“Like many other companies, we have been incredibly challenged with hiring due to the labor shortage. For example, in Petoskey, Michigan, one of our SpartanNash markets, there was a job fair held in May with 60 employers looking to fill 500 jobs. Only four candidates showed up.” -Tony Sarsam, CEO of SpartanNash 6/3/21
Position monitor changes (BSPE, SAM)
We are making a couple of changes within our position monitor, moving Boston Beer higher on the shortlist and Bespoke Acquisition Corp. higher on the long list.
Boston Beer’s guidance for hard seltzer to grow above the 60-90% growth rate that management expects for the category seems increasingly untenable given recent trends. Consumers’ return to their pre-pandemic lifestyles will be a headwind for Boston Beer. Workers returning to their offices will lead to fewer off-premise drinking occasions and more on-premise occasions. With consumers returning to the on-premise channel, consumption in the off-premise channel has fallen off precipitously. Hard seltzer penetration in the off-premise channel is multiples greater than its on-premise share.
Vintage Wine Estates is expected to close on its merger with Bespoke Acquisition Corp. next week. Shareholders approved the merger, and the shares will trade under the new symbol VWE on or about June 7th. Management’s growth plan includes one acquisition each year, but the company is positioned to acquire and integrate a few each year, accelerating the company’s growth.
Grocery demand down 7% (KR)
Total CPG demand in the supermarket channel for the week ended May 16 decreased 7% YOY but improved 3% points week over week. Both edible and non-edible categories were down 7% YOY but improved sequentially. The strongest sub-category of edibles was beverages which were flat YOY. The weakest sub-category of edibles was beverage alcohol which was down 14%. Fresh produce demand was down 6% YOY. Fresh produce demand has been down 5-8% for the past five weeks. Fresh produce demand is a good indicator of home meal consumption levels because it isn’t stored.
The grocery channel has been one of the weaker CPG channels this year, along with dollar stores and e-commerce, while the warehouse club, drug store, and mass retailers have seen YOY increases – a reversal of last year.
Most valuable beer brands (BUD)
Brand Finance ranked Corona as the world’s most valuable beer brand for 2021. Corona is distributed in over 120 countries. In the U.S., Constellation Brands has the license to distribute the #1 import. In the U.K., Corona has become one of the fastest-growing grocery products. Corona’s value declined 28% to $5.8B due to the pandemic. The world’s top 50 brands lost a cumulative value of 16%. Michelob was ranked the fastest-growing brand with 39% growth. Victoria was named the world’s strongest beer brand moving up ten spots. Anheuser Busch InBev owns five of the top ten in the list below. While Anheuser Busch InBev is prevented from owning the Groupo Modelo brands in the U.S., the partnership has been productive from a branding perspective and could be from an innovation perspective. The negotiations over Corona Hard Seltzer should be done outside the courtroom.
