Restaurant re-openings increase faster than consumers’ willingness (SYY)
According to Open Table, the percentage of restaurants that have re-opened has continued to steadily increase, as seen in the following chart. Every state and the vast majority of municipalities now allow indoor dining with various restrictions. Most recently, New York City re-opened indoor dining rooms on September 30. Restaurants that have drive-throughs and outdoor patios benefited from the reduced competition during the pandemic.
With capacity restrictions lessened, more restaurants have re-opened, and the industry has had to compete over the people who are willing to eat indoors. A Gallup survey conducted in July showed that Americans are less willing to eat inside a restaurant; the greater the dining capacity is allowed, as seen in the following chart. This could limit the growth in the restaurant industry’s sales as the number of re-openings increases.
Conventional beating Whole Foods (ACI)
Whole Foods was voted as the safest grocery store chain by the research firm Ipsos in June and again in September. Being seen as clean and safe is good during a pandemic, but one of the reasons Whole Foods has been seen as safest was its social distancing measures. The more stringent the social distancing measures, the longer the lines outside the store, and the more lost customer traffic. According to placer.ai Whole Foods, customers were 25% fewer in September and, most recently, 21% fewer on October 4th than a year ago. One area of weakness for Whole Foods is the drop in demand for prepared foods, which is down 75%. Whole Foods’ lunch buffets do not work during a pandemic, and many office workers are eating lunch at home. Other causes of weakness could include Whole Foods’ higher prices and customer relocation in the chain’s trade area. On the other hand, conventional grocers have seen the most strength during the pandemic. The one-stop behavior of consumers’ grocery shopping is a major reason for the strength of conventional grocers.
White Claw locks up cans for 2021 (SAM)
Ball Crop. said last week that North America is short 10B cans this year compared to demand. That represents 9% of 2019’s sales. With very little draft sales, cans have been the container of choice for beer sales during the pandemic. Ball Corp. has 42% of the beverage packaging market share in North and Central America. Ball Corp. expects North American aluminum beverage can stimulate growth to accelerate to 6.3% over the next five years from 3.9% over the past three years, as seen in the following chart. The company has already pre-sold 8B cans of new capacity next year and 25B cans of capacity through 2023. Mark Anthony has locked in 6B of 2021’s new production. Alcoholic beverages are responsible for 50-60% of the new demand, followed by water at 25%. Next year, having enough can capacity may be a governor on sales growth for beer companies – especially in hard seltzer and craft beer. Only 31% of Constellation Brands’ production is canned. In contrast, 70% of Molson Coors products are in cans.