“My focus is entirely on growing this business to a $40 billion company in terms of revenue.” – Ethan Brown CEO of Beyond Meat
Online grocery continues to grow month over month (KR)
Online grocery purchases have continued to grow even as more of the at-home restrictions are lifted. According to the Brick Meets Click/Mercatus Grocery Survey, online grocery sales in May rose 24% MoM to $6.6B, as seen in the table below. Not only has the number of orders increased each month during the pandemic, but the average order size has as well. Helping drive the sequential growth is the additional capacity grocers have allocated to online orders as service levels in March were not able to keep up with demand. Initially, many in the industry expected online orders would fall once the pandemic was over as customer satisfaction was generally low (47% in March vs. 80% pre-pandemic). The pandemic has accelerated a shift to online grocery shopping that had been gradual. Online grocery shopping is benefiting from several factors, including avoiding lines outside the store, consumers working from home, and elderly trying to prevent the virus. Inmar, a data analytics and technology firm, said 78,7% of consumers polled reported shopping online for groceries (includes parcel deliveries) after the COVID-19 outbreak compared to 39% before the outbreak.
Hard Seltzer now winning alcohol share of wallet (SAM)
Hard seltzer sales grew 272% in the week ended May 16 and surpassed 10% share of the beer category for the first time. During the first 11 weeks of the pandemic, hard seltzer sales grew 326% in the off-premise channel. According to Nielsen, during the first eight weeks of COVID-19 (March 1-April 25), the number of consumers buying hard seltzer doubled. 44% of the hard seltzer buyers were purchasing the category for the first time. Nielsen also said hard seltzer buyers were spending less of their money on beer and wine compared to the same time the prior year. Nielsen said this was not the case last year as hard seltzer buyers were spending more on alcohol. We wrote in our STZ Black Book presentation the previous week that light beer and wine are losing sales to hard seltzer because of the attributes (lower calories, carbs, perceived wellness) overlap. White Claw launched in the UK yesterday, its first market outside of North America. White Claw will launch in Australia in October. Sales of SAM’s Truly mixed berry variety pack are up 156% YTD through May 17 while sales of the tropical mixed variety pack are up 563%.
BYND Black Book
With the growth in trends of healthier eating, elevated food-at-home consumption, and meat shortages, the pandemic should be boosting sales of Beyond Meat. According to Nielsen, sales of plant-based meat alternatives have grown 264% during the nine weeks ended May 2. Impossible Foods began the year selling to only 150 grocery stores, and just a month ago, Kroger announced a rollout to all of its 1,700 stores. While sales in the grocery channel have soared US restaurants are removing Beyond Meat’s products from their menus, and the number of restaurants carrying its products has declined sequentially. Meat production bottomed in April and has rebounded in May with supermarket shelves re-stocking. A vegetarian diet is hardly new, but projecting the market opportunity of targeting meat-eaters to eat fake Meat at $35B is a new narrative.
