Displayed on the salad shelf (Dole)
Dole is expected to go public later this week at a $2.1B valuation. One of the company’s key growth drivers is its fresh vegetables business. It comprises fresh-packed vegetables and value-added salads (salad kits). The market for those products has grown at an 8.4% CAGR over the past three years. Dole’s Chopped! The line has grown 81% since 2016. The company is ranked second in the U.S. market share with over $1B in proforma revenue. Dole primarily sources its products from North America. Many of the indoor grow startups have targeted growing green leaves used in salads. They market their product based on growing indoors more sustainably. Dole has shown marketing convenience, and taste is a larger market. AeroFarms has developed an attention-grabbing display of leafy greens in the grocers, but it can still learn from the company it is trying to disrupt.
Beer sales slow (SAM)
Off-premise beer sales declined 5.1% for the week of July 4th compared to the prior year but grew 7% compared to 2019, according to NielsenIQ. During the two-week period ended July 10, off-premise beverage alcohol sales decreased 4.8% YOY but grew 11% compared to the comparable period in 2019. Core beer sales decreased 7% YOY and decreased 2.7% compared to 2019. Premium light beer sales decreased 9.2% vs. 2019 and below premium beer sales decreased 13.9% vs. 2019. Craft beer sales decreased 1.9% vs. 2019, cider decreased 7.9%, and FMBs decreased 3.6% compared to the same period in 2019. Mexican imports increased 6.3% YOY and 9.4% compared to 2019. As a result, the Mexican import share increased by 0.4 share points. Hard seltzer share reached 13%, with off-premise sales growing 9% YOY and 189% over 2019. However, hard seltzer’s growth has slowed dramatically in recent months as the ebbing of the pandemic changes trends.
South Africa lifts alcohol ban (BUD)
The South African government lifted its fourth ban on alcohol sales on July 25th. The ban was due to end on July 12th, but it was extended for two more weeks as COVID-19 cases continued to rise. Bars now have a 9 PM curfew. Retailers are allowed to sell alcohol for off-premise consumption between 10 AM and 6 PM Monday through Thursday. During the political unrest, warehouses and retailers were increasingly targeted for alcohol. Not only were businesses not allowed to sell alcohol, but many lost all of their inventory. The alcohol industry is also concerned about the illegal market, which has made inroads with each ban. To support the industry, the government is allowing the deferral of excise taxes for three months.
South Africa’s previous bans on alcohol were from March 27 - June 1, July 12 - August 17, and mid-December – February 2021. According to Euromonitor, South Africa’s illicit alcohol industry has grown at a CAGR of 17% since 2017 and has reached 22% of total market volumes. South Africa is the 12th largest beer consumer globally, and AB InBev has nearly 90% of the formal market share. South Africa also had the most COVID-19 infections and deaths on the continent.
