Q&A call today
We are hosting a Consumer Staples & Restaurants Q&A call today at 12:30 PM ET.
- We will revisit the investment themes for both sectors.
- We will discuss the most common inbounds we have received.
- We will go through our recent position monitor changes including CMG, DASH, SG, and PEP.
- We will provide updates on the headwinds and tailwinds for both sectors including labor, transportation, ingredients, the shift to away-from-home consumption, and other inflationary pressures.
- We will provide brief updates on some of our best ideas.
Wine sales accelerate (VWE)
Domestic wine sales increased 11% in February compared to the prior year. That is an acceleration from the 6% YOY growth in January as seen in the chart below. Off-premise wine sales decreased 4% compared to last year with some on-premise restrictions. DTC shipment spending increased 15% in February. We are hosting a Wine Black Book on Thursday at 12:30 PM ET, digging into industry trends and projecting what the future of wine will be in the public markets.
Avocado sales (AVO, CVGW)
Avocado retail sales in the four weeks ended February 20 increased 21.6% to $228.6M, accelerating from 12.4% growth in the prior four-week period. The U.S. halted imports from Mexico for nearly a week after a USDA inspector received a threat. The Association of Avocado Producers and Packers Exporters of Mexico estimated the cost of the interruption was more than $120 million throughout the supply chain, impacting wholesale, retail, and foodservice. Avocado prices in January were 30% higher than the year prior.
Overall produce sales grew 4.9% in the four-week period, decelerating from 4.0% in the prior period. Fresh vegetable sales decreased 1.4% despite the higher prices. Fresh vegetable sales are a useful indicator of at-home food demand, as vegetables are not often stored and fruit sales are often spontaneous decisions rather than planned around meal preparation. Avocados were the fourth largest category of fruit in the period after apples, grapes, and bananas. The price spike is not favorable for the growers if it impacts demand, which it appears to have done.
