Beer sales decelerate for the third week
According to Nielsen, the beer category in off-premise channels grew 18.2% for the week ended May 30, as seen in the following chart. Hard seltzers grew 250% over the two weeks of Memorial Day. Mexican imports grew 17.5%, super premiums grew 16.4%, FMBs ex-seltzer grew 15.4%, craft beer grew 13.7%, premium lights grew 7.5%, premium regulars grew 6.9%, and budget beers grew 3.2%. In California, the southern part of the state began to outpace from the northern part of the state in May. There is some speculation that is due to re-importing Grupo Modelo beers back into Mexico. Twelve packs continued to have the strongest growth rate of 38.1%, followed by 30 packs up 24.8%, 24 packs up 21.4%, while six packs were only up 8.5%. Some deceleration should be expected as more on-premise businesses re-open.
U.K. grocery spending remains elevated, led by frozen food (NOMD)
Grocery channel demand remained healthy for the week ended May 30. The following chart illustrates total grocery store sales in the U.K. and the frozen category indexed to pre-COVID levels, as reported by IRI. The frozen category, benefiting from the growth in food preparation, interest in freshness and wellness, and convenience, have outperformed the rest of the grocery store. Frozen foods have accelerated in the past two weeks, from 124 to 136.
Nomad Foods, as the leading frozen food manufacturer in Western Europe, is well-positioned to benefit from the shift in meal consumption. The U.K. is Nomad Foods' largest market at 31% of sales.
Beer flows south of the border (STZ, BUD)
The Beer Institute, a national trade group, reported that imports from Mexico declined 28.5% in April YOY. Year to date imports from Mexico is down 3.8%. The restrictions on beer production the Mexican federal government put in place in early April due to COVID-19 was lifted on June 1. The federal government left the pace of COVID-19 restrictions being lifted to a color-coding "stoplight" system for the different phases of the re-opening of businesses. Every state is currently at the maximum risk level, but the federal government left it up to the states to interpret the implementation. The states can determine which businesses are essential, including beer production. Beer production resumed in Mexico City on June 1. Mexico City is the location of a major Groupo Modelo plant, as well as 21% of the country's craft beer plants. Supermarket chain Soriana and the convenience store chains OXXO and 7-Eleven all announced that they had resumed beer sales.
Constellation Brands said two weeks ago that it expected full shipments to resume by the second half of FQ2. With many breweries in Mexico resuming production last Monday, a month to brew and bottle, and one to two weeks for transportation, the company appears to be in line with that schedule.
