White Claw capacity plans (SAM)
Mark Anthony Brands announced it would build a $400M production facility in Columbia, South Carolina. The facility would be the third built for White Claw in the past two years. Last week, White Claw maker announced that an expansion at a co-packing facility and two new production facilities in New Jersey and Arizona were complete. Construction at the South Carolina facility will begin very soon, with the target completion date for the one million sq. feet plant in the summer. The plant in Arizona had an expedited schedule with the announcement in January and completion in October. Mark Anthony Brands has also reportedly secured six billion slim cans for 2021. So not only will the availability of White Claw dramatically increase in 2021, but the offering from competitors will be even greater. There are more than 100 hard seltzer brands now, and it is growing every week. Anheuser Busch InBev (BUD), for one, has cut the time to develop new products by 75% and expects to use its marketing machine to gain share in hard seltzer as it has in craft beer and light beer. BUD is also spending $150M this year to expand its Georgia production facility. Hard seltzer sales were up 104% for the two-week period ended Oct. 31, with White Claw maintaining a 50% share of the category and Boston Beer’s Truly with 25%.
Online grocery demand re-accelerates (KR)
According to IRI, the four-week period ended November 1 has seen a 64% YOY increase in online CPG demand. That represents a 5% acceleration from the previous four weeks, as seen in the chart below. Brick & Mortar's e-commerce demand increased by 88% in the four-week period ended November 1, decelerating 4% from the previous four weeks. According to the latest Brick Meets Click/Mercatus Grocery Shopping Survey, U.S. monthly active users of grocery delivery and pickup services totaled 37.5M households at the end of August, up 133% YOY. Delivery customers increased by 180% to 22.1M in August. The average order value also grew based on the number of times a shopper used a specific service within the last three months. Customers who completed their first order with a specific grocery or mass retailer spent an average of $76. The average ticket rose to $91 (+20%) for their second order, $97 (+7%) for their third order, and $101 (+4%) for their fourth-order. For purchases beyond the fourth, the average spends leveled off, the study found. Online grocery penetration accelerated during the pandemic. Customers were pushed to trial during the pandemic, and they like the experience. Profiting from the channel shift is a different problem for the grocers.
More restrictions for bars and restaurants, how many will stay open? (SYY)
Several states have tightened restrictions on bars and restaurants in the last couple of days. Members of Joe Biden’s COVID advisory team have spoken publicly of additional restrictions to stem the increase in infections. National and regional chains of restaurants have outperformed their smaller competitors during the pandemic, but closures have been widespread. As measured by Womply, a CRM provider, the closure rate of local restaurants and bars can be seen in the following charts. The closure rate of local restaurants has been slowly increasing since the low of 19% at the end of June to 25% at the end of October. For restaurants and lounges, the percentage processing transactions at the end of October was 34%, improved from the recent high of 40% at the end of August. Additional restrictions should drive the closure rate higher, leading to more bankruptcies unless another stimulus package was passed. A higher closure rate will help the survivors with a less competitive environment on the "other side" of the pandemic.
