Less Booze, More Kombucha?

Less Booze, More Kombucha?

We’ve all read the statistics on just how chubby Americans have become and all the lovely little health problems that come along with those extra pounds, from diabetes to heart disease not to mention the physical discomfort of lugging extra pounds around. Making healthier eating and drinking choices is part of our Clean Living investment theme and this week the Wall Street Journal ran an article discussing how as Americans increasingly lay off the booze, the world’s biggest brewers and liquor companies are having to push beyond their traditional fare and roll out teas, energy drinks, and nonalcoholic spirits.

As a confirmed wine lover who owns more wine fridges than I’m willing to publicly admit and who is also known to enjoy a great glass of scotch (travel tip British Airways offers Johnnie Walker Blue in first class)  or a gin and tonic, (new favorite gin is Darjeeling) I’m struggling to wrap my head around kombucha or spiked coconut water (who knew there was such a thing) to replace the heaven of pouring a glass of Barolo, but I applaud the effort by a nation that clearly has room for improvement on the health front.

According to the Wall Street Journal,

Americans’ consumption of ethanol, or pure alcohol, has declined sharply over the past couple of decades. Alcohol consumption stood at 8.65 liters per person in 2017—the most recent year for which data is available—compared with 10.34 liters in 1980, according to research firm Bernstein….

 

New data show that U.S. alcohol volumes dropped 0.8% last year, slightly steeper than the 0.7% decline in 2017. Beer was worst hit, with volumes down 1.5% in 2018, compared with a 1.1% decline in 2017, while growth in wine and spirits slowed, according to data compiled for The Wall Street Journal by industry tracker IWSR.

Way to go America!

From an investors standpoint…

IWSR forecasts low- and no-alcohol products in the U.S.—still a small slice of the market—to grow 32.1% between 2018 and 2022, triple the category’s growth over the past five years.

And this trend has legs…

Diageo Chief Executive Ivan Menezes said last year that adults opting for lower alcohol options was “an important trend over the next many years” and that the company was “putting a lot of focus behind it.”

The bottom line is as consumers look to make healthier choices, companies are forced to respond by altering their offerings. Those that recognize the change and take advantage of it are part of our Clean Living investing theme, those that don’t… well … remember Blockbuster?

For the entire article go to: As Americans Drink Less Alcohol, Booze Makers Look Beyond the Barrel – WSJ

Campbell CEO Morrison retires, kicking off a strategic business review

Campbell CEO Morrison retires, kicking off a strategic business review

What we are seeing in the Campbell’s earnings report and decision to undertake a strategic review is yet another company that is grappling with the changes to their business model as consumer preference shifts toward healthier eating and snacking.

Some businesses are able to use acquisitions to pivot their businesses more quickly and respond to changing thematic tailwinds. Others, like we are seeing with Campbell Soup, are not.

 

Denise Morrison, CEO and president of Campbell Soup Co., announced she is retiring effective immediately, the company announced Friday morning.

“I am proud of Campbell’s accomplishments and how we have transformed our portfolio amid changing consumer tastes for food and health and well-being,” Campbell said in a statement. “It has been an honor to lead this iconic company and exceptional team, and I am confident that Campbell will enjoy continued success for many years to come.”

Les C. Vinney, chairman of the board, thanked Morrison for her service to the company.“Denise has been a passionate advocate and leader over her 15 years with the company,” he said in a statement. “She has made many important contributions over the past seven years as chief executive officer to reposition Campbell in the rapidly changing food industry.“

Campbell also announced its quarterly results Friday. Sales did increase 15 percent for the quarter, to $2.125 billion, but were driven by the acquisitions rather than organic sales. Gross margin was down.

“While our organic sales in the quarter were stable in this difficult environment, our gross margin performance was below our expectations,” Chief Financial Officer Anthony DiSilvestro said in a statement. “Based on our third-quarter results and outlook for the balance of the year, we are lowering our fiscal 2018 earnings guidance.

“Looking ahead, we will be reviewing all aspects of our strategic plans and portfolio composition. We anticipate that our review, which will take several months to complete, will lead to changes designed to improve our operating performance and create long-term shareholder value.”

Source: Campbell CEO Morrison retires, effective immediately – ROI-NJ