On-premise declines are seasonal (BUD)
On-premise sales velocity in all critical markets tracked by CGA declined week over week for the week ended October 30. The average establishment's sales trends have been slightly negative in recent weeks after seeing growth in September and early October, following typical seasonal patterns. Nationwide on-premise sales velocity increased 46% compared to 2020 and 21% compared to 2019.
In California, sales velocity declined 6% week over week but increased 49% compared to the same week in 2020 and 28% in 2019. Florida had minor week-over-week declines of 3%. Compared to 2020, Florida sales velocity increased 31%, and compared to 2019, sales velocity increased 20%. Illinois sales velocity decreased 10% week over week but increased 108% YOY. Compared to the same week in 2019, Illinois sales velocity increased 8%. New York state's sales velocity declined 7% week over week but increased 76% YOY. Compared to 2019, sales velocity was up 2%. New York City experienced the same weekly sales decline as the state, while Chicago's decline at -20% was twice Illinois's. In Texas, on-premise sales velocity declined 8% week over week but increased 30% YOY and 32% compared to 2019.
Alcohol imports (STZ)
Total alcohol beverage imports grew 16% by value over the last 12 months ended September. Over the last three months, imports were also up 16% by value. 35% of all imported beverage alcohol by value came from Mexico over the last 12 months. Total beverage alcohol exports grew 5% by value over the last 12 months and grew 16% over the last three months. 27% of all exported beverage alcohol by value went to Canada over the last 12 months.
Imported beer grew 15% by volume and grew 17% by value over the last 12 months. Over the last three months, imports grew 1% by volume and grew 3% by value. 75% of imported beer by value comes from Mexico. Exported beer grew 18% by value over the last 12 months and grew 69% by value. Constellation Brands represents a majority of Mexican beer imports and 60% of imported beer. The latest three months indicate decelerating volumes and growth in price/mix.
Imported packaged wine grew 18% by volume and 21% by value over the last 12 months and 23% by volume, and 40% by value over the last three months. Imported packaged spirits grew 15% by volume and 17% by value over the last 12 months. Over the last three months, spirits volumes grew 7% by volume and 16% by value.
Truck driver shortage (UTZ)
More than 72,000 truck drivers have been unable to drive since January 2020 after failing drug tests now required by the Drug & Alcohol Clearinghouse. The registry was established 22 months ago by the Federal Motor Carrier Safety Administration to increase safety on the highways. The American Trucking Association recently estimated the driver shortage at 80,000, up from 60,000 in 2018. The registry stops truck drivers from switching companies and avoiding positive drug tests. Most truck drivers who tested positive do not attempt to return to the industry through a remedial process. The biggest number of drug violations, at 56%, is for marijuana use. Marijuana use is illegal at the federal level despite being approved for recreational use in 18 states and medical use in 36 states. Amphetamine and methamphetamine account for 18%, cocaine account for 15%, and opioids 4%. The number of positive drug tests rose 13% in August compared to the previous year.
Truck driver recruitment is already up against other disadvantages, including being heavily male and older. The average age of enrollees in truck driving school is 35. Women only make up 8% of all truck drivers. Enrollees at truck driving schools fell by half in many programs during the pandemic, worsening the shortage this year. According to the Labor Department, vaccine mandates probably do not impact the sector as drivers are exempt if they are alone in their cab. The shortage of truck drivers is not due to one reason which makes a solution more difficult to achieve. Higher freight rates have been a gross margin headwind for the entire consumer staples sector this year.
