Beer imports accelerate (STZ)
Total alcohol beverage imports grew 12% by value over the last 12 months ended June, as seen in the chart below. Over the last three months, imports accelerated to 48% growth. 35% of all imported beverage alcohol by value came from Mexico over the last 12 months. Total beverage alcohol exports decreased 1% by value over the last 12 months and grew 27% over the last three months. 26% of all exported beverage alcohol went to Canada over the last 12 months.
Imported beer grew 18% by volume and 21% by value over the last 12 months. Over the last three months, imports accelerated to 43% growth by volume and 47% by value. For the last three months ended in May, imports in comparison grew 27% by volume and 31% by value. 73% of imported beer by value comes from Mexico. Exported beer grew 112% by value over the last three months and 45% over the last 12 months. Constellation Brands represents a majority of Mexican beer imports and 60% of imported beer. The latest three months indicate growth in price/mix. Constellation Brands is now lapping the shutdown of production at its plants last year, driving the strong YOY growth.
Imported packaged spirits grew 54% by value over the last three months and 12% over the last 12 months. Imported packaged wine grew 54% by value over the last three months and 8% over the last 12 months.
New Coca-Cola Zero Sugar launch (ZVIA)
Yesterday, Coca-Cola launched an advertising campaign across social media, radio, TV, billboards, and bus stops to promote the new Zero Sugar formulation. The new Coca-Cola Zero Sugar ingredients are the same as the previous version, but the company says it tastes better and more like the original classic flavor. The packaging is also closer to the classic look.
Reformulating Zero Sugar does not have the same risks as reformulating the Classic Coke or even Diet Coke because Zero Sugar’s goal has been to be close to the classic flavor. Coca-Cola’s real aim is to convert more Classic drinkers to sugarless versions to get ahead of the war on sugar. Coca-Cola and PepsiCo have largely ceded Stevia to other soda brands unless they launch new brands. This provides Zevia with a moat for the time being to market itself as plant-based and natural.
C-store driving off-premise growth (SAM)
The convenience store channel has largely driven the off-premise growth in the beer category once the pandemic was anniversaries. In the first couple of months of the pandemic, driving was down the most due to restrictions and working from home. As a result, it took some time for the convenience store channel to see a recovery in miles driven and traffic.
Within the convenience store channel, hard seltzer has grown 36% for the YTD period ended July 24, according to NielsenIQ. Imported beer grew 6%, FMBs grew 2.5%, and super premiums grew 1%. For FMBs, all of the YTD sales growth in the off-premise channel is through the C-stores. For hard seltzer, 57% of the YTD sales growth in the off-premise channel has been through the C-stores. For imported beer, 80% of YTD sales growth has been through the C-stores. For super premiums, the C-store growth has offset declines in retail stores, so it is down 0.8% across all off-premise outlets.
In the future, expect off-premise beer sales to decelerate in the C-store channel as the comparisons become more difficult.
