Online grocery purchases fall (ACI)
Online grocery sales fell to $7.0B for May, down 16% YOY according to the Brick Meets Click/Mercatus Grocery Shopping survey. Delivery and pickup sales fell from $6.6B in April to $5.3B in May, as seen in the chart below. Ship to home sales was flat YOY at $1.7B. Online sales in May have retained about 70% of the incremental gains compared to the high in January. 66.8M U.S. households purchased online groceries in May, down 12% YOY. Pickup is still the preferred method for online grocery purchases, used by 55% of monthly active users in May, gaining 4% points from the prior year. 30% of monthly active users (MAU) received orders only through pickup (up to 4% points YOY), while another 17% received online orders only through delivery (up to 2% points YOY).
MAUs placed an average of 2.8 online orders in May, down slightly from 2.9 from the prior year. The share of MAUs receiving grocery orders by delivery grew by three percentage points. Pickup was the delivery method for 37% of orders in May, gaining 5% points YOY. The weighted average order value in May declined 7% YOY. Delivery and pickup spending per order fell 14% to $77. In May, the share of online customers who used both a grocery service and a mass retail service to purchase groceries reached a new high of 29% compared to 15% pre-COVID-19. After growth in March and April, it appeared that online grocery spending could grow despite the difficult comparisons. Now that the industry is lapping less capacity-constrained months and consumers are returning to pre-pandemic ways, online grocery spending looks like it will continue to decline in the coming months. As consumers purchase more than just food, the broader online offering from mass retailers will be a competitive advantage.
On-premise draft beer (BUD)
According to BeerBoard, which tracks $1B in draft beer sales nationwide, for June 17-20, the percentage of establishments open and pouring beer was 92%, down from 93% two weeks prior, as seen in the chart below. The 8% 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 36% lower, up slightly from -37% for the previous June 3-6 reporting period. The volume poured ranged from -57% in Minnesota and -46% in Illinois to -24% in Nevada and -28% in Georgia. The volume share for imports decreased from 16.7% two weeks before to 16.3%. The volume share for craft beer increased from 33.4% two weeks prior to 34.2%. The volume share for domestic beer decreased from 49.9% two weeks prior to 49.5%.
Rockstar hard seltzer (MNST)
PepsiCo applied with the Patent and Trademark Office to trademark its Rockstar brand in the beer and “alcoholic fruit cocktail drinks; alcoholic malt beverages, except beers; hard seltzer” categories. PepsiCo acquired Rockstar Energy in March 2020. Last year management said they were weighing options before entering beverage alcohol. Hard seltzer has remained popular this year, with a market share of 11.3% in the four weeks ended June 5th. The category’s growth may be too big for energy drink brands not to participate. Topo Chico Hard Seltzer was launched in March and quickly grabbed a 3% market share in its first week. The energy drink with the most crossover potential is Monster Energy. Management continues to evaluate the opportunity. The distribution is complicated, but PepsiCo may be joining Coca-Cola in the category providing frameworks for Monster Energy to learn from.
