Consumables Monthly Digest today
We are hosting our monthly Consumables Digest call today at 12:30 ET. We will quickly revisit several of our long ideas including PRGO, GIS, and HSY as well as short ideas including SFM. We will discuss pushback on our recent calls, recap important developments over the past month, share noteworthy takeaways from management calls, and address top client inbounds.
We will also have time for questions but will strive to keep the call's length to 30 minutes.
| Webcast & Slides: CLICK HERE (Refresh shortly before the call). |
Health & Wellness beverages (COCO, CELH)
According to GlobalData, the segment of soft drinks that is expected to have the highest volume CAGR over the next three years is functional drinks at 6.5%. The next fastest-growing segment is expected to be iced/RTD tea and coffee. In dollar terms, functional drinks is expected to grow at an 8.6% CAGR while iced/RTD tea and coffee is expected to grow at a 6.4% CAGR.
According to the GlobalData survey, 34% of shoppers said sugar-free was essential, 37% said no-added sugar was essential, and 20% sugar content was not a deciding factor. “Most notably, health & wellness has firmly held its position as the most influential megatrend since the beginning of 2021. Undoubtedly this has been triggered by COVID.” 35% of survey respondents said they look for products that boost energy. Energy drinks continue to outpace the beverage category and the health and wellness trend within energy drinks is a burgeoning sub-category. Celsius is going to be an important leader in the future of health and wellness within energy drinks. Vita Coco is a fast-growing participant in the functional beverage category and the leader in coconut water. We added Vita Coco to our Long Bias list yesterday and vetted the company in our Idea Hunt.
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CLICK HERE for the Idea Hunt webcast replay and materials. |
Sticker shock (KR, TSN)
The percentage of Americans who did not purchase an item due to inflationary price increases has risen recently. 80% of survey respondents are forgoing purchases due to price increases. According to the survey meat and egg products are among the top items consumers are most likely to cut back on. Eggs are one of the most affordable sources of protein. To see a unit response to eggs demonstrates elasticity comes for everything.
OFF-PREMISE IRISH EXIT (STZ, BUD, SAM)
For the week ended March 19, off-premise beer category sales decreased 3.2% YOY according to Circana. St. Patrick’s Day failed to lift off-premise sales as it did for on-premise sales. Total beverage alcohol sales decreased 1.3% YOY but grew 1.1% over the prior week. Beer category sales increased 0.9% over the prior week. Spirits sales increased 5.1% YOY and 3.5% week over week. Wine sales decreased 0.2% YOY and decreased 0.5% week over week.
Spirits-based hard seltzers continued to lead with growth of 90.5% YOY led by High Noon’s 87.5% growth. Beer category hard seltzer sales decreased by 17.8%. Truly sales decreased by 30.5% while Bud Light Seltzer sales decreased by 50.8%. Malt and sugar-based hard seltzers still outsold spirits-based hard seltzers by nearly 8 to 1. Modelo sales grew 5.3% in dollars and 0.2% in volume while Pacifico sales increased 18.1% in dollars and 13% in volume. St. Patrick’s is an on-premise event – not a surprise. Due to their relative sizes spirits-based seltzers can continue to report robust growth rates at the expense of malt-based seltzers for years.
