A letter from the CEO…
The year is drawing to a close and needless to say, that in the world of ethanol and spirits it has been quite a rollercoaster ride with political, trade embargoes and regional conflicts and uncertainties. Let’s reflect on what’s happened in 2019.
Firstly, we would like to wish all our customers, suppliers and partners a Merry Christmas and Happy New Year. Thank you for your support this past year and we will look forward to another great year together.
In 2019, Ethimex has been busy on new product development (NPD), with a lot of effort going into organic ethanol, grain ethanol, rum and organic rum produced in EU. Over in our Cask Solutions division, our head honcho Richard has been busy with cask sourcing and developing bespoke offerings to support our customers and our growth (if you want to stay update, be sure to check out the cask blog).
With the gin market still growing strong in the UK, so has our botanicals business. Botanicals have also been successful with several blue-chip companies approving us.
Looking at our overall business, our UK distribution goes from strength to strength as we continue to create a comprehensive service package for our customers. Not only do we have our own Movement Guarantee but we have also implemented a return IBC option. This is great news as we look to do our part to create a more environmentally friendly business but also to all our partners who also have the environmental and sustainability a key part of their practice (recycling your heads-and-tails is also a great way to help reduce your distilleries environmental footprint).
We can’t mention UK business without mentioning Brexit but we are pleased to say that so far Brexit not impacted our EU/UK activity. The key EU markets have seen some volume increases with demand growing for rum, grain alcohol and organic products, our sales held up well.
In the event of our departure from the EU any consequences that are most likely to happen have been factored in, but the real test will be over the next 12 months as the trade deal is negotiated. Even with Brexit ever looming on the horizon, we are happy to report that the UK market looks dependable and we have a lot of NPD in a range of products that should keep us busy over the next year.
However, we can’t reflect as positively as we would like on the Middle East and Asia market. 2019 has been a difficult year, due to ongoing regional uncertainties, the wider impact of the USA/China trade dispute, Hong Kong troubles and ongoing tensions in the Middle East. Our core markets and customers have continued to take volumes, Pakistan remains the single largest supplier but with a proliferation of new entrants and a lack of supply alternatives this has driven down prices.
The USA has seen another solid year of growth with the bourbon boom continuing, and tequila, rum, gin, scotch whisky all looking good. There is some consolidation in the craft beverage segment, but the big disrupter being the Hard Seltzer’s segment with brands like White Claw, taking a chunk from beer sales and could also be taking sales from spirits. We already see some evidence of this trend In the UK and US market with the increasing popularity of no and low-abv alcohol (keep an eye out for next months post on hard seltzers if you want to know more).
Needless to say, 2019 has been an eventful and interesting year and we expect 2020 to bring us even more interesting developments. Be sure to check out our website and LinkedIn to stay up to date with the latest news and updates.
Happy holidays and a very happy new year to all!
Yours sincerely, Charles Edge
