Spirits sales best over two-year basis (VWE)
Off-premise wine sales continue to decline compared to 2020 but are up compared to 2019, as seen in the charts below. According to NielsenIQ, the total value of wine sold over the two weeks ended June 5 (Memorial Day period) was down 11% compared to 2020, but 14% higher than 2019. In March and April 2021, the total sales of spirits were down 5% YOY, while beer was down 6% and wine was down 11%. Compared to 2019, spirits sales were up more than 30%, while beer and wine were about 17.5% higher.
DTC wine shipments fell 13% in May, but the value of shipments was 4% higher, boosted by higher-priced wine club shipments. In the DTC channel, shipments are up by more than 25% in value and volume compared to 2019. Bottles priced at $20 and below are down YOY, while bottles over $50 are up double digits.
Delicato Family Wines has agreed to acquire Francis Ford Coppola Winery at an estimated $500M to $1B range. The acquisition will add 1.1 million cases of volume above the $10 per bottle price range. Delicato is the fifth-largest wine supplier in the U.S. at roughly 17 million cases before the acquisition. Robert Nicholson of International Wine Associates has represented sellers of West Coast wine brands for decades, said, “It’s a transformational deal, and there will be more of these similar-type larger deals coming.”
We expect Vintage Wine Estates to be active in M&A in the sector, but Francis Ford Coppola Winery was too big of a target.
All about the food comparisons (KR)
According to the USDA’s report from the ERS Food Expenditure Series, spending at restaurants, school cafeterias, sports venues, and other eating out establishments fell from $68B in February 2020 to $54B in March 2020 and $35B in April. By December 2020, spending rose to $59B. Inflation-adjusted spending on food away from home in April 2020 was 51% lower than the prior year. Even by December 2020, spending was 21% lower YOY. Combined with food at home, total food spending in December 2020 was 8.8% lower than in December 2019.
For grocery stores, supercenters, convenience stores, and other retailers spending increased 25% to $63B in February 2020 and $79B in March. By October, spending had slowed to $73B. By April 19-25, 2021, lapping the pandemic, retail food sales were lower compared to the same week in 2020 in every category except beverages and prepared foods. Still, compared to 2019, retail food sales were 18.5% higher. Compared to the same week in 2019, spending was higher in every food category, especially in the meat department. In addition, retail food prices were higher in April 2021 than the previous year for all food categories except eggs.
E-Commerce demand ticks up (DASH)
E-commerce CPG demand increased 11% YOY for the four weeks ended June 13, as seen in the chart below. Demand accelerated from the previous four-week period, which was up 2%. The edible category demand grew 13% YOY, while the non-edible category grew 10%. The frozen category was the weakest edible category, with a growth of 5%. On the other hand, beverages were the strongest edible category with a growth of 19%.
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