On-premise recovery (BUD)
According to CGA on-premise alcoholic beverage sales velocity decreased 2% in the first week of March and decreased 1% in the second week. Traffic decreased 1% while check increased 1%. Sales increased 12% YOY in the week ended March 12 and 43% compared to the same week in 2020. For the 12 week period ended March 12 sales increased 47% YOY and 17% compared to the same period in 2020. Compared to the prior year, sales velocity for the week ended March 12 was up dramatically in states that had significant restrictions including New York (+50%), Illinois (+42%), and California (+56%) while states without restrictions including Texas (+8%) and Florida (+13) had much smaller increases. The reported data is now lapping two years of the pandemic. Now what matters will be the secular changes.
Drought conditions (NAPA, VWE)
Heavy rains across parts of the Midwest and South led to broad improvement in the regions last week. Parts of the West also received much-needed rainfall, but the amounts were not enough to bring relief to the long-term drought conditions.
Parts of the Western U.S. had record-breaking precipitation in October and December last year. After two years of drought conditions California appeared to be turning the corner. Then the three-month period from January to March 2022 was the driest in more than a century for nearly all central and northern California. Higher temperatures also caused premature snow melt last week. Statewide the Sierra snowpack was at 38% of normal on April 1 (typically the peak), the lowest level since the end of the last drought in 2015. The Central Valley Project has announced to expect only 25% of the requested water supply this year. Farmers have been told to not rely on any water this year. 2022 looks to be another challenging year for farmers in California and the wildfire risk is raised.
Canadian beer sales (TAP)
Domestic beer volumes decreased 7.5% YOY in February, improving from the 11.2% decline in January as seen in the following chart. Imported beer volumes increased 7.7% in February, a snapback from the 16.6% decline in January. Exports in January decreased 26.8%. 85% of the beer consumed in Canada is made in Canada. Canada’s bars and restaurants were more locked down than in the U.S., so there should be an even larger swing to the on-premise channel this year.
