Beer Distributors Index remains in contraction (STZ, SAM, TAP, BUD)
The National Beer Wholesalers Association’s Beer Purchasers’ Index was 45.5 in September, indicating the fourth month of contraction and a slight downtick from 46 in August. A reading over 50 denotes expansion, while below 50 denotes contraction.
The only category of beer in expansion was imports at 61, slowing from 67 in August. Below premiums were 47, improving from 42 sequentially. Premium lights were 47, rebounding from 38 in August. Premium regular was 36, rebounding from 33 in August. Craft beer had a reading of 26, falling further from August’s 28. FMBs had a reading of 24, falling from August’s 31. The at-risk inventory reading was 50 in September, down from 54 in August. Constellation Brands remains the sector’s growth story while the other categories remain under pressure.
Beer Shipments accelerate (BUD)
U.S. brewers shipped 14.6 million barrels of beer in August, up 2.4% YOY. August’s increase reversed a four month trend of shipment decreases. August was only the second month this year with growth in shipments. YTD shipments have decreased 4.2%, representing a decline of 4.9 million barrels. Finally, a month where distributors needed more inventory after months of declines. Beer inflation has trailed nearly all large food and beverage categories, making it difficult to pin volume declines on higher prices.
Slow hiring (PRGO)
The Michigan Economic Development Corporation’s Strategic Fund Board approved some changes to Perrigo’s requirements for a $2M business development grant. The board agreed to reduce Perrigo’s base level of employment from 4,170 to 4,124 because of the sale of its drug business. Perrigo said it needs another year to reach its employment target due to high turnover and difficulty finding employees. As of September 27, Perrigo had 318 job openings. Under the new agreement, Perrigo must create at least 50 jobs by June 30, 2023, followed by 40 by June 30, 2024, and the remaining 54 to 80 by June 30, 2025, to receive the full grant. Perrigo opened its new headquarters in Grand Rapids in June. It has a 12-year property tax break at the new location. An interesting update on the company’s internal plans. Management hiring plans have run into a difficult job market.
