Texas on-premise alcohol beverage tax receipts recover (BUD)
Texas reports its alcoholic beverages sales tax receipts monthly. In April, alcoholic beverage receipts increased 110% YOY. Compared to March, receipts increased 22% month over month. That represents the highest month of tax receipts since January 2020, as seen in the following chart. In Texas, bars were shut down in mid-March and allowed to re-open on May 22. In late June, bars were shut down again, then re-open again in October by county. Bars were also allowed to reclassify as restaurants since June as long as food sales exceeded alcohol sales.
AeroFarms rebrands (SV)
AeroFarms is rebranding with a new logo, package design and revamped its product portfolio. The company also trademarked a new catchphrase, “Agriculture, Elevated.” The company’s products will now be color-coded on a taste spectrum at retail. Consumers can select their greens based on tasting notes like sweet, earthy, umami, among others, as seen below. The new go-to-market appearance should help with the company’s branding effort, improve trial and improve velocity.
AeroFarms seems to understand the branding and marketing to consumers much better than AppHarvest (APPH). Due to the higher prices necessary for vertical farm-grown produce, the growers need to brand the product to earn its premium rather than become a higher-priced commodity. Both companies are on our short list, but AeroFarms’ business model is superior to AppHarvest’s in several ways. Both companies’ financials are too early to be attractive investments in the public markets.
Hard seltzer innovation (SAM)
According to Nielsen, YTD hard seltzer sales are up 46%, surpassing $1B in the off-premise channel. 60% of the sales growth is from new SKUs, which account for about 20% of hard seltzer sales. Innovation will become increasingly important for hard seltzer’s growth in the future. The top-selling new SKU this year Truly’s Iced Tea hard seltzer mixed pack. The SKU that is down the most in sales is White Claw’s variety pack #1. As of April 17, there are 596 hard seltzer SKUs, up 10 from the end of 2020. 396 of the SKUs are up YTD while the other 200 are down. Bump Williams is forecasting growth for hard seltzer to be 60% this year.
