Q&A Call
We are hosting our monthly Q&A call on Monday, November 28 at 12:30 PM ET.
We will explore the following topics:
- Discuss the pushback and feedback from our recent Black Book calls.
- Review the 3Q22 earnings period: what changed, what stands out to us, and where we have more or less conviction.
- Discuss trends that we are seeing during 4Q22 ahead of earnings.
- Discuss the most common and noteworthy inbounds we have received in the past month.
- Revisit changes to our Position Monitors.
- Provide updates on some of our best ideas.
- Discuss recent trend changes in consumer spending.
Beer giveaway (BUD)
AB InBev is not taking the surprise cancellation of beer sales at the World Cup stadiums as lightly as FIFA. FIFA said, “The tournament organizers appreciate AB InBev’s understanding and continuous support to our joint commitment to cater for everyone.” AB InBev is reportedly seeking a $47M refund from FIFA after the sudden change or threatening legal action for breach of contract. The company is reportedly paying $75M to be the official beer supplier of this year’s tournament. For the 2026 North America World Cup AB InBev is reportedly paying $112M. The next tournament will also consist of 104 games instead of the 80 for the current tournament. Budweiser announced it will give away the beer in Qatar to the winner of the tournament. “We will host the ultimate championship celebration for the winning country.” AB InBev has a good case and has not been shy to go to court.
Mexico drought conditions (STZ)
In July, Mexico’s national water authority declared a state of emergency in four northern states. In August, Mexican President Andres Manuel Lopez Obrador (AMLO) said he would end beer production in the north of the country. September brought the rainy season and even hurricanes. AMLO has not followed through on his threats and beer production in northern Mexico has been unaffected. The NY Times reported, “Last month the official in charge of issuing water concessions at the National Water Commission, a longtime water rights activist who was said to be holding up the contracting process, was fired. The agency said the move was made to ‘accelerate’ an effort to reduce backlogs.” 2022 was the third year of La Nina which has contributed to the drought conditions in Northern Mexico. The La Nina weather pattern is expected to end in early 2023 and possibly the heightened drought politics.
Domestic wine Sales dip (NAPA, VWE)
Sales of domestic wine in the off-premise channel decreased 1% YOY for the four week period that ended October 8. Volume fell 4% to 8.6 million cases. In the past 52 weeks, wine sales fell 4% YOY and volumes fell 7% to 120 million cases. The off-premise channel has more difficult comparisons than the on-premise channel.
