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Non-alcoholic beverage sales (BUD)
Sales of non-alcoholic beverages continue to grow year over year despite a slowdown in beverage alcohol sales. In the year ended August 20, non-alcoholic versions of beverage alcohol products were $395M in the off-premise channel compared to $179M in 2019. Non-alcoholic beverage sales are comprised of 85% non-alcoholic beer and 13% non-alcoholic wine. Sales of non-alcoholic beverages grew 35% in both 2020 and 2021 and decelerated somewhat to 20.6% in the last 52 weeks. Sales of beverage alcohol sales have declined 1.1% in the year ended September 3.
Grocery sales are the largest retail channel for non-alcohol sales at 61%. Imported beer accounts for 33% of non-alcoholic beer, led by Heineken 0.0. 70% of non-alcoholic beer sales are from the top five brand families: Heineken, Budweiser Zero, O’Doul’s, Athletic Brewing, and Busch NA. 82% of non-alcoholic beer purchases are made by consumers who also purchase the alcoholic beverage and represent 3.2% household penetration. The most common reasons given for purchasing non-alcohol, according to a Nielsen survey, include “to be healthier” at 41% and “to try something new” at 34%. Non-alcoholic beverage sales are still small, with only a 0.4% share of the total off-premise alcohol market. The growth rates get more attention than the market impact.
Grocery Outlet visits (GO)
Chainwide traffic to Grocery Outlet increased 9.2% YOY for the week ended August 28, accelerating from 7.3% in the prior week, according to Placer.ai. Traffic grew 8.5% in August, a deceleration from 9.1% in July. Grocery Outlet is benefiting from inflationary headwinds as consumers look to the value food retailer to stretch their food budgets.
Not Oatly (STKL, OTLY, SBUX)
A video on TikTok demands that Starbucks return to Oatly. The Starbucks barista claims the chain has switched brands. “Starbucks changed the oat milk they use so that’s why all your favorite drinks taste like [garbage] now.” The video has over half a million views.
Starbucks uses Oatly for oat milk and in some locations, it uses SunOpta oat milk. Starbucks has had to utilize a backup supplier after Oatly was not able to fulfill all of Starbucks’ needs. It is not clear who makes the oat milk at the Starbucks location in the video, but it is in Canada. There have not been any viral complaints about SunOpta’s oat milk over the past year. Starbucks still charges an upcharge in the U.S. for plant-based milks. Removing the fee will boost plant-based milk sales at the chain, which is supplied by SunOpta.
