice to feed the yeast when it brews bud light.

The commercial also jeopardized an alliance meant to help the biggest u.s. beer producers. The wall street journal reported that millercoors pulled out of a meeting scheduled this month with ab inbev, heineken and constellation brands. The four beer companies had been discussing teaming up for a national ad campaign to revive u.s. beer sales for more than a year before the super bowl commercial aired.

U.s. beer consumption has been declining as consumers drink more spirits and wine or eschew alcohol altogether. Last year, unit case volume of beer declined by 1.5 percent, according to iwsr data. To make matters worse for the country’s biggest beer producers, craft beers have been eating into big brewers’ sales.

But millercoors places the blame for bud light’s declining sales squarely on the super bowl commercial. In a blog post citing nielsen data, the brewer said monday that bud light sales volume declined 9.2 percent from the previous year in the four weeks since the super bowl. In the 12 weeks prior the football game, sales volume for the beer was down 6.7 percent.

Citing nielsen data, millercoors also noted that while bud light’s market share has declined, miller lite has gained market share while coors light is holding its own in the premium lights category. However, it did not share its own sales volume growth.

“it’s clear that bud light’s desperate attempt to mislead consumers is not helping them,” anup shah, vice president of the miller family of brands, said in a statement.

Ab inbev maintains that its goal for the campaign was to start a conversation about beer ingredients and transparency.

“we believe our current campaign has done just that – more people are searching for beer ingredients than ever before since running our ad,” an anheuser-busch spokesperson said in a statement to cnbc.

A spokesperson from nielsen confirmed the data cited in the blog post.

Ries & ries branding consultant laura ries said millercoors’ comments are a throwback to the cola wars between coca-cola and pepsico in the 1980s.

“that tends to put off consumers when there is too much negativity – and they’re thinking too much of their competitors before the consumers,” she said.

Brewers Association Unveils 2018 Rankings Of Top Us Brewing Companies

The brewers association today released its annual rankings of the top u.s. beer companies based on projected 2018 sales volume.

Amongst ba-defined small and independent craft brewing companies – those businesses that make fewer than 6 million barrels of beer annually and are less than 25 percent owned by a non-craft brewer – pennsylvania’s d.g. yuengling & son once again secured the top spot as the largest producer of craft beer in the u.s.

Boston beer company and sierra nevada brewing ranked second and third, respectively, and the top seven-ranked breweries remained unchanged versus last year.

The canarchy craft brewery collective – which consists of oskar blues, cigar city brewing, perrin brewing, utah brewers cooperative, deep ellum brewing, and three weavers brewing – moved up one spot, to eighth, while stone brewing fell one spot, to ninth.

Meanwhile, oregon’s deschutes brewery held onto its 10th place ranking. In total, 16 of the top 50 craft breweries maintained their positions, while another six companies shifted ahead one place.

As in previous years, there were a few standout companies that made significant gains.

Cincinnati’s rhinegeist made the biggest leap forward last year, moving up an eye-catching 11 places (to 28th) from its ranking as the 39th largest craft brewery in the country in 2017, according to statistics published in the may/june issue of the ba’s new brewer magazine.

“this is the most competitive market that we have ever seen,” rhinegeist co-founder bryant goulding told brewbound. “it certainly gives us conviction that our double down in our backyard, our self-distribution and our regional awareness and focus is critical.”

According to goulding, rhinegeist did not open any new territories last year, and it grew production from 86,242 barrels in 2017 to 100,302 barrels in 2018.

Meanwhile, san diego’s modern times beer cracked the top 50 list for the first time, moving up 11 places, from 56th in 2017 to 45th in 2018.

Seattle’s georgetown brewing company also officially moved into the top 50 for the first time with a net rank improvement of nine positions (from 51st in 2017 to 41st in 2018).

https://www.brewbound.com/news/brewers-association-unveils-2018-rankings-of-top-us-brewing-companies

Brown-Forman (Bfb) | Neutral

Minding Our Ks And Qs: Our Read Of Bfb’s Fiscal 3q19 10-Q

  • citi
  • 12 mar 2019

Tidbits worth noting

We have highlighted details on sales by geography, price/mix, advertising expenses, foreign cash balances and repatriation plans, and tariffs as well as other tidbits.

Fcf increased

Bfb generated free cash flow of $493 mm through fiscal 3q19, which represents a 7% increase from the $462 mm in free cash flow generated in the year-ago period. The increase is attributable to higher operating cash flow as well as slightly lower capex.

Cash conversion cycle improved

Based on our calculations, bfb’s cash conversion cycle improved by 12 days in fiscal 3q19, owing largely to a shorter inventory cycle (-20 days), which was partly offset by a longer receivables cycle (+4 days) and a shorter payables cycle (-5 days).

Cash used for investing decreased

Bfb used $86 mm for investing activities through fiscal 3q19, which compares to the $101 mm used in the year-ago period. The decrease is attributable to the timing of payments related to ongoing capital projects. Through fiscal 3q19, bfb’s capex spending was down 16% yoy, and capex as a percentage of sales was down 60 bps, to 2.5% of sales.

Cash used for financing increased

Bfb used $458 mm for financing activities through fiscal 3q19, which represents a 21% increase from the $380 mm used in the year-ago period. The difference largely reflects a $205 mm increase in share repurchases and an increase in dividend payments.

Maintain neutral rating

While we appreciate both bfb’s strong portfolio of premium brands as well as the international growth opportunities that exist for premium american whiskey over the long term (acknowledging the current uncertainty in certain international markets owing to tariffs and possible trade wars), we see the benefits of the story as being fully reflected in the current valuation.

Last drop bottles 1925 grande champagne cognac

Rare spirits bottler the last drop distillers has unveiled its first grande champagne cognac bottling, which includes liquid distilled in 1925.

The 1925 cognac has lain forgotten on a family estate in the grand champagne region, where it was buried in the back of a cellar in 1940 to protect it from advancing german forces in the second world war.

The cognac barrel remained hidden for nearly 80 years, before it was uncovered by last drop distillers in 2018.

“the moment we first tasted the 1925 cognac, we knew we had a miraculous spirit before us,” said rebecca jago, joint managing director of the last drop distillers.

“it is an extraordinary cognac from a single, precious cask, to rival any of the great names. It is made more poignant by the fact that it was distilled in the year my father, tom jago, was born. We celebrate his wonderful life with our 14th release, of which he would have been most proud.”

The cognac was distilled in a small, traditional wood-fired still in the same year that the great gatsby was published, work on mount rushmore began and the first edition of the new yorker was released.

On the eye, the cognac is “mahogany, with burnished copper highlights”, while on the nose it has floral notes and fruity hints of red and black cherry. The palate, meanwhile, “demonstrates its impressive vintage, while having all the freshness and lively vigour of an eau-de-vie a third of its age”.

It is believed that this cognac spent its life in an ex-pineau des charentes cask, imbuing it with a distinct sweetness.

Just 182 bottles of 1925 hors d’âge grande champagne cognac will be released by the last drop distillers, each packaged together with a 50ml miniature replica and a pocket-sized, leather-bound tasting book.

The release will be available from select specialist spirits retailers with an rrp of £3,950 (us$5,160).

Campari group opens north america hq in new york

Italian drinks firm campari group has opened a new headquarters for its north american and us business units in new york city.

The company announced it would move its headquarters from san francisco to new york in february last year.

The new offices, which overlook bryant park, occupy the 18th and 19th floors of the grace building in manhattan.

Campari group hired global architecture and design firm gensler to design the new office, which has been designed to evoke the group’s “rich italian heritage and legacy”.

The 65,000-square-foot space is twice the size of the previous san francisco office.

The office will feature four “bar-like” experiences for employees and guests. The fortunato and concierge espresso bar are c-shaped, with the fotunato also serving as the reception desk. The café bar will be a space for employees to gather for meals while the boulevardier lounge features an antique bar.

In addition, the space will also feature the campari academy – an innovation lab for bartenders and visiting brand ambassadors to experiment and create new cocktails.

“the us is now the largest market in terms of sales for campari group, so we needed a new headquarters befitting the important role this market and this region has to the company,” said jean-jacques dubau, managing director, business unit north america, campari group.

“we wanted our offices to exemplify the campari group persona while offering a creative work environment where our employees can collide, connect, and collaborate with each other and key business partners.

“this is an exciting moment for campari. We’re confident that our new north american headquarters, located squarely in the epicenter for the american creative and spirits industries, will increase our collaboration, connect us more closely to our counterparts in milan, and give us the room to expand as we grow our portfolio of premium brands.”

Is there terroir in whisky?

Maybe you’ve had this sensation: you’re sipping scotch whisky, and you suddenly pick up a strong sense for the spirit’s place of origin. You believe you taste the earthiness of the barley, the sweetness or spice of the barrel, perhaps the saltiness of the sea and peat smoke.

The flavor of place, or terroir, comes up frequently in discussions of wine. But how to talk sensibly about terroir in whisky?

The case for terroir is usually not addressed for spirits like irish or scotch whisky. Some find it hard to believe such liquors might, in any way, reflect terroir, especially after distillation, which strips away flavors.

Bruichladdich (brook-laddy), however, is one of the few scotch distilleries to vigorously claim its whisky reflects the place where it’s made, the peat-covered island of islay off scotland’s west coast.

“bruichladdich is the only distillery to conceive, distill, mature and bottle all its product 100 percent on islay,” says zoe turnbull, a spokesperson for the distillery. “the distillery works with farmers on the island to grow barley, and each showcases the soil and topography.”

The case for discerning the taste of terroir in whisky has recently gained scientific support. In january 2019, “the drinks business” reports, “preliminary results of a study exploring the influence of terroir on barley . Concluded that ‘environmental differences in whisky flavor are present.'” so, according to this study, the barley in whiskey reflects the place where it was grown.

Although discernible “environmental differences” in barley may be subtle, there are other ways whisky can express terroir.

“water added after distillation is hugely important to the terroir of our whisky,” says allan logan, bruichladdich production manager. “islay spring water is filtered through billion-year-old rocks; it’s soft, offering a desirable neutrality when cutting whisky down to bottling strength.”

Smokiness is usually part of the scotch drinking experience. The smoke flavor comes from burning peat, which stops the germination of the sprouting barley so that the sugars will be conserved for conversion into alcohol. The smoke of peat, composted organic matter cut from islay’s boggy fields, contributes to the spirit’s taste of place.

Still, smoke may overwhelm the subtler flavors of barley and water. If you don’t like smoke, get unpeated or lightly peated scotch from speyside, such as the macallan or glenlivet. For many, however, smokiness plays a big part in the scotch experience; if it weren’t there, it’d be missed.

At his distillery, logan explains how even his barrels contribute to the taste of place that ends up in his scotch: “the famously ‘salt-soaked’ islay air interacts with the woods of every barrel we use.”

The brininess of islay whiskies, including ardbeg and laphroaig, may in this way reflect the island’s terroir . Or, if you will, merroir.

Buffalo trace distillery and frankfort parks and recreation to host 20th annual easter event

  • buffalo trace distillery
  • March 13, 2019

Buffalo trace distillery and the city of frankfort department of parks, recreation and historic sites is egg-cited to host its 20th annual easter event next month. “easter at the trace,” is a festival-like event, comprised of music, refreshments and other easter activities, including photos with the easter bunny and an opportunity to search for thousands of treat-filled eggs on the distillery lawn.

Easter at the trace will begin at 11 a.m. Sunday, april 14 in the buffalo trace distillery gardens and conclude at 2 p.m.

All families interested in participating must register online ahead of the event and present a digital or printed ticket at the check-in. This remains a complimentary event for children and families to attend, but due to growing interest, and in order to manage crowd size and ensure a safe event for everyone, registration is required.

The distillery lawn will be divided into two large hunt areas. At noon, children ages 0-2 will hunt in one marked area, and then at 12:15 p.m. Children ages 3-4 will hunt in a second area. The areas will be replenished with eggs and then at 12:45 p.m. Children ages 5-8 will hunt, followed by children ages 9-11 at 1 p.m.

Registration for easter at the trace is complimentary and begins march 14. Visit www.buffalotracedistillery.com/events and click on the “register now” link in the events stampede calendar. All participants must register online and bring a digital or printed ticket to check-in at easter at the trace. Early registration is recommended as space is limited.

Buffalo trace is located at 113 great buffalo trace in frankfort, ky. Visitors are asked to enter at the main distillery entrance and follow event parking signs. Please allow for ample time for parking. In the event of rain, the easter bunny will greet the children for photos and pass out treats in the buffalo trace clubhouse.

National cancer chief, ned sharpless, named f.da.’s acting commissioner

Dr. Norman e. Sharpless was named acting commissioner of the food and drug administration on tuesday. For the last 18 months, he had been director of the national cancer institute.

Dr. Norman e. (ned) sharpless, director of the national cancer institute, will serve as acting commissioner of the food and drug administration, alex m. Azar iii, secretary of health and human services, announced on tuesday.

Dr. Sharpless temporarily will fill the post being vacated by dr. Scott gottlieb, who stunned public health experts, lawmakers and consumer groups last week when he abruptly announced that he was resigning for personal reasons.

Dr. Sharpless has been director of the cancer center, part of the national institutes of health, since october 2017. He is also chief of the aging biology and cancer section in the national institute on aging’s laboratory of genetics and genomics. His research focuses on the relationship between aging and cancer, and development of new treatments for melanoma, lung cancer and breast cancer.

“dr. Sharpless’s deep scientific background and expertise will make him a strong leader for f.d.a.,” said mr. Azar, in a statement. “there will be no let up in the agency’s focus, from ongoing efforts on drug approvals and combating the opioid crisis to modernizing food safety and addressing the rapid rise in youth use of e-cigarettes.”

Like many previous f.d.a. commissioners, dr. Sharpless, 52, has had a long career as an academic. Before his appointment to the cancer institute, he had served as director of the university of north carolina lineberger comprehensive cancer center, a position he held since 2014.

Dr. Sharpless attended medical school at the university of north carolina, and did his residency at massachusetts general hospital, followed by a fellowship at the dana-farber cancer institute. He first became a professor at the university of north carolina’s medical school in 2002. In addition to his academic work, and his more recent job at the cancer center, dr. Sharpless is a founder of g1 therapeutics, a publicly traded biotechnology company that is a developer of cancer treatments. He divested all stocks from the company when he became director of the cancer institute, according to jeff macdonald, a spokesman for the company.

He will begin the job in early april, mr. Azar said, after the departure of dr. Gottlieb, who has been commissioner since may 2017.

Although dr. Sharpless has been previously mentioned as a possible successor to dr. Gottlieb, mr. Azar said this is a temporary appointment and that the search for a permanent commissioner is underway. A successor must be nominated by president trump and confirmed by the senate.

Dr. Gottlieb said he supported the appointment.

He also said some members of the f.d.a. were already acquainted with their new boss, who had joined them on the basketball court for weekly games.

The f.d.a. regulates more than 20 percent of the goods in the united states economy, from cosmetics to contact lenses, artificial hips and prescription drugs.

Dr. Gottlieb’s boldest action has been his crackdown on youth vaping, for which he blamed the e-cigarette industry. Dr. Sharpless has already signaled support for the move.

In a statement issued on tuesday, dr. Sharpless said, “it will be an honor to advance the f.d.a.’s critical public health mission.”

But it is unclear whether an acting commissioner would be able to press ahead on the more contentious fronts related to tobacco: the f.d.a.’s long-term proposals to reduce the level of nicotine in traditional cigarettes; tightening regulations on all e-cigarettes and other smoking alternatives; and pursuing a ban on menthol cigarettes. Many of the tougher restrictions face considerable opposition from congress and the tobacco industry.

Ellen sigal, founder of friends of cancer research, praised the appointment.

“we have no doubt that dr. Sharpless will continue to navigate and direct the f.d.a. in a manner that best benefits patients,” she said in an email.

In a november 2018 post on the cancer center website, dr. Sharpless said that funding for the institute had grown, but that the number of excellent ideas for important research had grown even faster.

“in many ways, we are still just scratching the surface of our knowledge of cancer, how it begins, how tumors interact with the immune system and other elements of their microenvironment, how to overcome treatment resistance, and a host of other critical questions,” he wrote.

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Accolade puts knappstein winery up for sale

Accolade wines has placed one of the clare valley’s best known wine brands, knappstein, on the market.

The deal includes the winery and cellar door operation, just north of the clare town centre, plus four vineyards comprising 127ha of riesling, shiraz and cabernet sauvignon varieties.

The provis, enterprise and yertabulti vineyards are located at spring farm, while the ackland vineyard is located in watervale.

The company’s cellar door is housed in an historic brewery building, with a striking tower and chimney, while the winery supports annual production of up to 1500 tonnes.

The sale of the knappstein operation follows a review of accolade’s south australian footprint announced in november.

“the company regularly reviews its operational footprint globally to ensure we are ideally positioned to meet the needs of our customers, to adapt to changing market conditions and to take advantage of opportunities,” the company said at the time.

“this approach ensures we remain competitive and well positioned for long term growth, profitability and success.”

According to selling agent langley & co there is potential to expand capacity at the winery or embark on further development to support additional activities including in craft beer production, hospitality and tourism.

The agent also notes there is “an experienced team is in place for the ongoing management of the vineyards and winery”.

Knappstein was established by winemaker tim knappstein in 1969, with the first wines produced in 1974.

Accolade wines acquired knappstein when it bought lion australia’s premium wine business, fine wine partners, in 2016.

The sale included fwp’s six australian fully-owned brands petaluma, croser, st hallett, knappstein, stonier and tatachilla, its four australian wineries, including all plant and equipment, land and vineyards, inventory and the on-and-off-premise distribution network.

Wbm foreshadowed in november last year that a knappstein sale was on the table. It followed the news the company was shifting its houghton wines production from its historic winery and cellar in the swan valley to nannup.

The maddening business of marketing to millennials

Millennials are an expansive group spanning almost 20 years, as such they are notoriously difficult to market to.

Is feverish marketing to millennials misplaced and are other generations overlooked?

“i do think bordeaux is potentially losing a generation,” argues nyc-based sommelier cedric nicaise.

“the wines are expensive, seen as ‘old’ by many younger people and are not cool.”

Is he right? Even if nicaise is way off track, wine agencies across france are nevertheless busy crafting campaigns intended to attract gen y.

“until recently, it was true that bordeaux wines appealed to an older audience, but the tide is turning,” insists allan sichel, vice-chairman of the civb. He continues: “by communicating the region’s affordable and diverse styles – which include dry whites, rosés, lighter, more modern reds and even sparkling wines – and stellar sustainability credentials, we are encouraging a new generation of younger wine drinkers to discover bordeaux.”

Several other promotional bodies, including inter rho^ne and interloire, have also invested unprecedented resources into campaigns targeted at younger drinkers.

Of course, this is hardly revolutionary – for as long as i can reasonably remember, everyone in the wine industry has been chasing millennials (born between 1981- and 1996). After comfortably selling wine to the baby boomer generation for years, millennials became the next big target of importers, producers, and pr firms.

Except that in the us market at least, it hasn’t quite turned out as planned. Wine.com’s recent success with selling to gen y proves they’re far from a redundant consumer group, although there is still much consternation about why millennials are not buying wine in the numbers that producers and marketers were expecting.

But if we pause for breath for one moment, then the constant self-flagellation over failing to engage with this demographic suddenly appears quite ludicrous. It’s not that i hate millennials (i am one), although many of the points of ridicule – phone addiction, narcissism, self-absorption – seem quite reasonable. It’s just that the hand-wringing, the neurosis, the obsession over this consumer group is almost entirely unjustified.

The main argument for investing resources into enticing generation y is surely that baby boomers (born: 1946-1964) are aging out of wine buying and drinking. Who is going to take their place? Yet 54-72 year olds increasingly rule the roost; birth rates in the west are incredibly low, while an aging population continues to benefit from increases in both the length and quality of life. As a result, we’re seeing an increasing shift in wealth to older people within populations in nations like the us.

“globally, it is projected that the over-60s will account for 50 percent of all the growth in urban consumption between 2015 and 2030,” explains lulie halstead, a senior analyst at wine intelligence. “these demographic shifts are reflected in a proportionate change in the age of wine drinkers, with a shift to a higher proportion of drinkers being older drinkers.” she adds that baby boomers tend to drink wine more frequently than younger drinkers under the age of 30.

Trust me, i speak from experience. My parents are fit, healthy (touch wood) and continue to spend generous amounts on travel, restaurants and premium wine. I’ve waited patiently for my inheritance, but to no avail – the older cohort of the baby boomers are hanging on for dear life. The bastards.

Meanwhile, most of my friends in the 30-35 age group can only dream of a mortgage, moan about how little disposable income they have, and occasionally buy wine under £10 ($13). No amount of digital marketing, of instagram wankery, of social media campaigning, is going to tempt them to trade up. Two reasons: first, because they’re not that involved in the category and, second, because they lack the resources. In my experience, they speak for the majority of millennials.

It’s certainly ironic that at a time when the industry – particularly in france – is investing in the younger cohort, some millennials are rejecting alcohol and pursuing healthier lifestyles. Or at the very least, rejecting wine for beer and spirits.

“the global shift towards personal health and well-being continues to have a strong impact on the consumer relationship with alcohol. The move towards both moderation and abstinence has impacted wine,” says halstead. “in the uk and us, the active moderation trend is being led by younger drinkers.”

Young, technologically aware millennials are an attractive group and marketeers are all too keen to get in on the action.© the wine club site | young, technologically aware millennials are an attractive group and marketeers are all too keen to get in on the action.

Millennials are also a fickle bunch, at least when it comes to buying alcohol. That’s according to the iwsr, who have conducted extensive research around this topic.

“we know that millennials are less brand loyal, and in beverage alcohol, they are less category loyal,” says iwsr marketing manager hana-mai hawkins.

“what this means is that they are more likely to jump between craft beer, spirits and cocktails, and wine. This makes it challenging for brand marketers to capture attention and share.”

Stephen cronk, owner of mirabeau, adds: “millennials seem to be more health conscious and socially responsible than the generations before them but potentially more adventurous and therefore more fickle.”

Yet (some) in the fine wine market still believe that millennials are an untapped source of riches. Perhaps one day, but historically the expensive stuff has never been accessible to the vast majority of 20 to mid 30 somethings. So why do we expect millennials to be any different?

“marketing fine wine has always been more about disposable income than age. Are more baby boomers buying expensive cars than millennials, i would venture yes, same as any luxury item,” says nicaise. “i will say, however, that millennials are much more adventurous wine drinkers than the preceding generations. But again, is this a reaction to high, unattainable prices, or are they very much looking to new regions?”

Wine buyer peter mitchell mw expands upon the theme.

“much of the trade wrings its hands about attracting younger customers, and has little idea how to go about it. That said, premium wine has never really been big amongst younger consumers, so the current situation is not unusual,” argues mitchell mw.

“i don’t remember claret, burgundy or sancerre featuring amongst my contemporaries’ drinking habits 25 years ago. What is more unusual historically is the number of under-30s who do not drink alcohol. That presents more of an issue for the future, assuming that habit does not change as they grow older.”

Stephanie peachey, vice-president of the fine wine division at fetzer vineyards, argues that most of the presumptions about age segmentation and wine consumption can be discarded outright.

“as an ‘oregon trailer’ and marketer, i think too much hype is made of the ‘younger’ age segmentation in general,” says peachey.

“we need to think about consumers in terms of their lifestyle preferences. I have some millennial friends with far more sophisticated palates and cellars than some of my gen x friends who conversely might spend more on wine in terms of volume and vice versa.”

This last statement begs the question: what about generation x? No one has been talking (in any detail) about the cohort born between 1965-1980. Yet in my wider social circle, people in their mid-40s to early 50s seem to be having the best time of late. They entered the workforce at a good time economically, and with fewer graduates competing for careers compared with the generations bracketing them. The last generation who could aspire to property ownership, gen x are arguably at the peak of their lifetime income and spending. And, they typically have fewer children, if any at all, compared to boomers.

“generation x is absolutely overlooked. For me they are actually the best consumer group – people who are often established in their careers and lives but have much more adventurous tastes than boomers,” says zach jones, wine director of pacific standard time in chicago.

Kate goodman, owner of reserve wines in manchester, adds: “generation x is our biggest audience in terms of sales. As a business we are aware of this. It is possible that the wine trade as a whole may still be overly focused on the baby boomers, however we have seen some engaging stories emerging from the independent wine scene aimed at freshening their outlook and engaging with their younger audiences.”

Nevertheless, opinion pieces continue to chastise brands for failing to capture generation y’s attention, while simultaneously offering advice on how to woo them back, typically involving a sycophantic ode to the value of endless drivel put out via social media.

I understand that millennials are probably the most connected demographic, as they are ‘always-on’ with regards to handheld devices. They don’t call them zombies for nothing. Therefore in theory it’s possible to communicate directly with them or to work with people who can influence them. However, this foolishly presumes an interest in wine to start with. And brands should remember that a competing bottle, or category, or point of interest, is merely a swipe away.

Thankfully, although marketeers and columnists are obsessed with pandering to millennials, the trade has successfully nurtured a strong relationship with the generation in the middle. There is more being done by buyers and sommeliers in engaging with generation x, arguably wine’s most important consumer group, than they are given credit for.

Millennials may become important wine consumers one day. But, as life expectancy rises and retirement becomes either a dream or an unsolicited eventuality, generation y should always take a back seat to their predecessors, at least for the time being.

Who’s been charged in the college admissions cheating scandal? Here’s the full list

The actresses Felicity Huffman and lori loughlin and the fashion designer mossimo giannulli are among the 50 people charged in a bribery scheme to secure places for students in elite colleges.

In what the justice department called its largest ever college admissions prosecution, federal authorities charged 50 people on tuesday with taking part in a nationwide scheme to game the admissions process at highly competitive schools like yale and the university of southern california.

Those charged include wealthy and powerful parents accused of paying millions of dollars in bribes, exam administrators and athletic coaches accused of manufacturing students’ achievements, and private admissions counselors accused of coordinating it all.

Liv-ex 1000 stutters in february

Front Page

By rupert millar

11th march, 2019

After storming to unprecedented heights over the past three years, 2019 continues to see the liv-ex 1000 struggle to make any headway with burgundy taking the biggest hit.

The broadest measure of the market liv-ex has, the index dipped 0.9% in february after declining 0.3% in january, as did the fine wine 100 as previously reported.

All of the sub-indices declined last month with the exception of the bordeaux legends 500 which gained 0.9%.

Intriguingly, it was the burgundy 150 index that has been the most successful which was hit hardest, down a frighteningly tangible 3%.

Liv-ex reported that demand in asia during the new year break had been poorer than usual.

It is of course possible that this is a blip and normal service will resume shortly. Many markets ‘pause for breath’ after prolonged periods of big growth and sometimes settle back a little before kicking up another gear.

But if the indices continue to fall over the course of several months with ‘brexit’ uncertainty still casting a pall over many markets and an en primeur campaign that could stall and drive the market still lower without much uk input, the situation does not look too terribly settled for fine wine this quarter.

Bordeaux 2018 yields – a devilish year

https://www.jancisrobinson.com/

March 13, 2019

Gavin quinney of ch bauduc puts the vintage soon to be shown en primeur into perspective, and provides the customary canine illustration.

As a backdrop to the en primeur tastings that take place in bordeaux at the end of march and during the first week of april, i offer a look at the production figures and a few statistics for the 2018 vintage. More than that, it’s a fairly in-depth breakdown of how the different appellations contribute to the enormous amount of wine that’s made here, and how recent vintages compare.

On the face of it, a year that yielded the same amount of wine as the average for the previous 10 years wouldn’t seem to warrant a great deal of scrutiny. As with any vintage, however, the devil is in the detail and none more so than with bordeaux 2018, when the equivalent of 666 million bottles were made. While it was a glorious year for some growers, which will presumably be borne out by the tastings, for others the size of their crop was the stuff of nightmares.

Ten highlights of bordeaux 2018 production

Bordeaux produced a fraction under 500 million litres in 2018, the equivalent of 666 million bottles.

Production was in line with the 10-year average of 507 million litres, which itself includes two small crops in 2013 and 2017. In the decade prior to 2013, the average was nearly 570 million litres.

The vineyard area, at 111,000 hectares (274,290 acres) in 2018, has been consistent in the last eight years, with a consolidation of growers from over 9,000 to under 6,000 in ten years.

Although an ‘average’ volume overall, yields from one vineyard to another varied enormously. Some had plentiful crops, while others were hit by downy mildew following the wet spring.

Hailstorms in may and july caused damage in some unlucky areas.

Overall, 2018 yields were a vast improvement on the frost-damaged 2017 vintage, though lower than the average of the three vintages prior to that.

On the right bank, st-émilion had double the production of the near-disastrous 2017 crop, along with some of their neighbours.

On the left bank, pauillac, st-estèphe and st-julien (slightly) had lower yields in 2018 than in the previous three vintages.

A wet spring followed by three months of almost uninterrupted sunshine from early july to the first week of october concentrated the grapes.

2018 is a vintage that will be remembered with dismay by some châteaux but as one of the greatest by others.

https://www.jancisrobinson.com/articles/bordeaux-2018-yields-a-devilish-year

Château lafite rothschild brings to auction largest public offering of direct from château wines

https://seekingalpha.com/

March 11, 2019

In celebration of the 150th anniversary of the purchase of château lafite rothschild by baron james de rothschild, an unprecedented auction has been organized in collaboration with zachys, a us and hong kong-based leading wine auction house.

The auction, to be held on march 30th in new york city, will be comprised of bottles solely from the château’s own cellars with vintages representing every decade of their ownership dating back to 1868. “each vintage tells a different story: written by the hands of the people that made them, through wars, frost attacks and recessions,” says saskia de rothschild, the new chairwoman of château lafite rothschild. “together with my father, we chose vintages for which we wanted to find new homes, straight from the lafite cellars to yours.”

With 3384 bottles, this represents the largest collection of single-owner domaines barons de rothschild (lafite) wines ever to be auctioned. The auction will also include wines from château l’evangile, château duhart-milon, château rieussec and carruades de lafite.

Among the rare, direct from château lots are:

Large-format imperials signed by saskia de rothschild (chairwoman of domaines barons de rothschild (lafite)) and her father, baron eric de rothschild.

A single bottle of 1868 in wood case: this is one of a handful of bottles left at the château. Baron james purchased the estate that year on the advice of his three sons but sadly died soon after the purchase and never had the opportunity to taste this first vintage. The winning bidder of this lot will also be invited to visit and have lunch at château lafite rothschild.

A single bottle of 1870 in wood case and with a wax capsule, is said to be one of lafite’s most mythical vintages which took 50 years to reach maturity and realize its full potential.

Wines from iconic vintages including the 1945, 1947, 1949, 1959, 1961, and modern wines from 1982 through current vintages can all be found in 750ml and large-format bottles.

All of the wines in this auction were stored without labels. The labels are specific to this auction with all vintages printed on modern, security paper and affixed with a proof-tag to guarantee authenticity.

The auction will take place in new york city on march 30, 2019 at le bernardin privé, 153 w 51st new york, ny 10019.

Online bidding is now live at https://auction.zachys.com/auctions/default.aspx?auctionid=308.

About domaines barons de rothschild (lafite)

Domaines barons de rothschild (lafite) have based their development in the crafts of the vine and of wine. Around château lafite rothschild, the group has grown with the successive acquisition of château duhart-milon (grand cru classé in pauillac), château rieussec (premier grand cru classé in sauternes) and château l’évangile (pomerol).

In parallel, it has expanded outside the bordeaux region: viña los vascos (chile, 1988), domaine d’aussières (languedoc, 1999), bodegas caro (argentina, 1999) and china since 2008 with the development of a vineyard in the region of penglai. The group has also produced légende and saga, a range of bordeaux wines.

With 1,200 hectares of their own vineyards, domaines barons de rothschild (lafite) work with a worldwide network of more than 80 distributors. For more information: www.lafite.com

About zachys wine auctions

Founded over 70 years ago, zachys is one of the largest independent wine auction houses and retailers in america with offices in new york, washington, d.c., hong kong, and dedicated wine specialists in mainland china, tokyo, london, and europe. Ceo don zacharia played a major role in creating the fine wine auction marketplace in america. Today, zachys has established itself as the nation’s largest and most powerful retailer and auctioneer of fine bordeaux, burgundy and beyond. For more information visit

www.zachys.com/auctions.

Tonight’s dinner? In a cooler-sized robot that knows where you live

Companies test automated delivery devices in uphill effort to solve the ‘last-10-yard problem’

 wsj

By mike colias and marc vartabedian

March 11, 2019

Food companies are experimenting with autonomous delivery to reduce the high costs and headaches of door-to-door service. But the robots aren’t riding to the rescue any time soon.

Fast-food chains and grocery stores are teaming with big car companies and tiny startups to test the idea of autonomously shuttling food to customers. During tests in miami, michigan and las vegas, domino’s pizza inc. Delivered more than 1,000 pies in ford sedans plastered with signs that read “self-driving delivery test vehicle.” venture-backed startups have dispatched a few hundred cooler-sized robots in smaller cities like berkeley, calif., to weave around pedestrians and deliver burritos or groceries to customers’ doorsteps.

Food companies are betting that such automation can reduce delivery costs by as much as 40%, according to mckinsey & co., while also helping ease a shortage of delivery drivers. The consulting firm says self-driving cars will cost more than conventional ones but will drastically cut labor costs, which account for the bulk of delivery expenses.

Broad deployment, however, is many years away, experts say. Driverless-car developers have lowered their ambitions over the past year following the fatal crash of an uber technologies inc. Test autonomous vehicle and persistent technical challenges. Even leaders like alphabet inc.’s waymo and general motors co.’s cruise division continue to operate with safety drivers at the wheel.

Autonomous-car delivery is likely to roll out gradually over the next decade, but widespread door-to-door robot service-a solution to what mckinsey calls the “last-10-yard” problem-is still a decade out, a report last year said.

Domino’s has paired with ford motor co. To deliver pizzas in human-driven sedans outfitted to appear autonomous, complete with spinning laser-based radar. Users order through an app and track the vehicle’s location. Once curbside, a recorded voice instructs the customer to pluck the pizza from an automated rear-seat storage compartment.

The auto maker-which is testing actual self-driving cars separately-is working out the delivery program’s basics, like where the vehicles would be parked and how to equip them to keep food warm or cold, said alexandra ford english, director of operations for ford’s autonomous-vehicle business. “we’re making changes every day to our business model,” she said in an interview.

The companies say many customers were excited to greet the faux robot car, and some even talked to the automated voice or waved goodbye. At least one person threw in a cash tip. But some customers didn’t like having to walk to the curb for a pizza they would normally get at their door.

Driverless-car startup autox inc. Last year discovered that some customers for its autonomous grocery deliveries didn’t like having to come to the curb or driveway and schlep the bags inside, chief executive jianxiong xiao said. The silicon valley company switched its focus to prepared-food orders because people are more eager to leave the house to retrieve them, he said.

Growing hostility about the power and reach of technology in everyday life is creating a challenge for the startups to make their robots-which until now have largely been confined to warehouses, factories and ports-appear nonthreatening, say venture capitalists examining the sector. The new crop of sidewalk robots is likely to face resistance from regulators and ordinary people alike.

San francisco, for example, implemented a permit system that allows only nine sidewalk delivery robots to operate in portions of the city. State lawmakers in washington are pushing a bill through the legislature that could require such robots to be monitored by remote human operators. Amazon.com inc., which began testing six robots in washington in january, has opposed human-operator requirements.

“you’re delving into the world of psychology,” said steve westly, managing director at the westly group, a venture firm, which passed on investing in the sector. “robots bumping into you on the sidewalk-it’s a weird, scary, odd thing.”

Still, companies are betting on consumers like joseph oten, a freshman at the university of california, berkeley, who uses a robot-delivery service, kiwi, run by startup kiwi campus inc. He pays $14.99 a month for unlimited deliveries and orders several times a week from more than 40 local restaurant choices. Mr. Oten said kiwi can be faster than other delivery services during rush hour, and he likes not having to tip.

Investors continue to pour money into autonomous delivery. Mountain view, calif.-based nuro inc., which produces a street-delivery vehicle for carrying food or other cargo-no people-recently received more than $900 million from japan’s softbank group corp. The vehicle tops out at 25 mph, and the service charges $5.95 for deliveries in the scottsdale, ariz., area from kroger co.’s fry’s food. Nuro co-founder and president dave ferguson hopes to be serving an entire metropolitan market by year-end, though he wouldn’t disclose the city. The company has built six of the vehicles so far.

Toyota motor corp. Last year unveiled a prototype podlike autonomous delivery vehicle and is working with yum brands inc.’s pizza hut. Mercedes-benz parent daimler ag , which is developing its own autonomous-delivery vehicles, also invested two years ago in starship technologies, a sidewalk-robot startup.

Starship has more than 200 small robots operating daily across several markets, including a town outside london and at george mason university near washington, d.c. it links with local grocery stores and fast-food companies like dunkin’ brands group , inc. Customers order through starship’s app and pay $1.99 per delivery in the u.s. deliveries in the u.k. are about £1 ($1.30), plus 10% of the bill for grocery orders.

Starship chief executive lex bayer, a former airbnb inc. Executive, described the machines as “polite and cute.” he said city planners and the public will ultimately embrace small, low-speed robots sharing sidewalk space if it takes delivery cars off congested city streets.

“to have a 2-ton vehicle driving 3 miles to deliver a burrito to someone is not the most practical thing for the world,” mr. Bayer said.

The key to restaurant innovation: think like a startup

Ditch the status quo and embrace disruption.

https://www.qsrmagazine.com/

March 13, 2019

Tender greens ceo denyelle bruno says true innovation goes beyond being high tech; it solves an old problem in a fresh way.

It’s hard to believe that not so long ago, the tech world was considered a dull enterprise, overpopulated by geeky programmers wearing pocket protectors and who are stuffed into windowless server rooms.

The geeks may remain, but the rest of that picture has shifted dramatically. Following the digital revolution, tech has become something of a rock-star industry where innovation and creative problem-solving are revered. Companies move quickly, constantly pushing the envelope, even if that means collecting a few failures along the way. A far cry from the drab office spaces of decades past, techie workspaces-bright, open areas with playful touches like foosball tables and even indoor slides-have become the blueprint for even non-tech companies hoping to emulate those thought leaders.

Like any other industry, foodservice can stand to learn a thing or two-or in this case, five-from startups past and present, whether they be small, emerging ventures or giants like google and facebook. And as with all impactful changes, it begins with a shift in mindset.

Here’s how restaurants can start thinking like startups-no pocket protectors required.

https://www.qsrmagazine.com/business-advice/key-restaurant-innovation-think-startup

Americas restaurants: february jobs report: lsr and fsr wage inflation decelerate, but mandated increases pose risk in 2019

 goldman sachs

12 march 2019

The bureau of labor statistics (bls) reported the detailed breakdown of wage data for january on 3/8/2019. Lsr inflation declined further to +4.1% versus +4.2% in december (4.6% in november) and fsr inflation decelerated to +3.1% versus +3.7% in december; however, we continue to see risk of a re-acceleration in 2019 on the back of heightened state-mandated minimum wage increases. The rate of job openings and quits within accommodation and food services (6.7% and 4.6% respectively) remain at or near all-time highs, and both of these should be considered leading indicators of continued wage pressures. The 3mma of low-end income growth reaccelerated to +5.2% (from 4.7% in december), and we view the longer-term improving trend as supportive of overall restaurant industry demand. Trucking wage growth remains elevated at +3.3%, but dat data shows deflation in spot trucking rates.

Wage inflation continues to ease, but remain cautious into 2019: three-month moving averages in bls wage data began stepping down in early 2017 versus corporates maintaining or raising labor inflation outlooks. The gap between mandated minimum wages and restaurant wages was more stable, and we believe the moderation in restaurant wage inflation in 2018 (particularly in fsr) can partially be attributed to rolling off of higher minimum wage mandates in 2017. We see a corresponding risk of a reacceleration in 2019 when mandated wage increases re-accelerate in 2019 (national impact of 3.2% versus 2.3% in 2018, see appendix: summary of state minimum wage increases), and 2019 company guidance for restaurant wage inflation remains in the 3-6% range.

Low-end income growth remains supportive of industry demand; wage pressures vs. Demand benefit remains a central question: the three-month moving averages of low-end wage growth (+3.6%) and low-end income growth (+5.2%) both re-accelerated in january versus december (+3.2% and +4.7% respectively). We view the longer-term trend of improving income growth as supportive of overall industry demand, and our survey data is encouraging that wage dynamics are starting to positively impact pricing power in the industry. A model that allows high-level flexing of wage versus demand dynamics, overlays customer income exposure from our survey, and summarizes net impacts to eps, ebitda, and fcf across our coverage is available upon request.

Continuing to see wage pressures beyond minimum wages

Limited-service wage gap stabilizing: limited service restaurant wages tend to correlate strongly with changes in minimum wages (as they fall at or just above minimum wages; see exhibit 5); however, this relation broke starting in 2014 and suggests additional pressure as a result of tighter labor markets. Lsr wages continue to inflate faster than the historical relationship with minimum wages would suggest (exhibit 7); however, this gap appears to be stabilizing (exhibit 8), but we see a corresponding risk of a re-acceleration in 2019 when mandated wage increases re-accelerate in 2019 (national impact of 3.2% versus 2.3% in 2018; see appendix for detail).

History suggests a direct impact from wmt minimum wage increases in restaurants: wmt increased its minimum wage to $11 per hour from $10 in february. In the wake of its increase from $9 to $10 in february 2015, the gap between minimum wage implied restaurant wage inflation accelerated from roughly 1.5% (exhibit 9). This is based on the ttm gap prior to the increase and the forward 12 month after. We also remind investors that this can have an outsized impact on wages in “wage-friendly” states, as it creates a larger gap to mandated minimum wages.

Trucking wage inflation continues upward momentum: trucking wage growth remained high in january – accelerating to 3.3% (from +3.0% in december) – and continues to approach the 5-year high of 3.7% from february 2015; however, we would note that spot trucking rates show continued signs of moderation during the period (down ~14% in january).

Turnover near all-time highs; suggests increased tightness in the labor market: the rate of job openings within accommodation and food services re-acclerated by ~50bps to +6.7% in december (the latest available data). Month-to-month data points can be volatile; however, the rate of openings is now almost 100bps higher than the historical high-water mark set in january 2001, and suggests tightness remains a factor (exhibit 12). The rate of quits in december (+4.6%) was consistent with the prior period (but off recent highs from july-oct 2018 of 4.9-5.0%), but we continue to note the general upward trend in 2018 suggests that turnover remains and issue.

Shakeup at rite aid: ceo, coo and cfo leaving; 400 jobs cut

 csa

Marianne wilson

March 12, 2019

There’s been a big shakeup at the top at rite aid.

The drugstore chain announced late tuesday that john standley will step down as ceo, staying on until the appointment of his successor. In other changes that are effective immediately, bryan everett, coo of rite aid stores, has been promoted to coo of the company, succeeding kermit crawford who is leaving. And matt schroeder, chief accounting officer and treasurer, has been promoted to cfo, succeeding darren karst who will leave the chain this spring after supporting a brief transition.

“the board believes that now is the right time to undertake a leadership transition,” said bruce bodaken, chairman of rite aid’s board. “we will be focused on recruiting a leader that will best position rite aid to create long-term value for shareholders. We thank john [standley] for his outstanding leadership in guiding the company over the past several years.

In addition, rite aid said it is reducing management layers and consolidating roles across the organization, resulting in the elimination of approximately 400 full-time positions, or more than 20% of the corporate positions located at the company’s headquarters and across the field organization. Approximately two-thirds of the reductions will take place immediately, with the balance by the end of fiscal 2020.

“rite aid’s board of directors is committed to more closely aligning the structure and leadership of the company with our present scale and today’s announcement is an important step in positioning rite aid for future success,” said bodaken. “these are difficult decisions and we recognize the implications they have for individuals across our organization. However, it is imperative we take action to reduce the cost of current operations and become a more efficient and profitable company.”

This delivery service just expanded its alcohol delivery in a big way

https://www.thrillist.com/

By dustin nelson

03/12/2019

You don’t need me to list the reasons why having someone bring a six-pack to your doorstep is wonderful. It doesn’t matter whether it’s a service or a friend showing up, this is clearly a good thing. Unfortunately, friends aren’t always reliable — gary.

Yes, pizza hut is delivering beer now but the options are limited, and the options don’t include wine and whiskey. Instacart is launching a huge expansion of its alcohol delivery just in time for st. Patrick’s day. Customers in 14 states, as well as washington dc, will have access to booze from the service. The delivery options include specialty stores like bevmo! And total wine. So, you can order your favorite beers or limited releases like, i don’t know, darkness and unicorn farts.

You might be most familiar with the service because of its grocery delivery options and access to familiar chains like costco and cvs. However, with this expansion, you’ll be able to order alcohol from nearly a third of the stores instacart works with.

States that are part of the expansion include california, connecticut, florida, illinois, kentucky, massachusetts, minnesota, missouri, north carolina, ohio, oregan, texas, virginia, washington dc, and washington. A representative also notes that residents of nebraska and michigan should expect to have alcohol delivery available in the “coming months.” it’s just too bad that this option is arriving at the end of this year’s miserable pile-up of snowstorms.

Ecommerce: physical education

 ft

March 12, 2019

Amazon’s purchase of fancy organic food retailer whole foods two years ago left the world’s grocery industry quaking. Surely the $14bn deal meant the ecommerce company had a plan to upend the low-margin business of selling cornflakes and coffee? Yet amazon’s experiment has yet to contribute much to the group’s rapid earnings growth. Sales at physical stores fell 3 per cent in the past quarter.

Online shopping is still expected to take a bigger slice of the retail market over time. Global online sales rose 18 per cent in 2018. Overall, ecommerce accounts for more than 14 per cent of retail sales in the us, up from 13 per cent the year before, according to internet retailer.

But there are still some things that customers like to buy in person. Tesla has just walked back plan to close stores and ask buyers to shop for cars online. A mini-trend has emerged for direct-to-consumer ecommerce brands to open physical shops. Mattress seller caspers has showrooms. Glasses maker warby parker has opened small stores in wealthy cities. So have glossier and everlane.

Amazon wants more than showrooms. The company is not done hustling for a bigger slice of the near-$1tn market for us food shopping. Alongside whole foods it plans to open more amazon go convenience stores – replacing cashiers and checkouts with cameras. Reports of plans for 3,000 stores would give the company close to a 10th of the us total, excluding stores attached to gas stations.

Meanwhile online sales at large retailers are picking up. Investing in a smartphone app helped walmart’s us e-commerce sales rise 43 per cent in the last quarter. But the world’s biggest retailer cannot hope to compete with amazon on one key metric: data. Tracking weekly grocery shopping, convenience purchases and online sales gives amazon a view of customer habits that no other retailer – online or bricks and mortar – can match.

AB InBev, AI, Anheuser-Busch, Banfi, Beer, BI, Brown, Bud Light, Heineken, Intelligence, MillerCoors, Overproof, Predeictive, Riunite/GIV, Spirits, trump, Wine, ZX Ventures

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