Black Rifle Coffee Company, SunOpta, and Vintage Wine Estates present today at the ICR conference. All three are on our long list. For a quick synopsis, investment thesis, and list of questions to ask of management CLICK HERE to download our ICR Conference Guidebook.
On-premise recovering despite omicron (BUD)
The holiday period had volatile week-to-week results in the on-premise channel. The week of December 18 was up 9% week over week, followed by a 16% decline the following week of December 25. The week ended January 1 was up 10% week over week. For the week ended January 1, 2022 sales velocity was up 44% YOY and 10% vs two years earlier according to BeverageTrak. The biggest improvements were in the states with the most restrictions a year ago including California (+186%), Illinois (+85%), and New York (+70%). For the 12-week period sales were up 67% YOY and +21% vs. two years prior. For the holidays Christmas Eve, Christmas Day, and New Year’s Eve sales velocity for drinking and eating exceeded 2019’s pre-pandemic spend.
Alcohol imports (STZ)
Total alcohol beverage imports grew 19% by value over the last 12 months ended November. Over the last three months, imports were up 9% by value. 35% of all imported beverage alcohol by value came from Mexico over the last 12 months. Total beverage alcohol exports grew 8% by value over the last 12 months and grew 21% over the last three months. 27% of all exported beverage alcohol by value went to Canada over the last 12 months.
Imported beer grew 10% by volume and grew 13% by value over the last 12 months. Over the last three months, imports declined 4% by volume and grew 2% by value, decelerating from -1% and +1% respectively in the three months ended October. 75% of imported beer by value comes from Mexico. Exported beer grew 20% by volume over the last 12 months and grew 55% by value. Over the last three months, exports grew 4% by volume and grew 5% by value. 25% of exported beer by value goes to Chile. 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 14% by volume and 25% by value over the last 12 months and 8% by volume, and 23% by value over the last three months. Imported packaged spirits grew 15% by volume and 20% by value over the last 12 months. Over the last three months, spirits volumes grew 5% by volume and grew 13% by value. 35% of all imported packaged spirits by value come from Mexico, while 19% of all exported packaged spirits by value goes to Canada.
Out of stocks (SFM)
An Ipsos survey of 1,000 U.S. consumers reported that 65% of respondents said inventory availability at grocery stores was worse than it was before the pandemic. Nearly half of the respondents in households with children said their primary grocery store was out of one or more items at least half the time. An IRI survey in November said nearly 20% of households with children said they changed their primary grocery store because of dissatisfaction with item availability or online substitutions. 60% of shoppers with children in their household purchased items from another store due to out of stocks compared to 45% among all shoppers. The product categories that out of stocks have the most negative impact for consumers are fresh food categories including meat, produce, and dairy. Out of stocks matter to consumers and the better operators can gain share during challenging times. The larger grocery chains can flex their market power, but so can the large multi-outlet retailers.
