Beer imports continue to accelerate in October (STZ)
Total alcohol beverage imports declined 7% by value over the last 12 months through October, as seen in the following chart. Imported beer declined 3% by volume and declined 1% by value over the last 12 months. Beer imports grew 16% by volume and 18% by value over the last three months ended October, accelerating from 10% by volume and 14% by value over the three months ended September.
32% of all imported beverage alcohol came from Mexico over the last 12 months. 71% of imported beer by value comes from Mexico. Constellation Brands represents a majority of Mexican beer imports and 60% of imported beer. Constellation Brands is still catching up on low inventory levels after the brewery shutdowns in Mexico in the spring.
Manhattan grocers suffer from the exodus (VLGEA)
Village Super Market, an operator of 30 ShopRites, 5 Fairway Markets, and 3 Gourmet Garage specialty markets located in NJ, NY, PA, and MD, reported a SSS increase of 6.6% for the quarter ended Oct. 24. The company attributed the same-store increase to the pandemic with higher average basket sizes and lower transactions. Digital sales grew 172% and were a 40bps headwind to OG&A. The company’s “Fairway and Gourmet Garage locations in Manhattan have been significantly negatively impacted due primarily to the city's residential population migration and less commuter and tourist traffic.” Gross margins contracted 40bps ex. Fairway due to pressure from ShopRite’s “Right Price Promise” strategy. Despite the sales growth, net income was flat.
Conventional grocers have outperformed other grocers during the pandemic, so the company’s Manhattan stores were likely a significant drag. Village Super Market has quantified the digital margin drag, but it is not clear if it included all online ordering components.
Avocados from Colombia (AVO)
The Colombian Hass avocado industry has recently formed the Colombia Avocado Board to promote the fruit. Colombian Hass avocados are new to the U.S. Colombia has two avocado harvests, the main one from October to March and a second season from May through August. That covers both Cinco de Mayo and the Super Bowl. Europe and the U.S. are the biggest customers, with imports up over 300% in volume since 2018-19. Production in Colombia has grown from 10,800 acres in 2014 to 41,200 acres this year.
Mission Produce (AVO), a leader in sourcing, producing, and distributing fresh avocados, went public in October at $12 per share. Mexican avocados represent more than 80% of the U.S. market. All of the imports of avocados from Mexico come from the state of Michoacan, which limits growth. Mission Produce has large growth plans for avocados, and it depends on increasing production in a number of countries. The company recently planted 200 acres through farming joint ventures in Colombia and expects production in the next few years.
