As sales rebound liquor firms urge responsible drinking

The alcoholic drinks industry is reporting an improvement in sales, badly dented earlier this year by the onset of the COVID-19 pandemic, but even as the industry is in higher spirits over improving volume and income numbers, liquor manufacturing and distribution companies are driving home more messages urging imbibers to drink responsibly.

Stakeholders in Jamaica collaborated recently to mark an inaugural observance dubbed ‘Enjoy Responsibly Day’, even as third-quarter numbers suggest that the worst of the pandemic alcohol sales blow might now be in the rear-view mirror.

“We are seeing some strong recovery, especially in the supermarkets, small shops and groceries,” Red Stripe’s Dianne Ashton-Smith said in a written response to Financial Gleaner queries. This mirrors global sales trends showing a distinct uptick in off-premises alcohol sales as purchases for on-premise consumption remain suppressed by hotel closures and scale-downs, as well as continuing dine-in restrictions on restaurants and bars.

“With COVID-19 containment measures, as you can expect, the hotels, restaurants and bars continue to lag. Overall, we are still ahead of initial expectations, especially (the outlook) at the start of the pandemic,” said Ashton-Smith, the head of corporate affairs at the Jamaican company owned by Dutch parent Heineken NV.

Heineken NV reported in its third-quarter filings that while its worldwide beer volumes overall were still down more than eight per cent over the nine months to June, the third-quarter sales fall-off was in the region of a mere 1.9 per cent, having recovered some ground. Its Heineken-branded beer outperformed other categories selling seven per cent more in the quarter and one per cent in the nine months over the corresponding periods last year.

Sales numbers were not immediately available from leading local spirits company J. Wray & Nephew Limited, JWN, but its Italian parent Campari reported a “positive” third quarter to September.

“Improved overall performance in the nine months, thanks to a very positive third quarter, boosted by the impact of staycation on aperitifs in the peak summer season (and) on-premise recovery in the third quarter in a continued challenging environment, while underlying brand health is confirmed in core markets,” were the highlights of Campari’s global performance. By way of numbers, overall sales picked up nearly 13 per cent in the third quarter moderating big downturns in earlier periods this year to come out at just less than two per cent total global sales decline for the nine months.

By geography, sales in the Americas region, which incorporates Jamaica, made up just over 43 per cent of total global sales and declined by a moderate 6.6 per cent, Campari said.

“Jamaica registered an overall decline of 7.6% due to on-premise closures and reduced tourism flows, amplified by a tough comparison base,” Campari reported in October on its third-quarter performance, noting, however, that there was a more than six per cent growth in the Jamaican rum portfolio in the quarter.

“Positive performance in the third quarter (+8.9%) was largely driven by the solid performance of Espolòn and the Jamaican rums, thanks to strong category momentum,” the company said.

To safeguard and build on the recovery momentum, the local liquor companies are not pushing higher levels of alcohol consumption outright, says Christopher Gentles, general manager of the Spirits Pool Association, the local umbrella rum industry body.

“The entire industry has shifted to a much more mature tone. The focus is no longer on the so-called ‘real man’ drinking a lot of rum, but on a wide range of persons drinking and enjoying beautifully aged rum instead,” Gentles told the Financial Gleaner in an interview.

“Distilleries produce rum for sale and breweries produce beer and the more they sell, the more profitable they are, so there is no need for pretence on our part. However, we are deeply interested in the welfare of our clients, and the short-term nature of encouraging heavy episodic drinking is no longer the model of the spirits industry,” he said.

To underline the upshot of the marketing stance taken by the Jamaican alcohol industry, Gentles points to 2016 country data contained in the World Health Organization’s 2018 Global Status Report on Alcohol and Health, showing a lower incidence of heavy episodic drinking in Jamaica, compared to other countries in the Caribbean and Americas region, including Trinidad and Tobago, Mexico, Panama and the United States.

business@gleanerjm.com