Top pick for 2023 (STZ, PRGO)
Predicting which stock could go up the most in the next year is a useful exercise at this time of the year because it gets the mind working. However, it does seem like planning all of your moves in a chess match before the game begins. For the thinking process behind our prediction for the top-performing stock of 2023 watch the Q&A replay (time stamp 22:55).
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CLICK HERE for the replay. |
Dry January (KDP, HEIA)
Athletic Brewing said it is making its “biggest investment ever” with a national media campaign to promote Dry January. Nearly every media outlet has a Dry January story. According to CGA, 35% of U.S. adults took part in Dry January in 2022, up from 21% in 2019. 74% of those who intended to abstain from alcohol said they succeeded.
According to NielsenIQ non-alcoholic beer sales grew 20% to $329M in the year ended August.
Based on the media it would seem like the non-alcoholic beverage trend continues to gain momentum. However, viewing the numerous launches of non-alcoholic beverages launching alcoholic versions like Simply, Mountain Dew, or Lipton’s Tea it may seem like alcohol is spreading everywhere. The non-alcoholic beer trend has grown but does not deserve the media attention it has. The attention seems to serve more of a public service message like the drunk driving advertisements. Heineken 0.0 is the leading non-alcoholic beer in the U.S. with about 27% share of the subcategory. Keurig Dr Pepper announced a $50M investment in Athletic Brewing in November.
Truck rates continue to fall (UTZ)
According to DAT’s RateView index, van spot trucking rates in December are 20% lower YOY. Contract rates were roughly flat YOY and down 2% from November. Contract rates have fallen 9% from the peak in June. Spot rates are down 23% from the peak in January, but contract rates did not peak until June. National on-highway diesel prices are currently up 25% YOY. Freight costs have been a margin headwind for the CPG companies in 2021 and 2022. A margin tailwind from lower truck rates may take until 2023 for some companies, it depends on their mix of contract and spot and diesel prices.
