Dear Client:
After stringing together several months of solid growth, import volumes fell into the red during August, per latest figures from Beer Institute.
Imported volumes were down 0.6% in August 2018, about 20,500 barrels shy of the reported imported volume for August 2017.
Just looking at the top ten largest source countries, it’s a wonder import volumes were only down 0.6%. Check it out: Only two of the top ten countries saw an increase in shipments during the month: Mexico the largest source of imports, of course, up 6.4%; and Poland the tenth largest source, up 64.3%. Every country in between then was down, all but one of them (Netherlands, down 2.9%) were down double digits.
But no need to worry just yet. BI chief economist Michael Uhrich explained that August’s “decline in import volumes, which affected European brands most dramatically, indicates a short-run inventory surplus… It does not indicate any meaningful change in import demand fundamentals.” We’ll take Michael’s word on that.
Despite the drop in volume during August, imported volume YTD remains in positive territory, up 4.7% through August.
WILL HURRICANE MICHAEL KEEP TRUCKS OFF THE STREET?
Hurricane Michael has landed in Cuba as a Category 1 hurricane. By the time it hits the U.S. Gulf Coast on Wednesday, it could be a Category 3 hurricane. The National Hurricane Center has warned of a potential “life-threatening storm surge” along parts of Florida’s Coast then, “regardless of the storm’s exact track or intensity.” Florida’s Governor has declared a state of emergency for 26 counties.
We reached out to several distributors in the area to see their plan. Will it keep trucks off the street? None seem terribly concerned, but there are some contingency plans.
“Hopefully this is a Weather Channel storm and not a real storm,” said Elliot Maisel of Gulf Distributing. “They have to sell ad time, so sometimes it’s exaggerated…. But regardless, this storm seems real-ish, and we have a plan in place…. If it’s a real storm our people will be off the streets by 1 p.m. tomorrow, and they’d be back on Thursday at the earliest, depending on the intensity of the storm. Our first concern is for our people and their safety…. Stores will be blown out now, then empty later.”
DOUBLE GREEN HERE TO HELP INDUSTRY GO GREEN
At our Distributor Productivity Summit in August, Double Green CEO Molly Reilly warned the audience of a sustainability tsunami headed our way that could prove to be expensive and disruptive to operations unless distributors get in front of suppliers’ forthcoming “suggestions.”
There’s no doubt that consumer demand for sustainable products is influencing purchase behavior, just look at these stats:
According to a Nielsen survey 66% of consumers will pay more for a product or service if they knew the company was committed to positive social and environmental change. A Unilever study revealed that a third of consumers (33%) are now buying brands they believe are doing social or environmental good, while a Cone Communications Study revealed that 75% of Millennials will take a pay cut to work for a socially responsible company. No wonder ethical claims on packaging have increased seven-fold since 2010 and nearly every publicly traded CPG includes sustainability in their annual report.
But while the brand may be “the one the consumer rewards or punishes, the supplier isn’t the only one impacting its carbon footprint,” Molly said. Due to the stats noted above, she predicts that a well communicated sustainability plan will be an imperative for all supply chain players moving forward.
She pointed to PepsiCo as an example of a company that wants all of their supplier to join the effort in reducing their carbon footprint. According to Molly, an executive from PepsiCo told a crowd at a recent sustainability conference that they’ll rewrite thousands of contracts to ensure compliance if necessary.
Molly suggested that distributors review their suppliers’ sustainability goals and note how their goals have evolved from the supplier making operational environmental commitments in previous years to today’s “total supply chain” commitments.
“[Distributors] are already doing important work, in fact ‘sustainable’ work by delivering hundreds of brands on one truck,” Molly said. “It doesn’t need to be a fight between the environment and the bottom line for everyone to win. Yet, it’s impractical for every business to constantly investigate the most sustainable way to do everything. It’s just not sustainable.”
That’s where Double Green comes in, Molly said. “We made it our business to find the solutions that ensure each business in our awesome industry can stay focused on what they do best, while increasing their profit and decreasing their impact on the environment.”
BEER BRIEFS:
A-B ROLLING OUT A “WEST COAST VARIETY PACK”? We’ve often wondered if Anheuser-Busch would ever drop a variety pack featuring beers from their different High End breweries… and yesterday we stumbled across an interesting photo of just that. The West Coast Variety Pack, as it’s called, was on sell at Costco for $25.99. The 24-pack featured a flagship beer from three different breweries: Golden Road’s Wolf Pup Session IPA, 10 Barrel’s Apocalypse IPA, and Four Peaks’ Kilt Lifter. Is this something we should expect to see more of? Stay tuned.
Until tomorrow,
Harry, Jenn, and Jordan
“I believe that if it were left to artists to choose their own labels, most would choose none.” – Ben Shahn
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BEER SUMMIT 2019 REGISTRATION OPEN. Join us for the 16th Annual Beer Industry Summit, January 27 – 28, 2019 at The Hotel del Coronado in San Diego, CA. Speakers TBA.
Register here: https://www.beernet.com/beer_summit.php
Or give Jessica a ring at 210-805-8006. Looking forward to seeing you there.
———- Sell Day Calendar ———-
Today’s Sell Day: 7
Sell days this month: 23
Sell days this month last year: 22
This month ends on a: Wed.
This month last year ended on a: Tue.
YTD sell days Over/Under: +1
