Plant-based investments (OTLY)
According to the Good Food Institute, investors put $4.4B into plant-based protein startups from 2010 through 2020, with nearly half in 2020 alone. The largest round of fundraising was Impossible Foods’ $500M Series F round. Beyond Meat’s IPO drew a lot of attention to the sector. Eat Just concluded a $200M round in March that will expand its product offering and distribution. Eat Just spent several years proving there was a market for the alternative egg. Now with the growth in the sector, investors are looking for future products. Several early-stage companies develop products in chicken alternatives, seafood alternatives, mushroom-based meat alternatives, and recently plant-based cheese. Even though the Beyond Meat and Oatly IPOs received a lot of attention, the more common exit strategies for the startups have been acquisitions. None of the 10 largest meat companies in the U.S. have acquired a plant-based brand or started one by the end of 2019.
On-premise draft beer (STZ)
According to BeerBoard, which tracks $1B in draft beer sales nationwide, for June 3-6, the percentage of establishments open and pouring beer was 93%, similar to the previous May 20-23 reporting period. The open rate had been 92% for the previous six reporting periods dating back to Feb. 25-28, as seen in the following chart. The 7% that are closed may represent businesses that have closed permanently during the pandemic. Data Essential reports that 10% of the 778,807 restaurants existed before the pandemic closed for good. The restaurant industry gained 186,000 jobs in May, but that is still 1.46 million fewer than February 2020.
Nationally the volume of beer poured compared to 2019 was 37% lower, up slightly from -38% for the previous May 20-23 reporting period. The volume poured ranged from -28% in Nevada and -30% in Texas to -60% in Minnesota and -52% in Illinois. The volume share for imports improved 0.5% to 16.7% while craft fell 0.4% to 33.5% and domestic fell 0.1% to 49.9%.
Disappointing pub reopening (BUD)
The British Beer and Pub Association, which represents the U.K. pub sector, said its survey of members revealed that sales for the first week of indoor reopening were 20% lower than the same week in 2019. Sales of drinks were up 114% above pre-pandemic levels when pubs were allowed to open for outdoor business in April, but indoor reopening has been disappointing. Only 40% of the pubs reopened for outdoor business due to space limitations. The association said that 95% of pubs have now reopened. The U.K. allowed pubs to reopen the week of May 17, but there are restrictions. Pubs are only allowed to offer table service with no standing drinking allowed, the size of groups limited to 6, and one meter of distance between tables in England. The government’s current plan is to lift all COVID restrictions, including for pubs, on June 21. The CEO of Marston’s, which operates about 1,500 pubs, said there is a shortage of EU labor impacting the sector. As we have seen in the U.S., the reopening for bars takes a little time as customers return to their pre-pandemic ways. Reopening in the U.K. is more of a clear positive for the alcohol industry due to the higher on-premise mix compared to the U.S.
