Beer Index remains in contraction (STZ, SAM)
The National Beer Wholesalers Association’s (NBWA) Beer Purchasers Index (BPI) fell to 30 in December from 38 in November. A reading over 50 denotes expansion, while below 50 denotes contraction. 30 is the lowest reading for the BPI.
Imports were the only segment in expansion at 54, down from 59 in November and 74 last year. The index for craft beer fell one point from November to 24, the lowest reading since 2015. Below premium fell five points from November to 42 but was up from 38 last year. Below premium was the only beer category that improved YOY. Premium lights fell ten points from November to 31. Last year premium lights were still in an expansionary territory at 65. FMB/seltzer improved from 16 in November to 26. The measure for at-risk inventory was 51, up from 49 last month, pointing to a weak start to 2023.
Below premium’s improvement is likely due to consumers trading down due to the recent price increases, but overall purchases are still declining. Additional price increases by the large brewers are negatively impacting demand. Constellation Brands remains the sector’s growth story (even though its growth rate has slowed) while the other categories remain under pressure.
Organic carrots (SFM)
According to The Packer’s Organic Fresh Trends survey, 14% of consumers said they purchase organic carrots exclusively. That is down from 16% last year, but up from 11% two years ago. One-third of consumers said they purchase organic carrots periodically, similar to last year. Organic shoppers skew younger. 29% of consumers between the ages of 18-29 purchase organic carrots exclusively compared to <6% over 50 years old. In 2021 organic carrots accounted for 18.9% of total carrot sales. Carrots have the highest mix of organic sales in the fresh vegetable category. Lower prices are a significant factor in the higher mix. Sprouts Farmers Market is on our short list. Inflationary price increases in the produce department are causing consumers to trade out of organic produce, which is a significant traffic driver to Sprouts Farmers Market stores.
Energy stampede (MNST, PEP)
There were stampedes, scuffles, and mayhem across Aldi stores in the U.K. yesterday as shoppers clamored to purchase Prime Hydration Drink, a new energy drink. Prime was created by Youtube stars Logan Paul and KSI. KSI is a musician with more than 24 million subscribers while Logan Paul is a professional wrestler and media personality who has 23 million subscribers. Many stores had lines formed before the opening consisting of parents and children. A bottle of Prime Energy retails for £1.99. The energy drink consists of 10% coconut water, contains electrolytes and vitamins, and has no sugar. The drink is available in the U.S., but it is sold out in numerous retail locations. The hype over the drink has been driven in part by significant price premiums for the bottles listed on eBay. Youtube stars are creative at creating hype and Rockstar and Bang Energy have shown how the cult of personality can be leveraged in the category.
