CGA: On-Premise Sales Velocity +9%, Check Value +8%; Super Bowl Boosts Velocity in Phoenix +35%
Both sales velocity and check value at bars and restaurants nationwide increased by nearly double-digits in early February, according to CGA, the on-premise arm of market research firm NielsenIQ.
Sales velocity increased +9% for the two weeks ending February 11 compared to the same period in 2022. Check value increased +8%, CGA reported. Ticket count was somewhat flat, but increased +1%.
Of the key states CGA tracks, Illinois led in velocity at +12%, followed by New York (+9%). CGA also tracks sales and surveys consumers in California, Texas and Florida. Nearly three-quarters (72%) of respondents in those states said they have been out for a meal in the last two weeks, a 4% increase compared to the same period last year. Nearly 40% have been out for drinks, a -1% decline compared to last year.
Leading up to the Super Bowl, which took place on February 12, on-premise velocity in the host city and state of Phoenix, Arizona, increased +35% compared to the previous week.
“Between Tuesday and Saturday of the latest week, each day in Arizona saw a double-digit uplift, with the greatest increase versus the previous week occurring on Thursday, February 9 (+36%),” CGA wrote.
Nearly half (44%) of survey respondents told CGA they planned to bet on the game via fantasy sports platforms and other sports betting apps.
Of respondents who planned to place bets during the Super Bowl, 86% told CGA they were more likely to order drinks in a bar or restaurant while watching a game for which they had bet; 85% said they were more likely to stay at an establishment longer if they won a bet.
Heineken Buys Back €1 Billion in Shares from FEMSA, Reports Full-Year Earnings
Heineken N.V. is repurchasing €1 billion in shares of stock from FEMSA, the Mexican corporation that owns a 15% stake in the Dutch brewer.
Earlier this week, FEMSA, which has owned a piece of Heineken since 2010, announced plans to divest of its full stake in Heineken over the next three years. FEMSA owns 12.3% of Heineken Holding and a separate 8.6% of Heineken, N.V., with a market value of around €2.8 billion and €4.7 billion, respectively, according to Bernstein Autonomous.
Heineken’s purchase of shares today included 7,782,100 shares of Heineken (valued at €708 million) and 3,891,050 of Heineken Holding N.V. (valued at €292 million). The purchase was part of FEMSA’s sale of €1.9 billion in Heineken shares and €1.3 billion in Heineken Holding N.V. shares. FEMSA also offered €500 million in exchangeable bonds.
The combined equity and bond offerings, the latter of which Heineken did not participate in, accounted for half of FEMSA’s interest in Heineken.
Also this week, Heineken N.V. reported its full-year earnings. Global highlights included:
- +30.4% revenue growth;
- +21.2% net revenue;
- +6.9% beer volume;
- €2.682 million in operating profit;
U.S. branch Heineken USA’s (HUSA) net revenue “declined slightly” due to “lower volume impacted by supply chain disruptions” and a softer market, only partially offset by price increases. Ocean freight presented an issue with getting imported Heineken to HUSA, “where our competitive position did not allow us to fully offset this in price,” CFO Harold van-den Broek shared.
“The disruptions have disproportionately affected Heineken and are expected to stabilize in the fourth quarter,” chairman and CEO Dolf van den Brink added.
Growth continued for Heineken 0.0, which is the top-selling non-alcoholic beer in the U.S, Mexico and Brazil, van den Brink said. Dos Equis increased volume “in the low teens,” due to the on-premise recovery and growth of Dos Equis Lime & Salt.
On a worldwide basis, Heineken’s low- and no-alcohol portfolio grew volume low single digits, “with double-digit growth in more than 20 markets,” van den Brink said. The non-alcoholic portfolio, led by Heineken 0.0, was up “high single digits.”
In the Americas, net revenue increased +15.8%, driven by Mexico and Brazil. Beer volume in the Americas increased +6.2% and was up “mid-single digits ahead of 2019.” Price/mix increased +14.3%, due to increased pricing. The company’s operating profit declined -16.3% in the Americas, “as the region was disproportionately impacted by higher input and logistic costs, particularly ocean freight into the U.S. where our competitor position does not allow offsetting all this fully in price.”
Kroger and Albertsons to Divest of Around 300 Stores to Quell Regulatory Concerns
To mitigate regulatory concerns ahead of their proposed merger, major supermarket chains Kroger Co. and Albertsons Companies are planning to divest of 250-300 stores, according to a Reuters report.
The merger has drawn skepticism from both lawmakers and consumer groups, who allege that the combination of two of the country’s largest grocers could result in even higher prices than are currently felt amid inflation. In the proposed deal, Kroger would acquire Albertsons for $24.6 billion. Combined, the two chains operate nearly 5,000 stores nationwide.
To gain regulatory approval for its 2014 acquisition of Safeway, Albertsons divested 146 stores to regional West Coast chain Haggen for $300 million, according to Reuters. Months later, Haggen filed for bankruptcy, for which it blamed the Albertsons deal, and Albertsons bought the stores back for the same price.
For previous coverage of the proposed merger, follow this link.
Constellation Brands Tops IRI’s CPG Growth Leaders List
Constellation Brands’ portfolio of popular Mexicans imports Modelo, Corona and Pacifico propelled it to the top spot on market research firm IRI’s ranking of large CPG companies that drove growth in 2022.
Modelo contributed $689 million in growth last year, followed by Pacifico (+$69 million) and Corona ($49 million). Together, they account for 86% of Constellation’s growth, IRI noted. Energy drink maker Monster, which acquired the CANarchy Craft Brewery Collective in early 2022, was the No. 10 company on IRI’s list of leading large CPG brands. IRI, which has compiled the list for 11 years in conjunction with the Boston Consulting Group, defines large companies as those with more than $6 billion in sales.
IRI also called out Constellation’s Meiomi wine as a brand that’s helping the company win with consumers seeking “social indulgence,” in addition to Modelo and Pacifico.
Constellation topped the list for three consecutive years in 2017, 2018 and 2019. It ranked No. 3 in 2021.
BLS: Producer Price Index Increased in January 2023
The producer price index (PPI) for breweries ticked up +1 basis point in January 2023 from the prior month, according to data from the U.S. Bureau of Labor Statistics (BLS) parsed by the Federal Reserve Bank of Saint Louis’ economic research department.
The PPI for breweries remained relatively stable throughout the pandemic, but mounted a steep increase beginning January 2022 and has reached its apex with an index of 229. The measurement is baselined by an index of 100 in June 1982, meaning PPI has more than doubled in the past four decades.
Brewers Association chief economist Bart Watson noted some inputs, such as freight and cans, have declined, while others, such as malt and paperboard, have increased.
“I would summarize as ‘things aren’t getting much worse, but they also aren’t getting much better,’” he wrote.
New PPI numbers out today. I would summarize as "things aren't getting much worse, but they also aren't getting much better." Freight/cans down. Malt/paperboard up. pic.twitter.com/UL82Bn35FG
— Bart Watson (@BrewersStats) February 16, 2023
New Belgium Launches Business-Focused Podcast
New Belgium Brewing has launched a business-centric podcast about the Fort Collins, Colorado-headquartered brewery’s people-focused strategy.
Titled “Green Flags: How to Humanize Business and Get Rich Trying,” the podcast is co-hosted by New Belgium senior director of communications and public engagement Adam Fetcher and Maude Standish, executive director of ODD Media, which produces the podcast.
“Green Flags is a podcast for everyone who thinks our system can do better – and wants to help,” Standish said in a press release. “We grounded each episode in the experiences of regular folks who spend most of their waking hours working for businesses, and then we go out and show how business can work for us instead – and actually boost their bottom line in the process.”
Guests include Climate Voice founder Bill Weihl, business author Mike Robbins and New York University Stern School of Business professor Julianna Pillemer.
Other breweries producing podcasts include Allagash Brewing, Reuben’s Brews, and Harpoon Brewery.