TEXAS ON-PREMISE ALCOHOL SALES (STZ)
In June, on-premise alcoholic beverage tax receipts increased by 2.5% YOY, the strongest growth since September 2023, accelerating from -7.9% growth in May. Texas reports its on-premise alcoholic beverage sales tax receipts monthly. YTD tax receipts have declined 1.0% YOY. The on-premise channel represents less than 20% of sales for the large brewers, while craft brewers have a larger mix.
Chevron Implication (PM)
Philip Morris-owned Swedish Match presented to the Tobacco Products Scientific Advisory Committee on June 26. The meeting was part of Swedish Match’s request to continue to market snus products as Modified Risk Tobacco Products (MRTP) and to expand the permitted use of the reduced risk claim. Currently, Swedish Match can only communicate, “Using General Snus instead of cigarettes puts you at a lower risk of mouth cancer, heart disease, lung cancer, stroke, emphysema, and chronic bronchitis” on its own website.
Last week, the Supreme Court overturned the Chevron deference, a move that will likely limit the FDA’s ability to regulate tobacco products. The agency will have to rely more on evidence and studies rather than preference and politics. In the case of flavors in tobacco products, the companies will be able to make their case for reduced harm from smoking compared to the risks of youth access. FDA officials previously expressed skepticism regarding flavors, and several states have implemented bans. It will be more difficult for the FDA to act on its own regarding flavor bans. Oral nicotine pouches have a much lower level of youth usage compared to vaping. Any changes in the FDA’s process will take time, but time is on Philip Morris’ side for oral nicotine pouches.
No Carb Challenger (FLO)
Hero Bread recently raised $21M in its latest fundraising round. The better-for-you baker was founded in 2021. It offers a range of bakery items, including bread, buns, tortillas, croissants, and more. The products have low amounts of carbs and 4-7 grams of protein per serving. The company has raised $68.5M to date. The company will use its funding to reinforce its retail footprint. The company boasts a notably high repeat purchase rate, and its white bread and burger buns are the #1 best-sellers on Amazon. At the end of Q1, the brand was distributed to 3,500 stores. Hero Bread has been on Flowers Foods’ radar, but it will be more interesting if the upstart can generate more growth.
