Craft beer declines (SAM)
Craft beer sales have declined 6.6% for the year-to-date period through August 7 in the off-premise channel. Sales have improved recently with sales only decreasing 3.9% in the four-week period and 5.1% in the 12-week period ending August 7. The craft beer category has lost 0.9% points of share in the grocery channel, 0.4% points of share in the c-store channel, and 0.6% in the combined channel. Blue Moon Belgian White was the second largest share gainer in the craft beer segment, gaining 0.4% points. Sales of Samuel Adams’ largest SKUs, Boston Lager fell 13.8% YTD, seasonal fell 5.3%, and the variety pack fell 8.4%. Boston Beer’s sales only decreased 0.7%, because Twisted Tea and Truly represent 81% of the company’s off-premise sales measured by IRI. Only Yuengling & Son of the top 25 craft beer manufacturers saw an increase in sales, up 12%. Yuengling added distribution by Molson Coors in some areas. Craft beer sales this year are boosted by the easier on-premise comparisons. Craft beer also skews more towards the on-premise channel than the large beer manufacturers.
A Sign of tight budgets (WMT)
More than 20 million households, nearly one in every six U.S. homes are behind on their electric bills according to Bloomberg, which cited figures from the National Energy Assistance Directors Association (NEADA). California’s PG&E said there has been a 40% increase in the number of residential customers who are behind on payments since February 2020. New Jersey’s Public Service Enterprise Group said customers who are at least 90 days late on their bill have grown 30% since March.
The surge in electricity prices has something to do with households’ bills in arrears. 40% of the power grid uses natural gas as the fuel. According to a U.S. Census Bureau survey conducted at the end of June/early July 40% of adults say that it has been somewhat or very difficult to cover usual household expenses. Utilities, like food, are a necessity. The overdue bills and credit card debt being at all-time highs demonstrate the pressure households are under in the current inflationary environment. Consumer Staples is the best house on the block.
Still targeting an IPO (Instacart, WMT, DASH)
Instacart reported a 39% increase in revenue to $621M in the June quarter, accelerating from 15% in the March quarter. Orders grew 25% to 60 million. Last year, Instacart acquired FoodStorm to enter the grocery catering business. Instacart recently implemented a lower-priced scheduled delivery and more expensive fast delivery boosting orders. Yesterday, Instacart announced a new “Big & Bulky” nationwide fulfillment plan to deliver large items like outdoor furniture and electronics. The company also said it achieved profitability in the quarter, a goal companies going public like to highlight.
The competition in delivery has not subsided. DoorDash and Walmart are ending their partnership reportedly to establish and grow their own in-house platforms. Walmart’s internal platform, Spark, comprises 75% of its deliveries. Walmart is acquiring Delivery Drivers, which has been servicing the deliveries. Grocery Outlet announced a partnership with DoorDash last week for same-day grocery delivery. Instacart is one of the few companies moving towards an IPO this year, an aggressive move considering the environment and pressure on consumers’ grocery bills. Its last funding round in March 2021 valued the company at $39B, but a year later the company said its internal valuation was lowered to $24B.
