Alcohol imports Decelerate (STZ)
Total beverage alcohol imports grew 10% over the 12 months ended July. Over the last three months, imports grew 5%, decelerating from +12% in the three months ended June.
- Imported beer grew 2% by volume and 4% by value over the last 12 months. Over the last three months, beer imports decreased 1% by volume and grew 2% by value, decelerating from flat volume growth and 4% growth by value in the three months ended June. In the month of July, imports grew 0.8%, taking the YTD growth to 3.9%. Mexican imports grew 7.4% taking the YTD growth to 12.1%. Imports from Belgium fell 83.6% as a result of AB InBev moving production of Stella Artois to the U.S. Adjusting for the Stella shift imports would have been up 4.4% in July. 80% of imported beer comes from Mexico. Constellation Brands represents a majority of Mexican beer imports and 60% of imported beer.
- Imported packaged wine for the last 12 months decreased 7% by volume and increased 7% by value. Over the last three months, volumes decreased by 20%, and by value decreased 9%.
- Imported packaged spirits grew 20% by value over the last 12 months. Over the last three months, volumes grew 7% and value grew 17%. That compares to 15% volume growth and 28% value growth over the three months that ended in June.
- Exported beer grew 28% by value over the last 12 months. Over the last three months, exported beer grew 25% by volume and 48% by value. Exported packaged wine grew 7% by volume and 4% by value over the last three months.
Constellation Brands’ shipments were up 17% in the quarter ended May, well above trend. Management attributed the strength to lapping supply challenges from weather impacts. Shipments appear to have normalized in June and July.
Opill meeting scheduled (PRGO)
Perrigo announced that the FDA will convene an advisory meeting to review its application for the approval of Opill for OTC use. The meeting is scheduled for November 18, roughly four months after the submission of the application. The FDA has a goal to decide on applications in about ten months. The meeting of the advisory committee is generally held close to the end of the ten month review period, so this comes about six earlier than expected. The FDA does not have to follow the advice of the committee and it does not have to make a decision immediately after the meeting. The next step will be to see the briefing documents for the meeting that will be published two days prior. If approved, Opill would be the first daily birth control available OTC in the U.S. Opill’s approval is one of several sources of upside to Perrigo’s EPS estimates over the next year. Perrigo would have the OTC contraceptive market to itself for some time.
2021 Consumer Expenditures (WMT)
According to the Bureau of Labor Statistics average annual consumer expenditures rose 9.1% in 2021. The average income increased 3.7% before taxes for the year. Food expenditures increased 13.4% in 2021 after falling 10.5% in 2020. Food away from home spending rose 27.6% in 2021 while food at home spending rose 6.6%. Food was the third largest category of expenses at 12.4%. The average household spent $5,259 on food at home and $3,030 on food away from home. Spending on alcoholic beverages rose 15.9% in 2021, after falling 17.4% in 2020. The increase was driven by a 69.4% rebound in alcohol away from home spending while at home fell 7.9%. The largest growth in food at home spending came from the lowest income quintile. Total food expenditures had the largest dollar increase of any spending category for the lowest income quintile. Spending on food is crowding out other expenditures for the lowest quintile while transportation and housing are seeing the largest increases for the other income quintiles, a phenomenon the mass retailers have reported this year.
