Beer category re-accelerates (BUD, SAM)
Beer category dollar sales increased 22.1% for the week ended June 6. The beer category off-premise sales have increased by 21.4% so far during the COVID-19 outbreak. Total off-premise alcohol sales for the week increased by 24.1% compared to last year. Hard seltzer sales grew 255%, similar to the previous two weeks. Super-premium beers grew 22.8%, driven by Michelob Ultra’s 30.5% growth. Craft beer sales increased 16.5%, led by Molson Coors’ Blue Moon’s 31.5% growth. Mexican imports grew 19%, accelerating 17.5% the previous week. FMBs excluding hard seltzer grew 19.3%, driven by Mike’s Hard Lemonade’s 30% growth and Boston Beer’s Twisted Tea’s 34.8% growth. Premium light sales increased 9.8%, driven by Miller Lite’s 9% growth, Coors Light’s 7.5% growth, and Bud Light’s 1.7% growth. Large pack sizes continued to exhibit the highest growth with 24 packs up 27.7%, 30 packs up 23.4%, 12 packs up 42.5% while six packs were up 12.3%, and single serves were up 6.3%.
Operating capacity limits are another headwind for restaurants (SYY)
The Colorado Restaurant Association released the results from a survey of 220 restaurant operators in the state between June 1 and June 9. Eight of ten restaurants are operating below 50% capacity for indoor dining because there is also a 50-person limit. 36% of restaurants are operating below 29% of average capacity. 56% of restaurants surveyed said they would consider closing permanently in less than three months. 7% said they would consider closing in less than one month. There is a demand for dining inside, as 66% said they are either turning away people or forcing them to wait. 32% are turning away more than 50% of their standard capacity. Patio seating has benefited those restaurants that can offer it, but that is only 27% of the restaurants. 41% of restaurants have hired back less than 50% of their standard capacity. The reduction in the operating capacity for restaurants will limit the revenue per restaurant for the distributors.
Meat production has resumed despite high absenteeism (TSN)
According to the United Food and Commercial Workers International Union (UFCW) nationwide, 30-50% of meatpacking employees were absent last week. Infections in rural areas around the meatpacking plants have been an ongoing problem. In Kansas, one-third of all COVID-19 cases in the state are meat workers. The union represents about 80% of U.S. pork and beef production. Daily pork production was down by as much as 45% in late April when 20 plants closed because of COVID-19 outbreaks. Production resumed after President Trump’s April 28 order telling meatpackers to remain open. The union told Reuters that major pork plants are running at about 75% capacity. The meatpacking plants have shifted employees to kill lines from more labor-intensive areas, which limits some of the products. According to the USDA, the number of hogs processed on Friday was down 12% from the peak pre-COVID-19.
