Eggstatic over lower prices (CALM, VITL)

The wholesale price of a dozen eggs in the Midwest fell $.24 from the prior week to $3.05 for the week ended February 3. The wholesale price is down 59% from the week ended January 3.  The national average retail price of a dozen conventional eggs was flat sequentially at $3.99 for the week ended February 3. There is a lag between wholesale and retail prices, but grocers are likely to pass on the lower prices quickly given the high profile nature and attention eggs have received. The surge in prices began with the culling of flocks due to the avian flu. Higher feed prices and other inflationary pressures have also contributed to the inflation in egg prices. The poultry and egg markets are the quickest to respond to price signals. It takes between 16 to 18 weeks for a chick to mature to the point it is an egg layer. The stock of egg-layers is still about 5% lower. 

98% of U.S. households purchase shell eggs or egg products. Since eggs are an inexpensive source of protein there is not a lot of demand destruction at higher prices. Vital Farms’ small pasture-raised flocks have been much less susceptible to the virus outbreaks compared to large commercial farms like Cal-Maine. 

Staples Insights | Lower egg prices (CALM), Wine spending by age (NAPA), On-premise bounce (BUD) - staples insights 20723

Wine DTC spend by age (NAPA)

Much has been written about the wine industry’s need to connect with the younger generations to grow and reduce their dependence on Baby Boomers. A positive indicator for the industry is the growth in DTC spending over time for each age group. The per capita spending of the 21 to 30 years old group is also growing faster than the 61 to 70 years old group. There is a lot of innovation in wine by packaging and beverage type. The higher average price of wine at $2.29 per serving compared to $1.38 for beer and $1.12 for spirits is certainly a contributor to the lower mix of wine for younger consumers. On the premium end, wine only had competition from Scotch a generation ago. Now, craft beer, and nearly every type of spirit has a high-end offering.  

Staples Insights | Lower egg prices (CALM), Wine spending by age (NAPA), On-premise bounce (BUD) - staples insights 20723 2

On-premise bounces (BUD)

On-premise sales velocity has increased 20% YOY in the two week period between January 15 and 28 according to CGA. For the week ended January 28, check value increased 14% nationwide while ticket count grew 6%. More than two-thirds of survey respondents said they had been out to eat in the last two weeks of January, up 1% from December. 40% of respondents said they had been out for drinks over the same period, up 3% from December. January has the easy Omicron comparisons, expect deceleration in February.