Truly Punch (SAM)
Truly is launching a new flavor called Punch. Last month Truly launched Iced Tea and most recently launched Extra Hard Seltzer, containing 8% ABV. Truly sales are up 138% YTD through Feb. 21. The new products are driving Truly’s sales while the original citrus variety pack has declined 15%. Truly will also launch Lemonade Freeze Pops at 5% ABV this summer. Truly will also support the new launches with a $40M media campaign.
To help us dig into the latest trends in hard seltzer and the beer category, we are hosting a call with a beer distributor on Friday, March 19th at 2 PM EST. Our speaker is at a top 50 distributor and has sampled the new Punch flavor. His distributor is carrying 45 new brands this year, 20 of which are hard seltzers. We will discuss what to expect as the pandemic and the shift to off-premise is anniversaries. Many in the industry have big expectations this year, but we will discuss who is likely to exceed the plan and likely miss it.
To send any questions ahead of the call, email them to .
Grocery sales decelerate (KR)
The week ended March 7, total CPG demand decreased 2% YOY, decelerating from +4% in the week prior, as seen in the chart below. The first week of March lapped a +12% increase in the prior year as the pandemic was beginning to dominate the news cycle, but widespread restrictions had not yet begun. The decline was driven by a significant drop in demand for the non-edible department to -22% from -10% in the week prior. Home care fell 20% YOY, decelerating from -4% in the week prior. Tobacco was the only non-edible category that saw a YOY increase in the week. The edible department decelerated to +1% from +6% in the week prior. The beverage alcohol category saw the least deceleration to +9% from +12% in the week prior. The meat category slowed to +2% from +8% in the week prior. The produce category had a modest deceleration to +4% from +7% in the week prior. Next week will lap the largest week of stockpiling.
The return to tasting rooms (NAPA)
Napa County, California, is nearing a revision from red to orange on its COVID-19 rating scale. Orange would allow wineries to hold indoor tastings. According to the county public health officer, if the county can meet the criteria for the next two weeks, it could move to orange on March 30. Napa County will also begin to accept applications for temporary event permits for live events, which would bring more people back to the region.
Both Duckhorn (NAPA) and Vintage Wine Estates navigated the pandemic with sales growth, but the return of consumers to their tasting rooms will bring back high margin sales in 2021. Duckhorn is set to be a public company imminently. The Bespoke Acquisition Corp. (BSPE) merger is expected to close in May. Duckhorn's targeted valuation is 50% higher than BSPE's valuation. We are hosting the management team of Bespoke Acquisition Corp. and Vintage Wine Estates in a fireside chat on Tuesday, March 23rd at 2 PM.
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