• 🦊 Foxtrot Asking For Forgiveness?
• 🐉 Aura Bora Sunsets Two OG Flavors
• 🏗️ Coffee Beans To Coffee Bricks
• 🤝 ForceBrands, Bain's Insurgent Brands Network

The earnings results are in from major food and beverage companies, and apparently consumers are skipping out on happy meals and tequila, which might also be why luxury goods group LVMH has blamed low champagne sales on our… collective sadness? Here’s a closer look at the trends we’re seeing across spirit companies.

Overall, the expensive spirits (which saw a spike during the pandemic) have lost steam as consumers tighten their belts. Stock ordered after those luxe buying sprees has been gathering dust, and analysts are still weary on how the inventory build-up will improve. 

Cognac, which has been struggling since the pandemic, saw a little better of a performance by Hennessy this quarter with retailers cautiously reordering. On the other hand, Rémy Cointreau reported a 15.6% decline in sales for Q1 of FY24/25. The company may need to diversify or lean on its other spirits like Cointreau and The Botanist gin (which just upped the proof for a bartender-focused line, a different strategy in the time of no and low!) 

Equipped with a much more balanced portfolio, Diageo is still facing the consequences of that sticky inventory problem, particularly in its second biggest market, Mexico. The group announced its first annual sales drop since the pandemic yesterday. The build-up in Latin America caught Diageo by surprise last fiscal year, and its slow reaction in Mexico and Brazil is now weighing on the group as consumers in Mexico opt for “local spirits” and cheaper drinks.

Meanwhile Jose Cuervo owner Becle has also reported revenue losses in its domestic market (-10.7%) and slower U.S. volumes. There are still pockets of premiumization and downtrading in the U.S. when it comes to tequila: Casamigos faced a 22% drop, and the Diageo tequila portfolio – which has been the group’s growth engine – is now reliant on Don Julio. But Don Julio’s Reposado is driving that line, showing that people are buying the higher-end aged stuff while looking for cheaper options on the blanco shelf. Campari, for example, just reported double-digit sales of Espolón in the first half of the year (about $10 cheaper than Casamigos). 

The bright spots? While tequila is holding up dollars, innovation in flavor is bringing in new customers, like Diageo’s Buchanan’s Pineapple and Cîroc Limonata. RTDs, of course, are also driving growth for spirits, but that puts some serious pressure on the mother spirits to make up sales in the holiday season. Hopefully we’re not still sad by then?

Go Deeper: Diageo Reports First Full-Year Losses Since Pandemic

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Foxtrot is readying to reopen a few of its doors and rebuild relationships with its former team members, supplier brands and customers, according to a post this week.

❌ The c-store chain, which abruptly closed in April and whose assets were repurchased by its founder shortly after, said it will use its “resources and passion to highlight local brands, and build their business alongside ours.”

🗣️ “The decision to shut down Foxtrot, and to do it so abruptly, was not ours. We believe the old Foxtrot lost its way. In the unnecessary race to be the biggest, it lost sight of why it started in the first place,” the post states.

🕓 Now, the company said it is returning to its original concept with store reopenings planned for the Chicago market. The post did not provide an update on the timing for the reopenings.

Sparkling water brand Aura Bora announced this week it will begin the process of sunsetting two of its original flavors: Peppermint Watermelon and Lemongrass Coconut.

🥥 The two SKUs are a part of the five-year-old brand’s original lineup, which has since grown to over a dozen different flavors in addition to a constant flow of LTOs. 

🍉 The decision to discontinue these two varieties was made in order to open up production line time for the brand’s growing lineup, according to a post about the decision, including its newly released Watermelon Chili flavor. 

🗣️ What they said: “When we started Aura Bora 5 years ago, we knew these flavors were special, unusual combinations we’d never seen anywhere else in the world of sparkling water. They are the reason so many of you curious humans discovered Aura Bora.”

Recruiting firm ForceBrands is now working with Bain & Company to launch an “invitation-only brand network,” dubbed the Insurgent Brands Network for emerging CPG companies.

✨ The partnership makes use of Bain’s Insurgent Brands research to ID fast-rising companies with at least $25 million in revenue from conventional grocery. According to the release, Once Upon a Farm is one of the first brands to join the program.

🗣️ What they said: “Brands identified as Insurgent Brands are at critical inflection points on their growth journey. They’re looking at strategic talent, organizational structures, and leadership to take them to the next level. We’re thrilled to bring together the founders and executives of these high growth companies to create a network where as peers they can share valuable insights, benchmarks, and experiences.” – ForceBrands CMO Julie Fabricant

If you’ve found yourself wondering what to do with spent coffee grounds from your morning brew, fret not. Australian engineers have developed a method to make concrete 30% stronger with used coffee grounds which would be otherwise destined for a landfill.

☕ As part of the study, researchers at the Royal Melbourne Institute of Technology (RMIT) converted spent coffee grounds to biochar through a low-energy, oxygen-free environment at 662°F, then added it to concrete mixtures.

🤔 According to the engineers, coffee waste may be able to replace sand in traditional concrete mixes, reducing the extraction of natural sand from water banks and beds. 

💭 “There are critical and long-lasting challenges in maintaining a sustainable supply of sand due to the finite nature of resources. With a circular economy approach, we could keep organic waste out of landfills and also better preserve our natural resources like sand,” the study reads.