SNAP strain remains elevated (WMT)
According to Propel's latest survey, food insecurity trends were elevated but stable from August to September. Propel has a free app that over five million EBT recipients use. Half of the survey respondents report eating less, as seen in the following chart. Over 30% visit food pantries, while over 30% rely on friends and family for meals and groceries. All of the levels are elevated compared to March, when the emergency food stamp pandemic payments ended in 32 states. Walmart has the largest number of customers that receive SNAP benefits. Walmart continues to see higher-income households trading down, which has more than offset weakness among lower-income households.
Spirits accelerate in August (DEO)
Spirits sales in control states grew by 4.9% in August YOY, according to the NABCA, with price/mix of +1.7%. Volumes increased 3.2% in August, accelerating from -0.4% in July. In the 12 months ended August, sales increased by 3.7%, and volumes increased by 0.8%. Cocktails had the strongest growth in spirits at 15.9%, driven by canned RTDs, which had a volume growth of 26.9%. August decelerated from July’s cocktail growth of 20.0% and canned RTD growth of 36.5%. Tequila volumes grew by 13.1%. Vodka, the largest category of spirits, had a volume growth of 3.1%. Domestic whiskey volumes increased by 4.3%, accelerating from July’s 1.1% decrease.
Wine volumes decreased by 7.5%, with a sales decline of 6.4% and price/mix of +1.1%. Wine sales weakened from July’s 1.7% sales decrease and volume decrease of 3.2%. The on-premise spirits channel had sales growth of 7.1%, with volume up 4.1% and price/mix of 3.0%. The on-premise wine channel had flat sales, with volumes down 6.8% and price/mix of +6.8%.
There are 18 control states that report monthly spirits sales. August had the strongest growth since May.
Instant Brands auction (SN)
Instant Brands selected Centre Lane Partners, a private equity firm, as the winner in its bankruptcy auction. Instant Brands is a kitchen appliance manufacturer best known for its Instant Pot cooker. Center Lane offered $350.8M for Instant Brands’ housewares and appliance businesses. Center Lane was the only bidder for the housewares business, but Conair submitted a losing bid of $129M for the appliances division.
Instant Brands filed for Chapter 11 bankruptcy in June. The CEO attributed the bankruptcy to tighter credit terms, higher interest rates, and over-reliance on Instant Pot. Sales of Instant Pot slowed after the post-pandemic home cooking trend cooled. SharkNinja is the consumer innovation designer few paid attention to before its recent spin-off. It avoids overreliance on any one category by investing in R&D and focusing on customer feedback. The company has entered ten new product categories in the past three years. SharkNinja gains share in every category it enters, and multicooker devices like Instant Pot are no different. It does not surprise us that SharkNinja did not bid on Instant Brands; its growth has been organic. For the replay of our SharkNinja Black Book, CLICK HERE.
