Lower foot traffic into supermarkets (KR)
YOY foot traffic into grocery stores has widened into the largest gap of the year around the Thanksgiving holiday. The combination of increased restrictions, online grocery growth, and the increased seasonal frequency of visits during the holidays are all behind the divergence. As seen in the chart below, traffic to grocery stores relative to the year's start was 37.5% greater on November 30, 2019. On November 30, 2020, traffic was down 26% to the start of the year. On November 18, 2019, traffic was 20% greater, while on November 18, 2020, traffic was 27% lower.
Off-premise higher-priced wine benefits from drop-in on-premise (STZ)
Domestic wine sales decreased 6% in the year ended November. The 39% decline in on-premise drove the decline while off-premise grew 13%. According to Nielsen, off-premise wine sales grew 9% in the four weeks ended Nov. 28. Off-premise accounts for 45% of the case volume and 23% of the wine market value. Table wine retailing for $20-$24.99 a bottle had the strongest growth of 30%, while wine retailing for less than $8 saw a decrease. Sparkling wine above $100 grew 37% in the year ended Nov. 30. Restaurant wine sales were down 41% for the year ended Oct. 3 (nearly half pre-pandemic). Wine DTC sales grew 8% in November with volume growth of 17%, with lower-priced wine outpacing more expensive wine. The average bottle price of shipments fell 8% to $44.
With the sale of the portfolio of wine brands priced below $10 closing soon, Constellation Brands has concentrated its wine portfolio at the higher end, which is where the growth has been strongest.
Third alcohol ban in South Africa (BUD)
With the recent increase in COVID-19 cases, South Africa has reimposed a ban on alcohol sales and ordered all bars' closure. This is the third ban on alcohol sales for South Africa during the pandemic. A nighttime curfew was extended to 9 PM until 6 AM. In early December, the country limited alcohol sales on Monday through Thursday between 10 AM and 6 PM. The country’s lockdown in April and May also banned all liquor sales. As a result, AB InBev’s Q2 sales declined 60% and in Q3 declined nearly 25% in the country. AB InBev took a $2.5B writedown for the assets in the country. A quarter of the country’s alcohol sales before the pandemic was estimated to be illicit, so the ban has limits. South Africa is the 12th largest beer consumer globally, and AB InBev has nearly 90% of the formal market share.
