Staples Insights | Reyes expands in CA (STZ), On-premise open rate (BUD), SPAC Roundup (BSPE, APPH)

Reyes expands in CA (STZ)

Reyes Beer Division, the largest beer wholesaler in the U.S., signed an agreement to acquire Redding Distributing Company in Northern California. Redding will add 700 retail customers and 2M cases. Redding currently carries Molson Coors, Constellation Brands, Heineken, Diageo, Mark Anthony Brands, Sierra Nevada and Boston Beer. Reyes has made four acquisitions in the Northern California market since July 2019. Reyes has been an important partner in Constellation Brands’ growth. Even though Redding already distributed Constellation Brands’ beer, we expect its sales growth to accelerate under Reyes’ ownership.

A couple of months ago we held a conversation with a sales executive at Reyes to get a better understanding of the trends in beer. Click Here for a replay of our call. 

On-premise 92% open, but draft volumes are running 43% lower (BUD)

BeerBoard, which tracks $1 billion in draft sales nationwide, reported 92% of on-premise establishments were open and pouring beer for the Feb. 25-28th period. That is even with the prior pandemic peak period in September and October. 64% of the establishments’ taps are pouring, up from 60% during the last report from Feb. 11-14. The volume of beer being poured per location is -40% YOY, but up 13% from two weeks prior. Florida, which currently does not have restrictions on restaurants and bars, has volumes 32% lower YOY while Minnesota is 66% lower, Illinois is 58% lower, and New York is 39% lower. Domestic beers represent 54% of the volume poured, while craft represents 30.6% and import represents 15.4%.

SPAC Research Roundup (BSPE, APPH)

We are presenting our SPAC research roundup on Bespoke Acquisition Corp. and AppHarvest today at 2PM EST. At current levels BSPE offers asymmetric returns as it proves out its organic growth drivers and scale advantages in a fragmented industry. AppHarvest is on the short bias list for now, because we can not quantify how much higher the shares could appreciate, or identifiable milestones to measure the company's progress against, and we are in the wrong quad for a speculative investment without revenues. Join us for an in-depth look as we vet two recent SPACs.