A gloomy December for beer sales in England (TAP)
The British Beer & Pub Association said its research shows that pub beer sales will be down as much as 90% this month. That represents 270M fewer pints. This December, England’s Tier 2 system requires pubs only to serve alcohol with a substantial meal. England’s hospitality industry usually earns about 40% of its revenues between Halloween and New Year’s Eve. On Wednesday, London is moving into Tier 3, its strictest level of restrictions. For pubs, bars, and restaurants, Tier 3 requires them only to be open for takeaway, delivery, or click and collect services. Molson Coors, Anheuser Busch InBev, and Heineken all have roughly 17% share of the U.K. market.
Restaurant operators more pessimistic (SYY)
As of Dec. 7, the National Restaurant Association (NRA) said that 17% of restaurants, more than 110,000 in total, were either closed permanently or long-term. On average, these restaurants had been open for 16 years. Only 48% of the former restaurant owners said they would likely remain in the industry in any form in the months or years ahead. The NRA’s survey of 6,000 restaurants also found that 87% of full-service restaurants reported an average decline of 36%. 83% of full-service operators said they expected an even worse decline in the next three months.
If the number of restaurants' growth was a growth driver for the restaurant distributors pre-pandemic, a multi-year reduction in the number of restaurants should limit the recovery.
Enough CO2 to keep the vaccine cold (BUD)
The first shipments of Pfizer’s COVID-19 vaccine began over the weekend from Portage, Michigan. The vaccine must be kept at freezing temperatures that require dry ice. The Compressed Gas Association (CGA) said it expects the country’s carbon dioxide supply to be sufficient to meet the extra demand. During the spring and summer, there were reports of shortages of CO2 for the beer industry. Most commercially used CO2 is a byproduct of ethanol production. When gasoline production dropped suddenly from stay-at-home orders, the supply of CO2 fell.
The three industries that use the most CO2 are food, alcoholic and non-alcoholic beverages, and dry ice. Dry ice typically accounts for roughly 15% of demand. The CGA anticipates vaccine shipping and storage to increase the demand from dry ice by 5%. Pfizer’s vaccine requires a temperature of -70 degrees Celsius, while Moderna’s is stable at regular freezer temperatures of -20 degrees Celsius. Because the dry ice keeps melting at the vaccine injection sites, the extra demand will be continuous.
It is probably more likely that the supply of dry ice production is maxed out before significantly impacting the supply of CO2, but bottlenecks and shortages seem likely. If there was another shortage of CO2 small craft brewers are again the most likely to experience production curtailments in the beverage space than the large beverage manufacturers as they were in the summer.
