Mexican beer imports hold steady (STZ)
Total beverage alcohol imports declined 4% by value over the last 12 months ended January 2021, as seen in the chart below. Over the past three months, beverage alcohol imports increased 13%. 34% of all imported beverage alcohol by value came from Mexico over the past year.
- Beer imports grew by 1% by volume and grew 3% by value over the last 12 months. Over the last three months, beer imports grew 22% by volume and 24% by value. This compares to 22% growth in volumes and 23% by value in Q4. 72% of imported beer by value comes from Mexico. Constellation Brands represents a majority of Mexican beer imports and 60% of imported beer. Constellation Brands imports have continued to grow at a high rate many months after the resumption of production in Mexico.
- For the last 12 months, imported packaged spirits grew 3% by volume and declined 6% by value. Over the last three months, volumes grew 16% by value and volume.
- For the last 12 months, import packaged wine grew 10% by volume and declined 9% by value. Over the last three months, volumes grew 10% and grew 1% by value. Bulk wine imports grew 13% by volume and 20% by value over the last 12 months. Over the last three months, bulk wine imports grew 6% by volume and 7% by value.
Treasury Wine Estates in play (TSRYY)
There were reports in the media yesterday that Pernod Ricard may be interested in acquiring some or all of Treasury Wine Estates. Pernod Ricard is France’s largest drinks manufacturer owning a variety of wine and spirits brands. Treasury Wine Estates reportedly received a A$15.67 per share offer ($6.9B). Treasury Wine Estates’ business has been challenged by the pandemic and China’s retaliation with Australian wines' tariffs. The 169% Chinese tariffs on Australian wines have caused the company to sell its brands in other markets. Treasury Wine Estates is in the midst of trying to sell a portfolio of lower-priced U.S. wine brands. The company is following Constellation Brands’ strategy in exiting the lower-priced brands. Sales of Treasury Wine Estates' top five brands declined 1.1% in 2020 compared to a total sales decline of 7%. Only two of its top five brands had a sales increase, 19 Crimes and Matua, while Beringer, Lindemans, and Sterling declined.
2021 looks to be an active year in the public markets with the IPOs of Vintage Wine Estates and Duckhorn. Vintage Wine Estates is well-positioned to be an acquirer in the sector. The M&A in the sector provides more visibility on valuation levels.
Canadian beer sales (TAP)
Beer volumes in Canada have been relatively flat in 2020. Canadian domestic beer sales decreased 3.1% YOY in December after increasing 1.0% measured in volume in November. Imported beer sales fell 28.3% in December after falling 17% in November and October, as seen in the following chart. Total beer sales measured in volume decreased by 7.4% in December and 1.7% in November. Exports increased 6.6% in December, accelerating from 2.8% in November. For 2020 domestic beer sales decreased 0.1% by volume while imports decreased 7.9% and exports decreased 3.0%.
