STZ Black Book presentation today at 2 PM

We hope you can join us for our Constellation Brands best idea Long presentation later today. Constellation Brands could be the best investment opportunity in consumer staples over the next three to five years, but it needs better capital discipline for that to happen. Constellation Brands is unique in that it has a beer, wine, and spirits business; however, there are few real operational synergies from being in all three categories. Two years ago, Constellation Brands made an investment in cannabis in which there are even fewer cross benefits. This was both a financial and operational mistake, but one that should no longer drive the near-term results. As the beer business continues its dependable growth, the transitions being made in the other businesses will be smaller detractors. 

We will drill down on the demographics of beer, wine, spirits, and cannabis to understand the long-term drivers. We will look into the Hard Seltzer category to understand the biggest competitive threat the beer business is facing. We will analyze the latest transitions in the wine and cannabis businesses and assess whether they are positioned to succeed. We will do a deep dive into the sales and margin drivers of each business to build a bottom-up understanding of the company's future growth. We will have all the facts and figures needed to make a diverse company understandable. Finally, we will project what the coming three to five years out could look like.

For webcast and materials: CLICK HERE

Sprouts CEO interview does not see a dramatic change in reopened states

Bloomberg published an interview with the Jack Sinclair CEO of Sprouts Farmers Market over the weekend. Mr. Sinclair said the company had seen a very significant shift towards organic, grass-fed beef, and specialist chicken during the current period. Sprouts have also seen a flattening in the growth of online grocery shopping. E-commerce represented 13% of sales in April. Sprouts have benefited from the out of stocks at other grocers driving new customers to its stores. As far as the reopening in certain states, Mr. Sinclair said, "I have been surprised at the pace of consumer change not moving that fast in places like Georgia and Texas. What we are watching for is a return to normal. Transactions are going down, but the baskets are going up dramatically, so we are ending up with robust comp sales."

Bud makes sure your beer is fresh

As an extension of Bud Light's Certified Fresh initiative, the company will swap beer that has aged at no cost to restaurants. Industry practice is a 50/50 split at most when beer goes "out of code" – past its expiration date. Bob Pease, CEO of the Brewers Association, estimates $900M of beer, including over a million kegs, will be lost. The initiative will be well received by restaurants that have to outlay new cash to restock their bars as they start to open in some states. The amount will be relatively small for AB InBev, and it already took a reserve last quarter. However, for craft brewers, on-premise sales represent 40% of their revenue. The dates have more to do with freshness and flavor than health and safety.