Over the last couple of decades, the vodka industry has worked very diligently to make itself a successful subset of a much more vast alcohol industry. But vodka sales have been a growing portion of the alcohol industry over more recent years. Although international preferences have been changing, vodka has been at the top of consumers’ lists when it comes to staple “adult beverages”. In the United States, the top ten vodka brands saw revenue growth of 2% in 2014. It is evident that vodka is growing and here are a few reasons perhaps to explain why.
Smaller Producers Are Realizing Larger Growth Potential Than ‘The Big Boys’
For one, there are many new companies coming into the market. If there is an industry that sees consistent growth annually, then it is not a surprise to see many new companies entering the market to take advantage of the profitability. While it is true that competition actually works to lower the revenue and market share of bigger vodka companies such as the Smirnoff Vodka brand or Pernod Ricard’s Absolut, these small companies have seen huge success and have attributed to the growth of the overall vodka market as a whole.
Investors Need To Know About ‘The Craft’
Another reason is that there seems to be consumer preferences over craft cocktails as well as craft beers. As a result, many smaller brands have been able to find profits by marketing themselves as premium drinks. This large consumption of craft cocktails and spirits have led to a continuous growth in the vodka industry. For instance, flavored vodkas have been extremely successful over the last two years. This intake of flavored vodka has helped the industry grow in the last two years. These craft products have found themselves popular among millennials, who keep the vodka industry a fresh product in the mind of the market. Outside of flavors, the overall craft segment is drawing much more attention. Bloomberg Business reported that American millennials are fleeing to smaller, craft brands, and the world’s largest vodka producers are actually struggling to retain market share.
And it’s not just the brands themselves that are helping to buck the trend. Smaller producers are winning the battle when it comes to “thinking outside the box,” or more specifically, the bottle design. Affinnova, Inc., a global marketing technology company, found that with unique bottle designs, including bold elements and colors, younger brands are becoming more effective at grabbing and holding consumer attention on shelf, dramatically outperforming the industry average. By contrast Smirnoff and Stolichnaya – brands with decades of brand equity – are more likely to be overlooked by consumers on shelf. As an example, Absolut’s bottle design is succeeding in positioning the brand as “fun, friendly and approachable” among consumers 35 and older. However, it’s less effective with 21-34 millennial drinkers.
A brand that may have it all has just hit the us market, BiVi, praised for its one-of-a-kind hand crafted Sicilian vodka has been well received not only for its celebrity endorsement from A Bronx Tale’s Chazz Palminteri but also for the unique bottle design represented by the traditional grappa bottle packaging. Publicly traded under Iconic Brands, Inc. (OTCMKTS:ICNB), BiVi is anticipated to be well received by millennials and vodka aficionados alike. In addition, the new brand entry into the US market could present a very strong opportunity for investors looking to get in on the trend of craft vodka growth. Furthermore it could even present a value proposition for those looking at a “buyout” play with companies like Diageo plc (ADR) (NYSE:DEO) and Constellation Brands, Inc. (NYSE:STZ) in the hunt for a strong hand in this segment.
Vodka Market Growth Has Savvy Investors Planning Their Attack
The intake of vodka and the growth of the industry has always been an international effort. Russia is the country best known for vodka and has always been a high consumer of vodkas. The increase of domestic premium vodkas in Russia helped increase Russian consumption. According to DISCUS, vodka has also made itself a name in the United States spirits industry, counting for 30% of all spirit sales. In the United States, there are over 150 flavors and lines that have been entering the market. As a result, each new product has been experiencing consistent growth. In addition, Canada has also been seeing growth in the vodka market. Vodka has also overtaken whiskey as the biggest spirits volume category in 2010. This has not changed since then. Countries all around the world have been seeing growth and contributing to the overall growth of the vodka industry.
Eanings Review: Rambus Inc. (NASDAQ:RMBS), Revlon Inc (NYSE:REV)
Revlon Inc(NYSE:REV) +2.5% after-hours after announcing that President and CEO Fabian Garcia is stepping down “to pursue other opportunities,” and Executive Vice Chair Paul Meister will oversee operations on an interim basis.
REV also says it expects Q4 revenues of $785M, below $801M from the year-earlier quarter but ahead of analyst consensus estimate of $743M, and a $60M-$80M net loss for the quarter due to a charge related to the recent tax law changes.
REV expects Q4 adjusted EBITDA of $110M-$115M vs. $115M analyst consensus.
CFO Chris Peterson also denies rumors that the company is considering a material asset transfer that would shield assets from lenders.
Rambus Inc.(NASDAQ:RMBS) shares are down 5.5% aftermarket following Q4 results that beat revenue estimates and met on EPS. In-line Q1 guidance (under ASC 605 accounting change) has revenue from $94M to $100M (consensus: $100.38M) and EPS from $0.17 to $0.23 (consensus: $0.18).
Revenue breakdown: Royalties, $77.9M (+10% Y/Y); Product, $8.5M (-27%); Contract and other revenue, $15.5M (+2%); Licensing billings, $76.6M (+18%).Key metrics: Non-GAAP operating margin, 31%; total operating expenses, $67.5M; cash and equivalents, $172.2M; cash flow from operations, $33.3M.
ADTRAN, Inc. (NASDAQ:ADTN) Hits New Lows After Issuing disappointing Earnings Forecast
ADTRAN, Inc.(NASDAQ:ADTN) slumped to a 52-week low after forecasting below consensus guidance for Q4, revising its revenue estimate downward to $125M from $155M-$165M earlier and seeing EPS of ~$0.01; analysts had expected EPS of ~$0.14 and revenue of $161.2M.
ADTN also projects Q1 to come in at roughly the same as Q4, misses analyst consensus of $167.5M.
CEO Tom Stanton says Q4 results have been hurt by a merger-related review, which ADTN expects to be completed in 60-90 days, and slowdown in the spending at a domestic Tier 1 customer.
MKM Partners analyst Michael Genovese believes the customer is CenturyLink (CTL -2%), which accounted for 24% of ADTN’s total sales in 2016.
The analyst thinks the weakness should prove temporary, adding that ADTN’s performance likely will accelerate into 2019 as the company stands to benefit from 5G spending; MKM trims its ADTN target price to $25 from $27 but keeps its Buy rating.
Big IPO Coming: Celator Pharmaceuticals Inc(NASDAQ:CPXX), Moleculin Biotech’s (MBRX)
Today at 10am Eastern, Moleculin Biotech ticker symbol MBRX will debut on the Nasdaq stock exchange and is being considered as one of the most highly anticipated IPO’s of 2016 by the street. The excitement and anticipation is arising from many experts saying that Moleculin Biotech’s (MBRX) drug annamycin is far superior to Celator Pharmaceuticals Inc(NASDAQ:CPXX) drug daunorubicin.
CPXX which has been bought out by Jazz Pharmaceuticals plc – Ordinary Shares(NASDAQ:JAZZ) for $1.5 Billion Dollars last week, share price ran from $1.6 to $31 in 2 months. Moleculin Biotech’s share structure is a 1.5m public float Priced at $6.