Beer imports from Mexico surge in July (STZ)
Total beverage alcohol imports (including bulk and packaged) declined by 5% by value over the last 12 months ended July and declined by 21% by value in the previous three months ended July. This compares to a 2% decline in the twelve months ended June and a 24% decline in the three months ended June, as seen in the following chart. 29% of all imported beverage alcohol by value came from Mexico over the last 12 months.
Imported beer declined by 7% by volume and declined 4% by value over the last 12 months ended July. In the previous three months ended July, beer imports fell 20% by volume and declined 18% by value. This compares to a 4% decline by value over the 12 months ended June, and a 27% decline over the three months ended in June. This implies July imports were 27% higher than the May and June period. 71% of imported beer by value comes from Mexico. The beer production stoppage in Mexico was responsible for the supply shortages that Constellation Brands and Heineken both experienced. Production and shipments resumed in June. Heineken warned on its Q2 call to not extrapolate its shipment volumes in June forward as it was restocking. Heineken’s warning would suggest Constellation Brands has seen more of the improvement in July imports.
Imported packaged spirits for the last 12 months ended July was flat by volume and declined 6% by value. In the previous three months, volumes fell 11%, and value dropped by 24%. 29% of all imported packaged spirits by value came from France. Imported packaged wine for the last 12 months grew 7% by volume and declined 6% by value. In the previous three months, volumes grew 8%, and value declined 22%.
Lower meat prices at retail ahead (TSN)
Retailers have responded to the improved supply of beef and pork with more features and promotions in circulars as seen in the following chart. The increase in features and promotions are bringing consumers lower prices. Ahead of the Labor Day weekend, the ground beef activity index was lower YOY for the week ended August 28 and in line with levels in March pre-pandemic. According to Len Steiner of The Daily Livestock Report, “Round beef cut features last week were up 89% from a year ago and the average feature price was down 2% compared to last year. Top sirloin steak was the most featured item, and the average price was 13% lower than last year.” Pork is also seeing an increase in features and prices. “Pork features are almost double what they were after the Memorial Day weekend. As was the case with beef, pork feature prices are now lower than a year ago. Overall, loin features for the week ending August 28 were 17% lower than last year. The weighted average feature price for the week was also 15% lower than last year, a significant change compared to June when feature prices were up by more than 35% from last year.”
Plant-based foods continue to attract more investment (BYND)
Impossible Foods raised $200M in its latest funding round in August, valuing the company at $4B. This is up from the $3.6B valuation when it raised $500M in March. The company will use the funds to expand its R&D programs, accelerate manufacturing investments, grow at retail, and internationally. The company has raised $1.5B since its founding in 2011.
It’s not just start-ups investing in plant-based meat but the large food companies, including Tyson Foods, Conagra, Perdue Farms, and Kellogg as well. Ryan Riddle, the R&D specialist of vegetarian meal solutions at Nestle USA, said, “It’s one of the most important spaces that Nestle is investing heavily in. I don’t think that it’s a short-term fad that we’re trying to chase. We believe that it’s the future of food.” Since Nestle purchased Sweet Earth in 2017, it has introduced 45 vegetarian and plant-based products. Nestle has also introduced a range of plant-based alternative beverages under the Natural Bliss and Starbucks lines. In Q2, sales of Nestle’s vegetarian and plant-based food products grew by 40%. To give us a supermarket’s perspective, we will be speaking to the buyer for plant-based products for a 250-store chain next week. Stay tuned for details.
