Plant Power report (OTLY)
According to Instacart’s “Plant Power” report, one in three of its customers has purchased plant-based meat or milk product. Plant-based meat sales grew 42% YOY in 2020 across Instacart’s customers. The fastest-growing alternative meat brands were Impossible Foods, Alpha Foods, Franklin Farms, Sweet Earth, and Earth Grown. Plant-based milk sales grew 27% in comparison. The fastest-growing milk and creamer brands were Laird Superfood, Simply, Nutpods, Planet Oat, and Moola Organic. Instacart said its oat milk purchasers were younger than conventional milk buyers, but its soy milk buyers were older. Instacart said if 100 customers added a plant-based item to their cart for the first time, 20 chose almond milk, 17 chose dairy-free cheese, five chose tofu, five chose veggie burgers, four chose oat milk, three chose dairy-free yogurt, three chose almond butter, and two chose coconut milk. Instacart noted some regional differences for plant-based milk, with the Northeast indexing higher in oat milk, the Pacific Northwest indexing higher in coconut milk, the West and Southeast indexes higher in pea milk, and the Midwest, Mid-Atlantic, and part of the South indexing higher in soy and almond milk. Almond milk is currently the dominant plant-based milk currently, but we expect oat milk to overtake almonds in the coming years.
Produce prices rise into Memorial Day weekend (ACI)
Fresh produce prices are at the highest price for the 21st week of the year (the week headed into Memorial Day weekend). The following chart is a composite of numerous fresh produce items. Higher wages, freight costs, and assorted shortages contributed to the inflationary pressures. Strawberry prices hit $2.11 per pound for the week, exceeding the previous record price of $1.36 per pound driven by robust demand. Fresh produce is one of the highest margin departments in a grocery store. The increased sales velocity during the pandemic led to gross margin expansion for the grocers due to less spoilage. This year sales velocity will be lower while inflationary pressures increase, switching the margin tailwind to a YOY headwind.
Retail wine sales fall (BSPE)
Retail off-premise sales of wine reached $1.5B in April with a volume of 15,200 cases. Wine sales fell 15% in April, decelerating from -12% in March in the off-premise channel, as seen in the chart below. Volumes fell 20% in April, decelerating slightly from March. The comparisons ease going forward. Wine bottles priced over $20 continue to perform well, with sales growing against the pandemic comparison. The average price of a 750 ml bottle increased to $11.70 compared to $11 last year, with the outperformance at the higher end. Constellation Brands (STZ), Vintage Wine Estates (BSPE), and Duckhorn (NAPA) all focus on higher-priced wine above $10 per bottle.
