Bank of America analysts spot a sobering milestone for America's beer industry: shipments are on track to fall below 1980 levels this year as stretched household budgets collide with changing drinking habits. The explosion of GLP-1 drug demand, cannabis products, and growing health concerns about booze are adding pressure on demand.
BofA consumer staples analysts led by Peter Galbo outlined three key industry takeaways in a Tuesday note following their attendance at the annual Beer Insights Seminar, hosted by Beer Marketer's Insights (BMI) in New York City:
- STZ/Hispanic consumer remains top of mind following a mixed weekend for immigration policy. STZ traded higher today, suggesting investors interpreted the developments favorably, while Nicholas Fink reiterated that the Hispanic consumer remains a long-term tailwind for the portfolio.
- Growth continues to shift beyond traditional beer and into RTDs, which continue to see strong growth, while the emerging "ade" segment could represent the next meaningful growth pocket.
- Optimism around NA beer remains high, with Athletic Brewing seeing a path for the category to ultimately reach ~20% of total beer.
Shifting focus to the broader industry, Galbo said US beer shipments fell 3.9% through September. He cited data from BMI that showed if this trajectory holds, this would send annual shipments to 176 million barrels, below the 178 million shipped in 1980.
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