Plant-based milks drive the category (STKL, OTLY, BYND)
U.S. plant-based milk sales grew 4% to $2.6B in 2021 according to SPINS. Plant-based milk now accounts for 16% of all retail milk sales. Almond milk represents 59% of the plant-based category while oat milk represents 17%. In 2018 oat milk only represented 0.5% of the non-dairy category. Plant-based dairy products not including milk reached $2.1B last year. The plant-based food category grew 6.2% to $7.4B in 2021. Plant-based meats were flat in 2021 at $1.4B. 62% of U.S. households are now purchasing plant-based products, up 1% point from the prior year. Oat will continue to gain share in the plant-based milk and total milk category.
Traffic impact from rising gasoline (KR)
Yesterday, the national average gasoline price was up 48% YOY and 18% higher than a month ago. Traffic trends at food retailers have been negatively impacted by the surge in gasoline prices. The traffic trends between grocers, dollar stores and superstores have all been impacted suggesting that there has not been a trade down effect between the type of store. Trip consolidation is a natural response to higher gasoline prices, especially among low-income shoppers. Grocery stores own gasoline stations in part to drive traffic to the store when visits are more difficult to come by.
Consumer DTC woes (VWE)
Increasing Facebook ad prices, higher shipping costs, and worsening ad measurement has caused the share prices of many DTC consumer brands to underperform this year. Nearly all of the public DTC consumer companies have seen revenue declines, margin contraction, and widening losses. Facebook ad prices have skyrocketed in the last couple of years. Apple’s iOS privacy changes also impaired the ability to measure the effectiveness of social media ads. This has harmed the return on advertising spending.
DTC has been one of the bright spots for the wine industry. Despite the comparisons to the pandemic boosted results DTC sales are still growing YOY for the wine companies. The most important reason is that the tasting rooms are one of the biggest drivers of wine club and e-commerce orders. We are hosting a Black Book on the wine sector on Thursday and we will dig into the drivers of each distribution channel.
