Food delivery continues to heat up (GRUB)
In the last week, Uber (covered by Jay Van Sciver) has agreed to purchase Postmates for $2.65B, and Instacart raised $100M at a $13.8B valuation. A month ago, Instacart raised $225M at a $13.7B valuation. Less than a month ago, DoorDash raised $400M at a $16B valuation, up from its previous valuation of $13B. Uber has been planning to launch its Cornershop grocery delivery business later in July in select markets. Grocery delivery has grown significantly during the pandemic, limited by the capacity of the retailers and delivery providers. In April, Instacart said it reached profitability for the first time. In May, Instacart said order volumes had increased more than 500% YOY. The company claims to have the highest market share in grocery delivery. Instacart has been building new services and features and expand its ad service, which allows brands to promote their merchandise in the platform. There have been more overlap with restaurant and grocery delivery companies as they expand their offerings. The sector will likely prove to be more competitive, and further consolidation/partnerships should be expected.
US beer imports plummet (HEIA)
Imported beer declined 4.9% by volume and declined 1.9% by value over the last 12 months ended May. In the previous three months, imports fell 24.1% by volume and declined 24.1% by value. 70.5% of imported beer by value comes from Mexico. Constellation Brands has more than half the market share of imported beer in the US. Constellation Brands’ beer shipments declined 6.3% for the quarter ended May. Beer production in Mexico was shut down for more than 70 days beginning in early April due to COVID-19. The declines had a much more significant impact on Heineken’s Mexican exports to the US.
Exported beer declined 27.2% by volume and grew 3.9% by value over the last 12 months. In the previous three months, exports fell by 43.5% by volume and declined 17.6% by value. 16.3% of exported beer by value goes to Chile (go figure).
Can shortage (SAM)
The supply of aluminum cans has tightened due to the shift to off-premise beer sales during the pandemic. Ball Corporation, the largest can manufacturer in the US, said, “certain canned beverage SKUs have been in short supply.” The shortage is most acute in slim 12-ounce cans; the type hard seltzer is typically packaged in. “sixteen-ounce cans are going to be a problem this summer,” according to the CEO of American Canning. 16-ounce cans are the type typically used by craft brewers. Craft beer manufacturers have had to switch the vast majority of their draft production to cans, increasing the demand for cans. Large manufacturers will not have an issue getting supply. The majority of Constellation Brands’ packaging is glass, which is made at their manufacturing sites in Mexico. The shortage poses a problem mostly for craft brewers and new hard seltzer entrants.
