On-Premise Closed for Business
The on-premise is now shut down in more than half the states in the U.S. In our latest tally, we identified 28 states that have ordered bars and restaurants to shutter. Here’s what the updated list looks like:
- Florida (bars, nightclubs shut down, but restaurants can still operate for now at 50% capacity)
- New Hampshire
- New Jersey
- New York
- North Carolina
- Rhode Island
- South Carolina
- West Virginia
AND MORE CITIES MAKE THE CALL, like Austin, where the Travis County Judge (yes!) prohibited bars from allowing consumption on the premises through May 1, and restaurants from operating their common areas through the same date, though they encouraged “take-away or no-contact delivery food service.” No such complete order from Texas yet.
PLUS, NEW YORK CITY LIKELY TO ENACT “SHELTER IN PLACE” DIRECTIVE. New York City Mayor Bill de Blasio signaled Tuesday that a “shelter in place” order could come down in the next 48 hours. “This is a reality that is being talked about because this crisis continues to grow; we are all deeply concerned about the direction [of the virus trajectory]… it’s quite clear this is a fast-growing crisis,” he said in a briefing.
And “even though a decision has not yet been made by the City or by the state… New Yorkers should be prepared right now for the possibility of a shelter in place order. It has not happened yet, but it is definitely a possibility at this point.” Our money is on yes: New York state has the most cases in the country, at about 1,500.
BUT… MORE STATES LOOSENING BEV ALC TO-GO LAWS FROM RESTAURANTS–PARTICULARLY FOR MALT BASED PRODUCTS
Earlier this week we reported that New York and New Jersey restaurants and bars were provided waivers to allow for take-out alcohol sales.
Now more states are looking to loosen regulations, at least temporarily, so that consumers can get booze to go from restaurants.
Among the states we are hearing are loosening bev alc to-go laws: MO, WA, OH, and PA.
The allowances vary. For instance, yesterday, The Oregon Beer & Wine Distributors Association sent members notice to “help your restaurants sell carry out and delivery alcohol,” as licenses to allow to-go malt and cider sales, which few local restaurants have, are now being fast-tracked for on-premise outlets.
Apparently, the OLCC is granting a 90-day “temporary authority” for on-premise outlets to deliver and sell alcohol to go. But such outlets “will need to get an additional O-License from the OLCC in order to sell carry-out alcohol and deliver alcohol to consumers.”
“The OLCC will prioritize granting these new delivery/to-go sales licenses (the O-License) for restaurants,” the wholesaler association said. (Off premise outlets are already “fine for both to-go and for delivery.”)
As we understand, most of the states that are loosening their bev alc to-go laws are doing so under the ‘malt based’ category. Stay tuned.
DISTRIBUTORS ACROSS THE NATION SEEING OFF PREMISE DEMAND “SIMILAR TO A JULY 4 WEEK DELIVERY”
Earlier this week came news that the Bay Area had handed down “the strictest measure” yet in the U.S., announcing a “shelter in place” order for nearly 7 million residents.
We reached out to some distributors in the area to see how the stay-at-home directive could affect their business.
BEER TRUCKS STILL ROLLING IN THE BAY. While the order states that “essential” business are the only outfits allowed to stay open during this period (grocery stores, pharmacies, hardware stores, etc.), we understand there is a reference to “other consumable goods” buried in there, and beer distributors have taken that as a green light to keep their trucks rolling. And those trucks are filled to the brim it sounds like.
WITH 4th of JULY-TYPE DELIVERIES. One distrib in the area told us they had a “huge day” yesterday (the first official day of the “shelter in place” order), comparing it to “a July 4th week delivery.” The same distrib also shared that they set a company record for seltzers yesterday.
NOT JUST CALIFORNIA, THOUGH. A Michigan distributor shared a similar story about current volumes moving through the off-premise:
“We are looking at summer/pre-holiday volumes going through the system for off-premise,” they said. “Supercenters and warehouse clubs are ordering full pallets of large packs of seltzers and American Light Lagers. Craft is not seeing the spike to the extent premium products are. Bars and restaurants are attempting to make carryout and delivery food options work. Some are trying to sell alcohol, however it is not a volume play.”
We heard a similar story from New Hampshire; seeing “huge demand that exceeds 4th of July.” (Not a huge surprise, it’s a big grocery state.)
BUT: OFF PREMISE WILL LIKELY NEED TO BE UP HIGH DOUBLE DIGITS TO COUNTER RESTAURANT LOSSES. But as Nielsen’s SVP of bev alc and cannabis, Danny Brager, pointed out, sizing up the data: “Since on premise accounts for roughly 20% of volume averagely across BWS, and off premise accounts for 80%,” off premise will need to be up significantly to combat likely substantial on premise losses.
A totally theoretical on premise volume decreases of, say, -75% “would need to be countered by +19% increases in the off premise just to get back to 0% overall.” Just showing how the math works.
ABI DRAWS DOWN ENTIRE CREDIT LINE… $9 BILLION BIG ONES
Given the current state of affairs around the globe, it should come as no surprise that Anheuser-Busch InBev has decided to make a “dash for cash” and draw down “the entirety of a $9bn loan facility from global banks,” per the Financial Times.
The brewer, which as you know is currently trying to work off a $95 billion debt load, reportedly made “a request to tap the facility late last week.”
The FT says “the cash will help preserve AB InBev’s financial flexibility as the brewer deals with the fallout from the coronavirus.”
They “joined a growing list of companies… rushing to secure cash from credit facilities,” including the likes of “Boeing, Hilton Worldwide and IAG, the parent company of British Airways.”
EMPLOYEE AT A-B’s CARTERSVILLE PLANT TESTS POSITIVE FOR COVID-19
Reports came in yesterday morning that an employee at Anheuser-Busch’s Cartersville brewery in Georgia has tested positive for the Coronavirus. A-B confirmed the news in a statement, and said that person has been isolated and is now receiving medical attention.
“One employee at our Cartersville location tested positive for COVID-19 and in accordance with guidance with local health authorities we took immediate steps to isolate this individual and ensure this individual receives medical attention and support needed,” the statement read.
Production at the plant will move forward, however, as the “ability to serve our consumers, retailers and communities has not been impacted, nor has the safety and quality of our products,” per statement.
Meanwhile, A-B sent a note to distributors from Bob Tallett regarding the COVID19 epidemic, obtained by BBD of course, but it was basically boilerplate wash-your-hands type stuff. They will be communicating every Tuesday and Friday on updates. Nothing regarding the sick person in their Georgia brewery.
PABST ADOPTS A WORK-FROM-HOME POLICY FOR ENTIRE SALES TEAM
Like a lot of brewers right now, Pabst took the time this week to update their business partners on some of the precautionary measures they’re taking in the wake of COVID-19.
The company decided to call off their scheduled company meeting in San Antonio this week, and has “suspended all non-essential travel for employees.”
ENTIRE SALES TEAM WORKING FROM HOME. They’ve ordered “all office-based Pabst employees” to work remotely, and have actually taken things a step further with the decision to adopt a work-from-home policy for their entire sales team for the next two weeks.
“We will also make sure that we are compliant with you and your company’s individual COVID-19 plans and policies as they relate to in-market work-withs and meetings of any kind,” Pabst said. “Despite the challenge this creates, our team will do everything possible to continue to check in with partners, retailers, and others by phone.” The company added that they will “continue to reassess on a daily basis and will keep you informed should there be any updates or adjustments to these policies.”
DRIZLY’S MONDAY UP 500%, WITH CONSUMERS SPENDING 50% MORE THAN USUAL
Yesterday we shared that bev alc e-commerce platform, Drizly, was up 3.5X YTD trends in the “latest” four days.
That has accelerated as more states clamp down on on-premise outlets.
“The latest trends for the past week showed that Drizly sales are growing 4x the growth rate from earlier in the year,” the company shared with BBD.
“The latest 3 days show Drizly is growing 6.5x the growth rate from earlier in the year.
“Just yesterday, on a Monday in March, gross merchandise volume was up 500% year over year. Drizly is also seeing that consumers are placing larger orders, now spending on average 50% more than normal on Drizly, which indicates a ‘stock up’ mentality.”
A QUICK RUNDOWN OF OTHER DEVELOPMENTS
-San Francisco officials ordered cannabis dispensaries in the city to shut things down for at least three weeks, per SF Chronicle.
-And as you could imagine, way less people are traveling. Kris Van Cleave, a transportation correspondent for CBS, reports that numbers from the TSA “show a ~34% drop off in passenger screenings nationwide SINCE LAST WEEK.” Yesterday, the TSA screened 1,258,707 passengers. On March 16 of 2019, they had screened 2,393,385, that’s a “47% drop,” Kris said. “And nearly 1.1M or 46.5% less than Mar 1st of 2020 when 2,353,168 were screened.”
-Four players from the NBA’s Brooklyn Nets have tested positive for COVID-19, including NBA superstar Kevin Durant.
Harry, Jenn and Jordan
“Never apologize for showing feeling. When you do so, you apologize for truth.” – Benjamin Disraeli
———- Sell Day Calendar ———-
Today’s Sell Day: 13
Sell days this month: 22
Sell days this month last year: 21
This month ends on a: Tues.
This month last year ended on a: Fri.
YTD sell days Over/Under: +1