Restaurants
BYND C-suite ?? are back
BYND is a SHORT
Last year BYND's CFO departure was oddly timed, and now we have the COO stepped down this week, announced Thursday, less than two years after his arrival. The company did not state a reason for the departure in the 8k. However, the company did note that COO Sanjay Shah notified the company on Monday that he was stepping down immediately. Shah arrived in September 2019 from Tesla Inc. TSLA, where he had been in charge of the electric-car company's solar efforts for less than two years before leaving. Before that, Shah spent more than seven years at AMZN. As COO of Beyond Meat, he was in charge of global operations and production, an essential role for the meat-alternative company as it attempts to scale its food products. When Beyond Meat hired Shah in 2019, he received a stock package vested over the first two years, with half vesting at the end of one year and the rest quarterly through his second year, which would have ended this month. Currently, the vice president for North American operations, Jonathan Nelson, will step in the role as the company will search for a replacement.
Consumer Staples
BUD sues STZ again (STZ)
Anheuser-Busch InBev has filed its second lawsuit against Constellation Brands. This time AB InBev sued over Constellation’s launch of two Modelo Reserva beers. One beer is aged on tequila, and the other is aged on bourbon barrels. The lawsuit says U.S. and Mexican laws strictly limit the use of the word tequila. AB InBev said Mexico’s Tequila Regulatory Council also demand Constellation Brands cease its use of the word tequila. It also says Constellation’s license to sell Mexican-style beer does not allow it to sell bourbon flavor because it has nothing to do with Mexico. In February, AB InBev sued Constellation Brands for violating the license agreement because of the launch of Corona Hard Seltzer. AB InBev is clearly taking legal steps to narrow its U.S. licensee’s product extensions into adjacencies. With Modelo Especial moving into the #2 for U.S. market share AB InBev is taking a different approach to the licensee it chose. The new Modelo product launches were never destined to be as large as Corona Hard Seltzer. Still, Constellation Brands is unlikely to stand down when its innovation adjacencies are hemmed in.
Hard seltzer innovation pipeline (SAM)
For the four-week period ended August 8, off-premise sales of hard seltzer grew 5.4% YOY. That represents a deceleration from the 11.1% growth over the 12-week period. That growth slowed further to -0.4% for the four-week period ended August 14. Truly’s sales grew 20.4% over the four-week period and 29.6% over the 12-week period ended August 8. White Claw, in comparison, decreased 8.6% over the same four-week period and -8% over the 12-week period. Truly’s newest launches like Iced Tea and Punch continue to cannibalize sales of its older SKUs, including the lemonade variety pack down 12.5%, berry variety pack down 19.3%, tropical variety pack down 25.8%, and citrus variety pack down 48.9% all over the four-week period ended August 8. C-stores is where Truly is seeing a lot of growth, with sales up 82.5% YTD through August 8, but C-stores had the easiest comparisons for off-premise retailers, especially earlier in 2020, and are increasingly becoming more difficult.
To stay on top of innovation, Truly’s Holiday Party Pack, which will roll out on November 1, features four cocktail-inspired flavors, including Cran Orange Sparkler, Pom Ginger Fizz, Holiday Sangria Style, and Spiked Apple Spice. Bud Light Hard Seltzer’s Fall Flannel pack (available next week) will include Pumpkin Spice, Toasted Marshmallow, Maple Pear, and Apple Crisp. The flavors may taste good, but they sound like Yankee Candles or pies. That may be a sign that the biggest flavor innovations are now behind us.
Wine sales lag (VWE)
Wine sales in the off-premise channel tracked by Nielsen have lagged spirits and beer in 2021. From March 6 through August 14, total wine sales in dollars were down nearly 10% YOY. In comparison, spirits sales were down 4%, and beer was down 6%. By volume, wine sales were down by more than 14%, while spirits were down 6%. Compared to 2019, spirits sales were up more than 30%, while wine grew 15%, and by volume, spirits grew 25%, while wine was up 5%.
DTC wine shipments have been more resilient despite lapping difficult pandemic comparisons. DTC shipments in dollars in July were up 18% YOY and were up 53% compared to 2019 (with volumes up 45%). The average price per bottle in DTC grew 17.8% to $33.41, while it grew 3.7% to $11.79 YOY in the retail channel. Wine sales have shifted to on-premise from off-premise, just like beer, but what is promising for the wineries is the continued growth in DTC. Vintage Wine Estate's revenues are roughly evenly split between DTC, B2B, and wholesale, which gives it more diversification than its peers.
