On-premise 90% open, but draft volumes are running 43% lower (BUD)
BeerBoard, which tracks $1 billion in draft sales nationwide, reported 90% of on-premise establishments were open and pouring beer for the Feb. 11-14 period. That is even with the prior Jan. 28-31 period. The open rate is still below the 92% level it peaked during the pandemic from Sept. 11-13 to Oct.23-25. 60% of the establishments’ taps are pouring, up from 58% during the last report from Jan. 28-31. The volume of beer being poured per location is -43% YOY and -1.2% from the prior Jan.28-31 period. Florida, which currently does not have restrictions on restaurants and bars, has volumes 30% lower YOY while Minnesota is 69% lower, Illinois is 63% lower, and New York is 41% lower. Domestic beers represent 52.8% of the volume poured, while craft represents a third and import represents 13.9%.
Low dairy milk prices make it difficult to reverse trends (STKL)
A study from Mintec found that dairy milk is priced too low relative to its component costs. Plant-based milk’s retail prices can be twice as much as dairy milk. Plant-based milk profits are several times greater than dairy milk, even though the latter has no R&D or marketing costs. A comparison of the typical costs between the two milk producers can be seen in the chart below. Two of the largest dairy milk companies, Dean Foods and Borden, filing for bankruptcy in recent years, speaks to the low profits. The thin margins in dairy milk make it challenging for the industry to invest in turning around the fortunes. The excess supply and shrinking demand are difficult challenges as well.
Lemonade launches to add to hard seltzer competition (SAM)
Mark Anthony Brands announced that Mike’s Hard Lemonade Seltzer has launched in retail stores this week. Despite its deep lemonade experience, Mike’s Hard Lemonade had not launched a seltzer previously. According to IRI, the lemonade flavor was Truly’s top-selling SKU, with sales of $269M in the off-premise channel in 2020. Molson Coors Vizzy, Bud Light Seltzer, and Corona are all launching lemonade hard seltzers this year as well. Mike’s Hard Lemonade Seltzer has launched a 12-can variety package with similar nutritional aspects to most other hard seltzers. According to Nielsen, YTD through February 6, Mike’ Hard Lemonade brand sales were up 19.2%, while White Claw sales were up 38.3%. In comparison, Truly’s sales were up 132.4%, and Twisted Tea sales were up 50.4%. The hard seltzer category sales were up 78.6% YTD. After the close today, Boston Beer reports and expectations are high for an update to guidance with the early momentum in the year before lapping the COVID-19 comparisons. The competitive intensity picks up in the spring.
