Wine bounces in April (NAPA, STZ)
Total wine sales in the U.S. grew nearly 11% in the year ended April. Domestic wine sales drove the growth with an increase of more than 16%. Packaged imports decreased by 1%. On-premise spending increased by 29% while off-premise spending increased by 10%. Table wine sales increased more than 17% while sparkling wine sales fell nearly 7%. Bulk import sales increased by 24%. April was a good month for the wine industry, but the gains are not evenly distributed. Decoy by Duckhorn has been one of the few share gainers.
Boardwalk campaign (STKL, OTLY, SBUX)
PETA is featuring Succession actor James Cromwell in a campaign on Atlantic City’s Boardwalk calling on Starbucks to end its vegan milk surcharge. The campaign features nearly 100 screens with James Cromwell’s face alongside text saying “Helping Animals and the Earth Isn’t a Tall Order” and Starbucks End the Vegan Upcharge.” It is not the first time the actor has campaigned for the issue. He has previously glued himself to a Starbucks counter.
Starbucks charges consumers $.70-.90 to include almond, coconut, oat, and soymilk instead of dairy milk in the U.S., but has removed the upcharge in several European countries. SunOpta supplies Starbucks with all of the plant-based milks, but for oat milk, it is the secondary supplier after Oatly. Removing the fee would result in a marked increase in plant-based milk utilization at Starbucks. Starbucks is SunOpta’s largest customer.
Summer driving kickoff (BJ, COST)
Memorial Day kicks off the start of the summer driving season. Despite the lead-up to the holiday, gasoline prices have been flat for the past month. AAA forecasted that Memorial Day road trips would be up 6% YOY. Crude oil prices are down by a third compared to the prior year. The national average gasoline price reflects the drop in crude oil prices with prices down by 23% YOY. Last year gas prices peaked in June which would be a favorable comparison this year if gas prices continue to hover at the current level. Traffic to gasoline stations would be in line to benefit while warehouse club gasoline stations would have the more difficult comparisons.
