Alcohol Imports (STZ)
Total beverage alcohol imports grew 9% over the 12 months that ended in January. Over the last three months, imports fell 2%, decelerating from the 1% growth in the three months that ended in December.
- Imported beer grew 3% by volume and 5% by value over the last 12 months. Over the last three months, beer imports fell 4% by volume and 2% by value decelerating from a 2% volume decrease and flat by value for the three months that ended in December. 80% of imported beer comes from Mexico. Constellation Brands represents a majority of Mexican beer imports and 60% of imported beer.
- Imported packaged wine for the last 12 months decreased by 15% by volume and was down 1% by value. Over the last three months, volumes decreased by 16%, and by value decreased 6%.
- Imported packaged spirits grew 18% by value over the last 12 months. Over the last three months, volumes fell by 6% and value fell by 2% That compares to a 2% volume decrease and 2% value growth over the three months that ended in December.
- Exported beer grew 20% in value over the last 12 months. Over the last three months, exported beer decreased by 22% by volume and 25% by value. Exported packaged wine fell 7% by volume and fell 9% by value over the last three months.
The pace of beer imports continued to decelerate in January, but the better sales trends in the month may lead to a pickup in imports in February for Constellation Brands.
Distributor jobs at stake (STZ, BUD)
Nevada lawmakers are hearing testimony on SB 108, a bill that would allow brewpubs to transfer their beer to their own taprooms (a place where beer is sold, but not brewed). Under current Nevada law, a brewery must sell its beer to a distributor and repurchase it at a ~25-38% markup in order to sell it from its taproom. Nevada has 51 craft breweries in the state. Breweries in Nevada only represent 3% of total beer sales in the state. Beer sold from taprooms represents less than 1% of all beer sales in the state. The beer distributors claim if breweries were allowed to transfer the beer to their taprooms and bypass distributors it could put thousands of their employees.
It’s par for the course for lobbyists to exaggerate their case before legislators, but this seems shameless. Unless of course, it is true. Nevada is Modelo’s #2 in state share of market. In California and Nevada Modelo’s share is twice that of the average share in its next ten states. In Nevada that could be in part due to the low share of craft.
Chick-fil-A looks abroad (LANC)
Chick-fil-A said it is planning to open restaurants in Europe and Asia by 2026, with locations in five international markets by 2030. The CEO said, “We feel like it’s time to continue to innovate and try and test how we will do in international markets so that we can learn.” Currently, the company has eight locations in Canada with plans to open seven to ten each year. International expansion will likely be a driver over the coming decades for Chick-fil-A. Lancaster Colony is the best way for public investors to participate in the growth of Chick-fil-A, as it represents >21% of sales and represents half of its sales growth. Lancaster Colony is a best idea long.
