Prime Day makes inroads into grocery (KR)
On the first day of Amazon’s Prime Day sales event, groceries ranked sixth among categories purchased according to Numerator. 18.9% of shoppers purchased groceries. In comparison, household essentials were the top category, with 29% of Prime Day shoppers making a purchase in the category. 78% of Prime Day buyers did not compare Amazon prices with any other website or store, which speaks to consumers trusting the event for low prices. Amazon-branded products accounted for 32% of grocery purchases. Through the event’s first 32 hours, the average household spend was $92. 78% of the shoppers reported making purchases on Prime Day in previous years. 83% of shoppers said they joined the Prime program before the pandemic, and 10% said they joined after the start of the pandemic. Numerator estimated that Amazon’s market share in groceries gained 30bps to 0.8% in 2020 and gained 10bps in 2021.
The pandemic drove a big shift to food at home spending, benefiting the conventional grocers. However, the pandemic did not create a secular tailwind for the conventional grocers. Food retail will return to being the most competitive sector, and online rivals have made inroads during the pandemic.
Wine sales rise (VWE)
Domestic wine sales increased 23% YOY to $3.9B in May, as seen in the chart below. As the on-premise channel has reopened, overall wine sales have been rising. According to bw166, consumer spending on domestic wine in the 12 months ended May totaled $48.5B while the total U.S. wine market was $69.4B, down 2% YOY. DTC shipments fell 13% in May against the difficult comparison. Compared to May 2019, DTC shipments were up 25% in value and 26% in volume. Vintage Wine Estates is unique in the wine industry, with about a third of sales coming from each of the DTC, B2B, and wholesale channels. That mix allows the company to pursue different strategies while not being overly dependent on one channel.
Beer shipments grow (BUD)
According to the Beer Institute, U.S. brewers shipped an estimated 15 million barrels of beer in May, up 8.9% YOY. May was the largest month of shipments to date. Shipments in 2020 were up 0.6% to 168.4 million barrels. Shipments have grown every month this year. January grew 5.3%, February grew 3.3%, March grew 0.9%, and April grew 8.6%. Through the first five months, shipments have grown 5.4% to 69.3 million barrels. Beer distributors have been reporting strength in orders as the on-premise channel reopens and restocks. There have been numerous indications of out of stocks and low inventory levels, which would lead to shipment growth.
