Kings and Aces

Some Old Hands and Some New Players As Well Make Up an Exclusive List of the World's Best-Selling Spirits Companies

    It's 2006, and it should come as no surprise that the number of top spirits companies on the globe continues to shrink and realign, even as volume and dollar growth in the industry continues to steadily rise.
     The year 2005 saw the buyout of spirits giant Allied Domecq - its top brands, Stoli and Sauza to name but two, now bolstering the portfolios of French powerhouse Pernod Ricard and the well-heeled American spirits enterprise, Fortune Brands, respectively.
    Still, there are more than enough big players left standing to round out an exponentially lucrative list. And then some.
    What's on the horizon for 2006 and beyond? And better yet, what does it all mean for owners and operators and the on-premise?
    Not since Waterloo have the English and the French been as poised to battle it out for territory and global pre-eminence. Pernod's joint acquisition of Allied moves it into the No. 2 position among the world's top-selling spirits houses, behind No. 1 Diageo.
    The fabled Bacardi bat is flying high, too, and shows every sign of reaching new and greater heights with its own acquisition of golden Grey Goose vodka, in addition to its regal line of top-selling Bacardi rums.
    From there, the jokers get wild in the deck of top spirits hands, making for an infinite array of wagers and outcomes in a global industry in the middle of a sustained boom cycle.
    With the caveat that the sales and earnings of a number of spirits companies are closely held secrets, here is a snapshot of the 10 top-selling spirits companies - as near as we could determine this most exclusive ranking - for your entertainment as well as your spirited enlightenment.

Bacardi Limited

The Flight of the Bacardi Bat
    This Hamilton, Bermuda-headquartered global spirits powerhouse is flying high on the wings of a white spirits revolution in general and a rum revival in particular that is generating sales of 200 million bottles of Bacardi's dozen varieties of rum each year.
    Bacardi's brand equity among bartenders and owners alike in the on-premise is legendary. Mixologists in 200 countries appreciate the value and versatility of Bacardi rum as a well pour for standard cocktails. The breadth and depth of Bacardi's rum portfolio also supports creative new and comeback cocktail trends such as the Mojito, a steady variety of new flavored rum libations, as well a growing drift among rum aficionados toward the neat enjoyment of aged rums just as they come from the bottle.
    The House of Bacardi was built on rum barrels all right. To date, Bacardi rum remains the top-selling single spirit brand on the planet. Yet, recent acquisitions make it clear that Bacardi intends to cash in on other high-flying spirits categories and hedge its portfolio bets for the future, even as it seizes niche opportunities in the diverse and lucrative U.S. marketplace.  In the flash of a bat wing, Bacardi became a big player in the super-premium vodka category when it purchased French import Grey Goose last year from Sidney Frank for a figure just under $2 billion. Sales of Grey Goose rose to 1,760,000 9-liter cases in 2004, representing a better than 25 percent increase from the previous year.
    Bacardi also owns staples such as Bombay Sapphire gin, and Dewars White Label scotch, a brown spirit with growing sales, particularly among Latin and Hispanic consumers in key markets in the United States. Currently, Dewars is listed in Adams Wine and Spirits Industry Marketing 2005 as a Rising Star brand.

Brown-Forman

The House That Jack Built
    It's the real McCoy, with a portfolio of classics that go to the heart of the American whiskey and bourbon distilling tradition. Indeed, with sales of $2.2 billion at the close of (fiscal) 2005, Brown-Forman is among a select group of global spirits entities.
    Along with consumer goods such as its line of designer luggage, Brown-Forman boasts a number of fabled labels and brands in its old Kentucky home of a spirits house, including Southern Comfort, Canadian Mist, Woodford Reserve, Appleton Estate Jamaica Rum, Tuaca Liqueur, Korbel Champagnes and Fetzer wines.
Yet, its flagship Jack Daniel's Tennessee Whiskey, and its single-barrel, Gentleman Jack Tennessee Whiskey, continue to drive global growth. Sales of Jack Daniel's exceeded 4.2 million 9-liter cases in 2005, making it one of the top five established growth brands and a premium powerhouse on-premise.
    The growth of Brown-Forman's portfolio is evident in the performance of other key premiums spirits and wines as well. Its Southern Comfort bourbon brand posted sales of 1,393,000 9-liter cases in 2004 to earn it a relatively high position on Adams Established Growth Brands list. The company also made Adams' Fast Track Brands chart for its Appleton rum and its Tuaca liqueur, and earned a place on Adams' Rising Stars for substantial sales of its One.6/One.9 wine label.

Constellation/Barton Brands

Profit By the Volume
    A global force in the spirits industry, Chicago distiller and importer Barton Brands, a subsidiary of Fairport, N.Y.'s Constellation Brands, holds dominion over 200 beverage alcohol brands in all three - beer, wine and spirits - categories.
    Founded in 1897 and merged with Constellation in 1993, the company commands a premier share of the price-value segment with bar staple brands such as Fleischmann's, Mr. Boston, Skol and Schenley. Other spirited performers in the Barton portfolio include Canadian and American whiskies such as Black Velvet, Black Velveta Reserve, Ten High Bourbon and Canadian LTD, as well as Inver House and Montezuma.
    Barton has maintained its competitive advantage in the price-value spirits category through volume purchasing for the raw materials,  as well as state-of-the-art technology that allows it to produce quality spirits in high volumes.
    Barton flagship, Barton Vodka, posted a strong sales performance in 2004. It was one of four Barton brands to land on Adams' Established Growth Brands last year, along with Skol Vodka, Chi-Chi's, and Paul Masson Brandy.
    More recently, Barton has turned its attention to the premium end of spirits sales with its imported Effen vodkas, its Ridgemont Reserve 1792 Small Batch Bourbon and its Meukow Cognac. And the company is clear about its intentions to bolster its premium and super-premium lineup with new spirits brands, either developed or acquired.
    One of the country's largest suppliers by volume, Barton has wine holdings in Australia, Europe and the United States.

Diageo PLC

The 800-Pound Gorilla
    It's not happenstance that Diageo PLC reigns as the No. 1 spirits company in the world - by far - with sales of $3.9 billion in 2005 by U.S. subsidiary Diageo North America alone.
    Whether it's Diageo's portfolio of global brands - Smirnoff and Guinness and Captain Morgan and Johnnie Walker - its innovative new launches, such as French-import Cîroc vodka or its studied marketing methods to better connect with customers and the cocktail experience, there is no question that Diageo thinks and acts like the global leader it is today.
    Its king of the hill status may suggest longevity, but Diageo was formed less than a decade ago, in 1997, through the merger of GrandMet and Guinness. In the interim, Diageo has divested itself of holdings such as General Mills and Burger King to focus exclusively on the premium drinks market.
    It could be argued that Diageo's inexperience has proven advantageous to the extent that it has contributed to a business environment that encouraged new ways of doing business. A prime example of this bold new thinking about building global brands the Diageo way is its complete overhaul of its distribution network, managed until 2004 by Schieffelin & Somerset and now controlled internally. The company also has been at the forefront of industry-wide efforts to promote responsible drinking via print and electronic media.
    Yet, correspondingly, Diageo has been anything but shy in seizing opportunities to burnish its brand and image on a global scale. In 2004, The Wall Street Journal reported that Diageo did an end run around CBS's ban on hard spirits ads and the network's exclusive arrangement with Anheuser-Busch that only its Budweiser and Michelob brands would get commercial plugs during the Super Bowl telecast. Diageo bought 30-second spots in local markets around the country instead for its Smirnoff Ice brand to reach the mass audience.

Future Brands LLC

The Future of Brands
    The name says it all, suggesting something new and different on the spirits horizon. And the Future Brands LLC company, founded in 2001 by Chicago's Jim Beam Brands and Sweden's V&S Vin & Spirit AB, the owners of Absolut vodka, is delivering where it counts just five years after its creation.
    Although sales and earnings are privately held, Future Brands recently reported volume sales of 20 million 9-liter cases in 2005, reflecting the growth and continued sales performance of Jim Beam Brands' line of DeKuyper liqueurs, super-premium Level vodka, and its Jim Beam bourbons. This legendary bourbon brand, which now includes Jim Beam White, Jim Beam Black, and small-batch, super-premiums Knob Creek, Booker's True Barrel Bourbon, Basil Hayden and Baker's Bourbon, posted sales of 3,175,000 9-liter case sales in 2004, reversing a slight dip in 2003 sales to earn a spot on Adams' Comeback Brands Distilled Spirits list.
    Look for sales to rise significantly higher in 2006 on the strength of its Sauza tequila, Maker's Mark and Courvoisier spirits portfolio acquisitions from the Allied Domecq buyout.
    And living up to its name and it outgoing reputation on-premise, watch for Future Brands to offer new super-premium brands in 2006, as well, including Starbucks Liqueur, a joint venture with the Starbucks coffee brand, and Sauza Hacienda.

Heaven Hill

Bourbon and Branching Out
    Like a number of American spirits companies, bourbon has figured prominently in the success of Bardstown, Ky.'s Heaven Hill - the largest, independent, family-owned distiller still doing business in the United States - since its founding in 1934.
    There's the legendary Evan Williams, introduced by Heaven Hill in the late 1950s and now the best-selling bourbon in the country. Other bourbon brands that have added significantly to the coffers of Heaven Hill over the years include favorites such as Elijah Craig and Old Fitzgerald. Indeed, the sales success of both Evan Williams and Elijah Craig now have reached super-premium status with the introduction of Evan Williams Single Barrel Bourbon, Elijah Craig Small Batch Bourbon and Elijah Craig Single Barrel Bourbon.
    Yet, for all the attention that Heaven Hill has paid to its bourbon origins, the company in place today is not the Heaven Hill that existed even as late as 25 years ago.
    First of all, the modern-day distiller is now paying as much attention to on-premise sales as it long has paid to the off-premise market. Since the early 1980s, Heaven Hill also has been aggressive in diversifying its spirits portfolio. It branched out to acquire Henry McKenna bourbon in a deal with Seagram's in the early 1990s, added Burnett's Gin and then acquired Dubonnet and Christian Brothers from United Distillers.
    This diversification has resulted in rising sales. Its Burnett's and Aristocrat vodka brands both are listed among Adams' Established Growth Brands, and its Hpnotiq liqueur was the No. 2-ranked Rising Star in Adams for 2004.

LVMH-Möet Hennessy Louis Vuitton

Here's to Old Alliances and New Spirits
    Since 2005, French conglomerate LVMH-Möet Hennessy Louis Vuitton has sought to raise its presence in North America with its Möet Hennessy USA division that resulted from the merger of Schieffelin & Co., Millennium Import  and Cliquot Inc.The venture into North America for the company also known for  its Louis Vuitton luggage and Christian Dior fashions, brought with it respected brands such as Dom Perignon, Veuve Cliquot, Chopin Vodka, Hennessy and Belvedere Vodka.
    The successful launches of its Chopin  and Belvedere vodkas, in particular, have pumped up Möet-Hennessy fortunes. Its Belvedere Vodka has established itself as an established growth brand in Adams Wine & Spirits Industry Marketing 2005, with 440,000 9-liter case sales in 2004.
    With a nod to the size of the U.S. market, Möet-Hennessy recently launched its first two Belvedere Vodka flavor extensions with Belvedere Cytrus (pronounced Sit-troos) and Belvedere Pomarancza (pronounced Poe-ma-rahn-cha), two noble spirits out to reclaim the higher profit ground for the flavored vodka category. The two super-premiums were created by Millenium Import Co. LLC at a cost of $2 million.

Pernod Ricard

Year of the French
        With French and American roots, Pernod Ricard has risen to become the leading spirits company in Europe and No. 2 in all the world since its founding in 1975.
    Along with a decentralized management philosophy that has made it fast on its feet in making decisions, key acquisitions have speeded Pernod Ricard's relatively fast track to the top. In 1980, Pernod purchased Austin, Nichols & Co., an American purveyor of coffee, tea and spirits founded in 1855. In 2002, Austin, Nichols became Pernod Ricard USA after it acquired more than 39 percent of the portfolio of Joseph E. Seagram & Sons.
    Yet, it is Pernod's joint acquisition of Allied Domecq with Fortune Brands in mid-2005 that has positioned it to top its $4.4 billion in global sales reported for 2004 by boosting an already premium-heavy portfolio with proven additions such as Malibu and Stolichnaya.
    Pernod Ricard products currently among the world's established growth brands include Wild Turkey, Stolichnaya and Malibu, giving it a premium sales heft across the bourbon, vodka and rum categories. Its Jameson Irish Whiskey and Jacob's Creek wines are listed among Adams' Fast Track Brands, and it  Seagrams Vodka is No. 1 on Adams' Rising Star ranking. Two more, Chivas Regal and Courvoisier, made Adams' Comeback Brands list of spirits in 2004 by fully reversing sales declines posted in 2003.

Sidney Frank Importing Co.

The Spirit at Heaven's Gate
    Flush from its headline-grabbing sale of its Grey Goose vodka brand to Bacardi last year for just under $2 billion, Sidney Frank Importing Co. epitomizes the rewards inherent in being one of the best, not just one of the biggest, spirits companies around.
    Even without  Grey Goose, Sidney Frank posted annual sales of $275 million in 2005.  Sidney Frank's Jägermeister sales bested even those of Grey Goose on Adams' Fast Track Brands list for 2004, coming in second only to Skyy vodka at 1,800,000 9-liter case sales.
     At present, Sidney Frank's  wine and spirits portfolio includes Gekkeikan Sake, Plum Wine, Gekkeikan Haiku, Genofranco Wines and Corozon Agave Tequila, among many others.
    Corozon won a place on Adams' Rising Star Distilled Spirits list in 2004, posting a sales jump of 40 percent over 2003.
    Despite the passing of its widely respected founder, Sidney Frank, look for the company to continue to do what it does best in 2006. The company plans to keep its Jägermeister promotions on-premise on the cutting edge, and it also will be bringing new products such as Zipang, a sparkling sake, to market.

Skyy Spirits LLC

Profit To The Wild Blue Yonder
    Anyone in search of a monument to the stellar sales success of premium brand vodkas in the past decade will find it readily in Skyy Spirits LLC, a subsidiary of Milan, Italy's Gruppo Campari, with U.S. headquarters in San Francisco.
    This second-largest and fastest-growing premium vodka brand was the No. 1 spirit on Adams' Fast Track Brands list in 2004, with sales that have almost doubled in five short years, from 1.1 million 9-liter case sales in 2000 to approximately 1.9 million last year. Skyy's line of flavored vodkas, Skyy Orange, Melon, Berry, Vanilla, Spiced and Citrus, as well as its recently launched Skyy 90, represent the hottest brand in the hottest and most competitive spirits category of all.
    As an autonomous business unit with annual sales of $250 million, Skyy would represent one of the best-selling and most successful spirits enterprises in and of itself. Yet, as a division of Gruppo Campari, it is  part of a $1 billion global company.
    Perhaps more than any other modern spirits company, Skyy Spirits exemplifies innovation with a cutting-edge culture by virtue of its distinct cobalt blue bottle and the purity of its distillation process. Its prowess at grassroots marketing has further strengthened Skyy's appeal among patrons.
    Although its portfolio is heavy with premium vodkas, it now also includes brands from other categories, including Martin Miller's London Dry Gin, Cutty Sark Scots Whiskey, Gran Centanario tequila, Cinzano and Ron Matusalem rums. NCB