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Tag: beverages

  • Here’s how many Diet Cokes you’d have to drink daily to get too much aspartame

    Here’s how many Diet Cokes you’d have to drink daily to get too much aspartame

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    A leading global health body has declared that the artificial sweetener aspartame, commonly used as an ingredient in diet soda, chewing gum and vitamins, may cause cancer.

    But the World Health Organization’s report late Thursday also noted that people would have to be exposed to extreme amounts of aspartame — whether through diet, occupational exposure or other means — to be at risk.

    So how much aspartame is too much?

    It’s safe to consume up to 40 milligrams of aspartame per kilogram, or 2.2 pounds, of body weight per day, a WHO and Food and Agriculture Organizations joint committee of experts on food additives said. So, a person who weighs 154 pounds would need to drink nine to 14 cans of, say, Diet Pepsi or Diet Coke per day to exceed that level, assuming there are 200 to 300 milligrams of aspartame in each can.

    “We’re not advising consumers to stop consuming [aspartame] altogether,” said WHO’s nutrition director, Dr. Francesco Branca. “We’re just advising a bit of moderation.”

    The Food and Drug Administration has an even higher daily aspartame-exposure limit: 50 milligrams per kilo of body weight.

    Even heavy aspartame users — Donald Trump, the former U.S. president, for example, drank a reported 12 cans of Diet Coke a day in his White House years — would struggle to consume that much of the sweetener in an average day.

    But consumers should also note that a food being labeled “safe” is not equivalent to its being healthy. There has been plenty of research to suggest that sipping too many sweetened beverages, including diet drinks with artificial sweeteners, may be linked to health problems and elevated risk of death.

    Aspartame is used in products that millions of people use every day, including Diet Coke and Diet Pepsi, Pepsi Zero Sugar and Coca-Cola Zero Sugar, the Mars Wrigley chewing gum Extra and some Snapple drinks, as well as some protein drinks, among thousands of others, by the Calorie Control Council’s count.

    Aspartame was developed beginning in the mid-1960s by Skokie, Ill.–based G.D. Searle & Co., now a Pfizer
    PFE,
    +0.72%

    subsidiary, which branded the sweetener NutraSweet. It secured ultimate FDA approval, after initial hiccups, for use in dry goods and then in carbonated soft drinks in 1981 and 1983, according to the Calorie Control Council.

    The organization that this week labeled aspartame possibly carcinogenic was the World Health Organization’s cancer-research arm, the International Agency for Research on Cancer. The IARC said its aspartame declaration is based on “limited evidence” of cancer in humans, specifically a type of liver cancer called hepatocellular carcinoma.

    What should consumers do with this aspartame news? “At least when it comes to beverages, our message is your best choice is to drink water or an unsweetened beverage,” said Dr. Peter Lurie, executive director of the Center for Science in the Public Interest, which previously nominated aspartame for IARC review.

    More aspartame news on MarketWatch:

    What is aspartame, and is it bad for you? Here’s what health experts say

    Aspartame is possibly carcinogenic, according to WHO’s cancer-research agency

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  • Here’s how many Diet Cokes you’d have to drink daily to get too much aspartame

    Here’s how many Diet Cokes you’d have to drink daily to get too much aspartame

    [ad_1]

    A leading global health body has declared that the artificial sweetener aspartame, commonly used as an ingredient in diet soda, chewing gum and vitamins, may cause cancer.

    But the World Health Organization’s report late Thursday also noted that people would have to be exposed to extreme amounts of aspartame — whether through diet, occupational exposure or other means — to be at risk.

    So how much aspartame is too much?

    It’s safe to consume up to 40 milligrams of aspartame per kilogram, or 2.2 pounds, of body weight per day, a WHO and Food and Agriculture Organizations joint committee of experts on food additives said. So, a person who weighs 154 pounds would need to drink nine to 14 cans of, say, Diet Pepsi or Diet Coke per day to exceed that level, assuming there are 200 to 300 milligrams of aspartame in each can.

    “We’re not advising consumers to stop consuming [aspartame] altogether,” said WHO’s nutrition director, Dr. Francesco Branca. “We’re just advising a bit of moderation.”

    The Food and Drug Administration has an even higher daily aspartame-exposure limit: 50 milligrams per kilo of body weight.

    Even heavy aspartame users — Donald Trump, the former U.S. president, for example, drank a reported 12 cans of Diet Coke a day in his White House years — would struggle to consume that much of the sweetener in an average day.

    But consumers should also note that a food being labeled “safe” is not equivalent to its being healthy. There has been plenty of research to suggest that sipping too many sweetened beverages, including diet drinks with artificial sweeteners, may be linked to health problems and elevated risk of death.

    Aspartame is used in products that millions of people use every day, including Diet Coke and Diet Pepsi, Pepsi Zero Sugar and Coca-Cola Zero Sugar, the Mars Wrigley chewing gum Extra and some Snapple drinks, as well as some protein drinks, among thousands of others, by the Calorie Control Council’s count.

    Aspartame was developed beginning in the mid-1960s by Skokie, Ill.–based G.D. Searle & Co., now a Pfizer
    PFE,
    +0.72%

    subsidiary, which branded the sweetener NutraSweet. It secured ultimate FDA approval, after initial hiccups, for use in dry goods and then in carbonated soft drinks in 1981 and 1983, according to the Calorie Control Council.

    The organization that this week labeled aspartame possibly carcinogenic was the World Health Organization’s cancer-research arm, the International Agency for Research on Cancer. The IARC said its aspartame declaration is based on “limited evidence” of cancer in humans, specifically a type of liver cancer called hepatocellular carcinoma.

    What should consumers do with this aspartame news? “At least when it comes to beverages, our message is your best choice is to drink water or an unsweetened beverage,” said Dr. Peter Lurie, executive director of the Center for Science in the Public Interest, which previously nominated aspartame for IARC review.

    More aspartame news on MarketWatch:

    What is aspartame, and is it bad for you? Here’s what health experts say

    Aspartame is possibly carcinogenic, according to WHO’s cancer-research agency

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  • Consumers are shopping in more stores than ever before to save money

    Consumers are shopping in more stores than ever before to save money

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    Consumers are still showing signs of being highly sensitive to inflationary pressures and are shopping around to maximize their budgets, according to PepsiCo Inc. Chief Executive Ramon Laguarta.

     ‘We’re seeing consumers shopping in more stores than before. They’re looking for better deals. They’re starting to look for optimization. They are going to channels that have better perceived value.’


    — Ramon Laguarta, CEO, PepsiCo Inc.

    Laguarta told analysts on the company’s second-quarter earnings call on Tuesday that consumers are buying more in dollar stores or buying more in bulk or at wholesale clubs.

    “So every segment of the consumer is making adjustments,” he said, according to a FactSet transcript.

    Still, PepsiCo
    PEP,
    +1.89%

    saw better elasticities in the three-month period, he said, referring to consumers’ sensitivity and response to higher prices.

    Like many consumer companies, the snacks and beverages giant has been raising prices to combat its own higher costs in the current inflationary period. But, “we’ve been able to raise prices and consumers stay within our brands,’ he said.

    See: U.S. inflation slows again, CPI shows, as Fed weighs another rate hike

    One supportive factor is low unemployment, said Laguarta. Unemployment is currently low in developed and developing markets and is trending at a record low in Mexico and certain Asian markets, he said.

     “So we’re seeing overall very good consumer behavior, especially when it refers to our categories, and that’s why we raised guidance on our top line and because of the first factor we raised guidance on the bottom line as well,” he said.

    See also: ‘Greedflation’ is replacing inflation as companies raise prices for bigger profits, report finds

    PepsiCo earlier posted better-than-expected earnings for the latest quarter and raised its fiscal 2023 guidance.

    Some of PepsiCo’s more popular brands, including Lay’s, Doritos, Cheetos, and Ruffles, generated double-digit net revenue growth, along with smaller, emerging brands aimed at consumers seeking healthier choices, such as PopCorners, SunChips, Bare, and Off The Eaten Path, said the company.

    The stock was up about 1% Thursday and has gained 2.4% in the year to date, while the S&P 500
    SPX,
    +0.65%

    has gained 16%.

    For more, see: PepsiCo’s stock gains after beating estimates in latest quarter and raising guidance again

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  • As food prices rise in June, analysts warn of a ‘tipping point’ for Americans

    As food prices rise in June, analysts warn of a ‘tipping point’ for Americans

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    Food prices grew at a slower pace in June, but economists remain concerned that prices will reach a level where consumers will make dramatic changes in their behavior.

    Food prices rose 3% in June compared to a year ago, according to the latest data from the Bureau of Labor Statistics. After a year of price hikes, consumers continued to see food prices rise, but at a slower rate.

    Grocery prices were 5.7% higher in June compared to a year ago, and dining out was 7.7% more expensive. That’s significantly lower than the 13.5% peak inflation for grocery prices last August and the 8.8% peak inflation for dining out.

    “Overall, there continues to be a similar narrative of extended upward pressure on food prices as we try to discern whether this stress has led to a tipping point where consumers are struggling to buy the foods that they want,” said Jayson Lusk, the head and distinguished professor of Agricultural Economics at Purdue University.

    Reported food insecurity across households of different income levels reached 17% in June, the highest level since March 2022, according to the monthly Consumer Food Insights Report from Purdue University. Although it didn’t deviate too much from the normal range — food insecurity hovered at 14% two months ago — Lusk said the increase is concerning given the amount of pressure on more financially vulnerable consumers. 

    Reported food insecurity across households of different income levels reached 17% in June, the highest level since March 2022, according to Purdue University.

    The pandemic-era expansion of the Supplemental Nutrition Assistance Program ended in March, meaning SNAP recipients are now receiving $90 less on average every month, according to the Center on Budget and Policy Priorities, a progressive policy think tank based in Washington, D.C. 

    The recent rise in food insecurity could be a lag from households adjusting to the policy change, Lusk said. On average, consumers are spending about $120 per week on groceries and $70 per week on dining out or takeout, the report found. 

    Middle-income households earning $50,000 to $100,000 a year and low-income households earning less than $50,000 a year cut weekly spending on groceries and dining out by about $10 a week, Purdue found. The average weekly grocery expenditure for low-income households was $103 in June; for middle-income households, it was $118. Households earning more than $100,000 a year spent $141 a week on groceries in June.

    Around 47% of low-income households — those earning less than $50,000 a year — said they relied on SNAP benefits in May, up from roughly 40% in February, according to a recent Morning Consult report.

    For low-income households, rising food insecurity is often coupled with juggling bills such as utilities and rent, which has also led to rising eviction rates in recent months, according to Propel, an app that aims to help low-income Americans improve their financial health. Propel surveys SNAP users on insecurity around food, finance and their housing situation. 

    Nearly half of the survey respondents said they cannot afford the food they want. “We were unable to pay bills because we had to buy food. We’re about to lose our home,” a South Carolina user named Anna told the Propel survey. 

    The share of surveyed households that paid their utilities late rose 11% from May to June, and only 27% of respondents paid their utility bills on time and in full, according to Propel’s June survey.

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  • A breakfast-cereal giant’s grumbles about prices could be music to the Fed’s ears

    A breakfast-cereal giant’s grumbles about prices could be music to the Fed’s ears

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    General Mills the megamanufacturer behind your morning Cheerios, reported a drop in earnings that might make it question whether continuing to raise prices is worth it. 

    General Mills
    GIS,
    +0.52%

    CEO Jeff Harmening acknowledged during the company’s fourth-fiscal-quarter earnings call this week that consumers responded to higher prices by making fewer purchases. “As you look at the last 12 weeks, it’s pretty clear that elasticity — volume elasticities have increased,” which may suggest consumer demand is more sensitive to price increases than it had been previously.

    In business and economics, price elasticity refers to the degree to which individuals, consumers or producers change their demand or the amount supplied in response to price or income changes.

    ‘Companies have been raising prices pretty aggressively. We’re seeing that trend definitely subside.’


    — Richard Moody, Regions Financial Corp.

    The manufacturer of the Häagen-Dazs, Pillsbury and Betty Crocker product lineups, as well as its famed breakfast cereals, felt the impact of this phenomenon as it reported a decline in profits and sales volume for its fourth quarter. 

    Read: General Mills’ stock slides 5% as sales fall short. North American retailers are reducing inventory.

    Richard Moody, chief economist at Regions Financial Corp., said higher prices are posing an issue for companies more broadly. “Companies have been raising prices pretty aggressively. We’re seeing that trend definitely subside. Sellers of goods just don’t have as much pricing power as they had for most of last year and the prior year,” Moody told MarketWatch.

    This could be music to the ears of Federal Reserve officials, who are trying to get inflation back down to their 2% target.

    St. Louis Fed President James Bullard, during the early days of the fight against inflation in 2022, said inflation would return to the Fed’s target once companies find out that raising prices is harmful to their bottom lines.

    In an interview last May with Fox Business Network he observed that “a lot of CEOs have come on TV and said, ‘Oh, I have lots of pricing power, and I can do whatever I want and make a lot of money … but I think some of them are going to get punched in the face here with the fact that consumers have to react.”

    Context: Fed-preferred PCE gauge shows lowest U.S. inflation rate since April 2021, but stickiness at core hints at persistent price pressure

    Also see: U.S. consumer sentiment climbs to 4-month high on slower inflation and end of debt-ceiling fight

    Though General Mills’ drop in earnings might not be the punch in the face Bullard warned of, its recent quarterly update could be a sign that continuing to raise prices is now looking harmful to financial results.

    A statement from the company attributed the drop in earnings to a trend among retailers toward lower inventory levels. During the pandemic, grocery stores stocked up on Nature Valley snack bars and CoCo Puffs due to concerns about supply-chain complications. General Mills says retailers are holding less inventory now, so there is less on the shelves for consumers to purchase.

    CEO Harmening said the majority of General Mills’ price increases are in the marketplace already. Though conditions can change, “we feel good about what we see right now with our pricing and the inflationary environment that we see,” he said, a possible indication that the company might back off of flexing price muscle. 

    Other economists were uncertain about reading too much into lower earnings for companies like General Mills.

    Will Compernolle, macro strategist at FHN Financial, said he detected a bit of a culture change due to grocery-store inflation over the past two years. “People are buying less stuff to eat at home. And that is, you know, a kind of mysterious trend in the sense that this is always considered a necessity,” he said.

    As pandemic-era stay-at-home recommendations and other public health measures were eased, there’s been “a temporary surge in food-services spending” as people have chosen to go out to restaurants rather than cook at home, he said. 

    He said it is unclear how companies like General Mills will respond to consumer spending. In order to determine demand, they will have to see what “the new normal looks like when the dust settles” and ask whether “people going to go back to their old composition of food at home versus food away.” 

    Read: Shopping at Kroger can be up to four times cheaper than eating out, CEO says

    Robert Frick, corporate economist with Navy Federal Credit Union, said he has observed “consumers are saving more and spending less, perhaps out of caution, as most believe a recession is either here or imminent.”

    Lower-income Americans have become particularly sensitive to price increases, Frick said. He shared his “hunch” that there is “kind of a drag on spending because lower-income Americans are being hurt so badly.”

    “It seems likely most of the effects of spending plateauing overall has to do with that lower third of Americans [having] really started to, you know, pinch their pennies and run up their debt, and they don’t want to run it up any more,” Frick said.

    Income and spending data released by the government on Friday showed people may have more money to spend but are not spending quite as much.

    U.S. consumer spending slowed in May, rising just 0.1%, compared with 0.6% growth in consumer spending in the prior month. Consumers saved 4.3% of their disposable income, an increase from April’s 3.4% savings rate. 

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  • Constellation Beer Sales Get a Lift From Bud Light’s Trouble. Why the Stock Is Falling.

    Constellation Beer Sales Get a Lift From Bud Light’s Trouble. Why the Stock Is Falling.

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    Constellation Brands‘ earnings beat Wall Street’s expectations as the company reported strong beer sales for the latest quarter on Friday. The stock fell anyway.


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  • Does Nike have too many sneakers? Its financial results could tell us whether shoes will get cheaper.

    Does Nike have too many sneakers? Its financial results could tell us whether shoes will get cheaper.

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    Are stores getting more desperate to sell sneakers? Fourth-quarter results from Nike Inc. on Thursday will probably provide part of the answer.

    Even as its some of its basketball shoes still put up double-digit sales gains — like those named after NBA icons LeBron James, Luka Doncic and Giannis Antetokounmpo — the athletic-gear maker, like its rivals, has faced weaker consumer demand overall. With customers forced to spend more money on necessities over the past year, they’ve had less to spend on new shoes.

    In March, Nike
    NKE,
    +0.19%

    executives said that the demand backdrop remained “promotional” — one in which anyone selling sneakers and clothing was cutting prices more aggressively to attract customers. But ahead of Thursday’s results, some analysts also wondered whether the stalling demand has forced bigger changes to the way management thinks about its broader turn away from retailers — a core piece of its sales strategy.

    Nike over recent years has embarked on a plan to rely less on shoe retailers for sales and more on sales made directly to customers through its own stores and online. But recently, it decided to start selling clothing again at Macy’s
    M,
    +3.58%

    and shoes again at DSW, the shoe-store chain run by Designer Brands Inc.
    DBI,
    +4.32%

    — this after ending partnerships with both retailers over the past two years.

    The return to traditional retail has raised questions about whether Nike is looking to more aggressively clear product it’s had trouble selling, and whether management is re-evaluating the company’s go-it-alone sales strategy overall.

    “The big question on our minds heading into [Nike’s] quarter is what is going on with the [direct-to-consumer] pivot?” Quo Vadis analyst John Zolidis said in a note on Monday. “Reopening Macy’s and DSW seems odd in context of previous dismissive statements about undifferentiated retail.”

    He continued: “Further, neither of these retailers has a customer that correlates strongly with [Nike’s] highest-value segments. The easiest explanation is that [Nike] overestimated the dollars it could recapture from closed wholesale accounts and now has too much inventory it needs to clear.”

    What to expect

    Earnings: Analysts polled by FactSet expect Nike to earn 68 cents a share, down from 90 cents in the same quarter a year ago. Contributors to Estimize — a crowdsourcing platform that gathers estimates from Wall Street analysts as well as buy-side analysts, fund managers, company executives, academics and others — expect earnings per share of 75 cents.

    Revenue: Analysts polled by FactSet expect $12.58 billion in sales for Nike. Forecasts from Estimize call for sales of $12.72 billion.

    Stock price: Nike’s stock is only up 1.3% over the past 12 months. Shares got hit in September, after company executives warned of further price-cutting from rivals due to weaker demand. The stock rebounded later but gave up some gains in May. The stock was up 2% on Monday.

    What analysts are saying

    Nike in March said demand for product sold at full pricing remained solid. Still, sneaker chain Foot Locker Inc.
    FL,
    +2.09%

    recently cut its outlook. Lots of Vans shoes are running at a discount, one analyst said last month, as the skater-centric brand competes with casual fare from the likes of Adidas
    ADS,
    +0.61%

    and others.

    Other analysts were also wondering about Nike’s return to Macy’s and DSW. But not everyone believed the move was a sign of deeper problems.

    “Investors are worried that this is a reversal in Nike’s shift from wholesale to [direct-to-consumer], but we don’t think the strategy is broken,” BofA analyst Lorraine Hutchinson said in a research note on Wednesday. “We expect to hear an explanation of these moves on the [conference] call rather than an about-face on its focus on reducing undifferentiated wholesale.”

    Still, the company faced concerns about sales abroad. Zolidis also said markets were increasingly worried about growth in China, whose recovery from pandemic lockdowns has stumbled.

    “Our recent conversations with companies in China suggest that trends are mixed,” Zolidis said. “The consumer is more value oriented, and job uncertainty is higher.”

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  • WHO poised to declare aspartame ‘possibly carcinogenic to humans,’ Reuters reports

    WHO poised to declare aspartame ‘possibly carcinogenic to humans,’ Reuters reports

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    The World Health Organization’s cancer research arm is poised to declare the artificial sweetener aspartame as “possibly carcinogenic to humans” as early as next month, Reuters reported, citing two sources with knowledge of the matter.

    Aspartame is used in products ranging from diet Coca-Cola
    KO,
    -0.93%

    to Mars’ Extra chewing gum and certain Snapple drinks. The move will be the first by the International Agency for Research on Cancer, or IARC, the news agency reported.

    The IARC ruling was finalized earlier this month after a meeting of its external experts. The meeting considered whether something is a potential hazard or not, based on all the published evidence. It did not consider, however, how much of a product can be safely consumed; that advice is made by a separate WHO expert committee on food additives, called JECFA — the Joint WHO and Food and Agriculture Organization’s Expert Committee on Food Additives) — as well as by national regulators.

    Industry groups immediately pushed back on Thursday.

    “Consumers deserve facts, and the fact is aspartame is one of the most widely studied food ingredients and has repeatedly been determined to be safe by global scientific and regulatory authorities, which is why the Calorie Control Council is gravely concerned about any unsubstantiated assertions that contradict this conclusion,” said Robert Rankin, president of the Calorie Control Council in emailed comments.

    The IARC is not a regulatory agency, an ingredient expert or a food safety authority, Ranking added.

    “Their sole focus is to find substances that could cause cancer, and they have classified things like aloe vera, low-frequency magnetic fields, and pickled vegetables as possibly causing cancer. Consumers want context and that is what’s missing from these misleading claims,” he said.

    Kate Loatman, executive director of the International Council of Beverages Associations (ICBA), agreed.

    While it appears IARC is now prepared to concede that aspartame presents no more of a hazard to consumers than using aloe vera, public health authorities should be deeply concerned that this leaked opinion contradicts decades of high-quality scientific evidence and could needlessly mislead consumers into consuming more sugar rather than choosing safe no- and low-sugar options – all on the basis of low-quality studies,” Loatman said in a statement.

    In May, the WHO advised people not to use nonsugar sweeteners for weight control, warning that they may increase the risk of Type 2 diabetes, cardiovascular diseases and mortality in adults.

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  • General Mills Reports Weak Sales. Its Outlook Isn’t Great Either.

    General Mills Reports Weak Sales. Its Outlook Isn’t Great Either.

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    General Mills Reports Weak Sales. Its Outlook Isn’t Great Either.

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  • These Drilling Stocks Could Be Gushers as the Oil Industry Rebounds

    These Drilling Stocks Could Be Gushers as the Oil Industry Rebounds

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    Offshore oil drillers were about the worst place to be in 2020 as oil prices were falling and demand for crude seemed to be seeping away. Now, the stocks may be the ones to own as investors realize that oil will be needed to make the world go around for decades.

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  • This Bud’s for investors. Buy the stock even if Bud Light sales never recover, says analyst.

    This Bud’s for investors. Buy the stock even if Bud Light sales never recover, says analyst.

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    The summer haze settling over stocks doesn’t look ready to budge Thursday, with the S&P 500 index
    SPX,
    -0.52%

    in the throes of its longest losing streak since May.

    On the bright side, the index is looking at a 6% gain for the June quarter, whose end is just a few days away.

    In other corners of the market, the quarter has been less forgiving. Consumer staples, those things you can’t live without, have lost over 1%, perhaps reflecting the tougher economic times we are living in. Within that sector, though, is beer and one name that has indeed had a quartarius horriblis.

    Anheuser-Busch InBev’s
    ABI,
    +1.82%

    BUD,
    -0.05%

    U.S.-listed shares are down about 15%, as Bud Light sales have tumbled following consumer backlash to a social-media campaign featuring trans activist Dylan Mulvaney in April.

    But our call of the day from Deutsche Bank says it’s time to buy this unloved stock, even if those Bud Light sales never recover. A team of analysts led by Mitch Collett have upgraded Anheuser-Busch shares to buy from hold and lifted their price target to €60 euros from €59 euros (they didn’t offer an ADR price target).

    Recent underperformance of the stock “implies a permanent reduction in ABI’s U.S. business. Our proprietary survey data suggests these headwinds are likely to fade even if we do not expect the U.S. business ever to fully recover from its current challenges,” said Collett.

    The analysts pointed to recent Nielson data that showed ABI’s U.S. business currently down 12%, with Bud Light sales off 24% and the rest of its portfolio down 7%. But an analysis of distribution data shows ABI itself isn’t “losing shelf presence” as sales velocity is the primary driver of the decline, which bodes well if consumer sentiment improves, said Deutsche Bank.

    Those declines are about a 12% headwind to ABI’s annual net income, which is in line with European underperformance seen by the stock, added Collett and the team.

    Read: Bud Light dethroned as top-selling beer by Modelo, as boycott cuts into sales

    Deutsche Bank conducted its own survey that showed 24% of Bud Light consumers are no longer buying that brand, with 18% buying less, but 21% buying more and 37% buying the same amount. Those findings are largely consistent with Nielson;s, said the analysts.

    Deutsche Bank’s own survey also showed that 42% of Bud Light drinkers expect to be buying Bud Light again in three to six months, versus 29% who see that as unlikely. And 50% expect that battered beer’s reputation will recover in time, versus 30% who says it won’t. “We believe this bodes well for the brand, recapturing some of its lost share,” said Collett and the team.

    Analysts at RBC Capital also recently pushed back on the selloff for the stock, saying the hit to the shares and forecasts for the stock are “excessive,” as they don’t see Bud Light’s troubles hurting AB InBev outside the U.S.. They said AB InBev is a “nerve-racking buying opportunity.”

    Ahead of Thursday’s open, U.S.-listed Bud shares were up about 1.3%, tracking gains from its Belgian shares.

    The markets

    U.S. stock index futures
    ES00,
    -0.25%

    YM00,
    -0.27%

    NQ00,
    -0.31%

    are drifting lower, with bond yields
    TMUBMUSD02Y,
    4.730%

    TMUBMUSD10Y,
    3.743%

    on the rise and oil prices
    CL.1,
    -1.82%

    also weaker. The Norwegian krone
    USDNOK,
    -0.80%

    is up 1.5% against the dollar after the country’s central bank hiked interest rates 50 basis points. Switzerland also hiked rates, but the Swiss franc is steady
    USDCHF,
    +0.12%
    .
    The British pound
    GBPUSD,

    is higher after the Bank of England also hiked interest rates by 50 basis points. The Turkish lira was falling slightly after the central bank, under new management, hiked interest rate to 15% from 8.5%, against forecasts for a hike to 20%.

    China markets were closed for a holiday, with losses elsewhere, such as Japan
    NIK,
    -0.92%

    and Australia
    XJO,
    -1.63%
    .

    For more market updates plus actionable trade ideas for stocks, options and crypto, subscribe to MarketDiem by Investor’s Business Daily.

    The buzz

    Federal Reserve Chair Jerome Powell’s second day of testimony on Capitol Hill kicks off at 10 a.m. Eastern. On Wednesday, he said higher interest rates should be expected , but didn’t offer any clues on timing. U.S. weekly jobless benefit claims and current account data are due at 8:30 a.,m. ET, with leading indicators also at 10 a.m., alongside a speech from Cleveland Fed President Loretta Mester. Richmond Fed President Tom Barkin will speak at 4:30 p.m.

    The Bank of England will announce an interest-rate decision at 7 a.m. ET and after worse-than-expected inflation data on Wednesday, a 50 basis-point hike hasn’t been ruled out.

    Darden Restaurants
    DRI,
    +0.36%

    will report ahead of the open, with Smith & Wesson
    SWBI,
    +0.52%

    due after the close.

    Tesla stock
    TSLA,
    -5.46%

    is down 2% in premarket trading on the heels of the EV maker’s worst loss in two months.

    Joining recent actions by other big stakeholders cashing in on big gains for Nvidia
    NVDA,
    -1.74%
    ,
    a board member just sold $51 million in stock.

    Best of the web

    Amazon allegedly duped people into subscribing to Prime and made it nearly impossible to cancel. Here’s how the feds say they did it.

    The Biden administration is reportedly exploring whether it can mount a campaign against Chinese tech giants like Alibaba and Huawei.

    A giant drilling machine is moving Stockholm toward an emissions-free future

    Wife of missing Titanic exploring sub pilot Stockton Rush is reportedly a descendant of two first-class passengers who died on the ship.

    The tickers

    These were the top searched tickers on MarketWatch as of 6 a.m. :

    Ticker

    Security name

    TSLA,
    -5.46%
    Tesla

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    Need to Know starts early and is updated until the opening bell, but sign up here to get it delivered once to your email box. The emailed version will be sent out at about 7:30 a.m. Eastern.

    Listen to the Best New Ideas in Money podcast with MarketWatch reporter Charles Passy and economist Stephanie Kelton.

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  • Bud Light is No Longer Top-Selling Beer in U.S.

    Bud Light is No Longer Top-Selling Beer in U.S.

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    Bud Light has lost its status as the top-selling beer in the U.S.


    Rick Diamond/Getty Images

    Modelo Especial has quietly overtaken


    Anheuser-Busch InBev


    Bud Light as the nation’s top-selling beer, punctuating the impact of a boycott that followed the brand’s controversial promotion by a transgender activist.

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  • ‘Greedflation’ is replacing inflation as companies raise prices for bigger profits, report finds

    ‘Greedflation’ is replacing inflation as companies raise prices for bigger profits, report finds

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    That’s the practice by many S&P 500 food and consumer companies of raising prices to protect what a new report calls their “cushioned corporate profits,” and it has enabled them to boost margins through the current inflationary period.

    Companies including Kimberly-Clark Corp.
    KMB,
    -0.45%
    ,
    PepsiCo Inc.
    PEP,
    -0.18%
    ,
    General Mills Inc.
    GIS,
    -0.88%

    and Tyson Foods Inc.
    TSN,
    -0.36%

    have on recent earnings calls touted their ability to raise prices, earning tidy profits and rewarding their shareholders as they go, according to the report from Accountable.US, a liberal-leaning consumer-advocacy group.

    And they have signaled their intention to continue to take “price actions” even as the Federal Reserve has hiked interest rates an unprecedented 10 times in an effort to tame inflation.

    “Higher interest rates haven’t stopped S&P companies, especially in the big food industry, from raising consumer prices despite reporting billions in extra net earnings and over a trillion dollars in new giveaways to wealthy investors,” said Liz Zelnick, director of economic security and corporate power at Accountable.US.

    “Corporate greed is a stubborn thing and requires serious action from Congress. The Fed has not seen an adequate return on its investment in a policy that has already created fissures in the economy that could lead to recession. It’s just not worth it,” she said. 

    Now read: Skip, pause or hike? A guide to what is expected from the Fed on Wednesday.

    Accountable.US is not alone in calling out price hikes on essentials including food. Walmart Inc.
    WMT,
    +0.73%

    is also unhappy with packaged-food companies that have steadily raised prices in dry grocery and consumable goods, according to a recent report from research company CFRA.

    “Given Walmart’s enormous bargaining power over its suppliers, we expect the retail giant to push back on further price increases from its packaged-food suppliers,” he said. That is expected to hurt margins, especially if volume growth does not recover.

    For more, see: Inflation in goods from cereal to soup has given a boost to consumer food stocks. Can Walmart help bring prices, both food and stock, down?

    May inflation data released Tuesday found that food prices were up 0.2% from April, after remaining flat for the previous two months. Food prices are up 6.7% over the last year. The food-at-home index is up 5.8% over the last year, while the index for cereals and bakery products is up 10.7%.

    Food prices started to rise about two years ago, when supply-chain issues and higher fuel and commodity prices led companies to pass some of those costs on to customers.

    But companies appear determined to raise prices even more, despite a decline in shipping and gas costs. Gasoline was down 5.6% in May from April and fuel oil fell 7.7%, according to consumer-price-index figures.

    Also read: U.S. inflation slows again, CPI shows, and might keep Fed on sidelines

    Kimberly-Clark executives told analysts on its recent earnings call that the company is able to “rapidly implement broad pricing actions” and acknowledged that “pricing has continued to be a big driver behind our top-line growth.”

    The company’s first-quarter earnings topped expectations and it raised guidance for the full year. That’s after it raised prices by 10% for a second straight quarter, driving margins wider by 340 basis points.

    Shareholders were rewarded to the tune of $425 million during the quarter, the Accountable.US report notes.

    See also: Colgate-Palmolive’s stock pops after earnings beat as company raises prices by double-digit percentage

    PepsiCo Chief Executive Ramon Laguarta told analysts on that company’s recent earnings call that most of its price increases are behind it.

    However, he said, “obviously, there are some markets, highly inflationary markets around the world, where we might have to take additional pricing. If you think about Argentina, Turkey, Egypt — those kinds of markets where the currencies are suffering. But the majority of our pricing is already done,” he said, according to a FactSet transcript.

    PepsiCo’s 2022 earnings rose 16.9% to nearly $9 billion, and it spent more than $7.6 billion on stock buybacks and dividends, with the former up 1,313% from 2021.

    General Mills, meanwhile, bragged about “getting smart about how we look at pricing” on its recent call. The parent of brands including Cheerios, Nature Valley, Blue Buffalo pet products and Pillsbury raised its fiscal 2023 guidance in February.

    And Tyson executives touted the “significant pricing power of our portfolio with a year-over-year increase of 7.6%.” Tyson’s latest quarter included a surprise loss, as it was hit by weak demand for meat, along with plant closures and job cuts.

    For more, see: Tyson Foods stock slides after meat producer swings to surprise loss

    But Tyson had net income of over $3.2 billion in 2022, up from $3 billion in 2021, and it rewarded shareholders with $1.35 billion in buybacks and dividends.

    For Accountable.US, it’s more compelling evidence that the Fed’s rate-hike strategy “has failed to root out one of the main drivers of inflation and should give the [Federal Open Market Committee] pause before lifting rates again this week to the detriment of jobs and the economy.”

    The Consumer Staples Select Sector SPDR exchange-traded fund
    XLP,
    +0.36%

    has fallen 1.6% to date in 2023, while the SPDR S&P Retail ETF
    XRT,
    +1.89%

    has gained 4.6%. The S&P 500
    SPX,
    +0.62%

    has gained 13% in the same period.

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  • ‘Horrific bus tragedy’ in Australian wine region leaves multiple dead, police say | CNN

    ‘Horrific bus tragedy’ in Australian wine region leaves multiple dead, police say | CNN

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    CNN
     — 

    At least 10 people are feared dead after a late-night bus crash in the Australian state of New South Wales on Sunday, local police say.

    Emergency crews responded just before midnight to reports about a bus rolling over at a roundabout near the town of Greta, which is located in the wine growing Hunter region, New South Wales Police Force said in a statement.

    Authorities said initial reports indicate 10 people died and 11 others were hospitalized. Eighteen other passengers were uninjured.

    Police said multiple helicopters, highway patrol, as well as fire and ambulance responded to the crash.

    “The driver of the bus – a 58-year-old man – was taken to hospital under police guard for mandatory testing and assessment,” they said. Authorities are investigating the cause of the wreck and remained at the scene early Monday local time.

    Australian Prime Minister Anthony Albanese tweeted his condolences to those affected by the crash.

    “All Australians waking up to tragic news from the Hunter send our deepest sympathies to the loved ones of those killed in this horrific bus tragedy. For a day of joy to end in such devastating loss is cruel indeed. Our thoughts are also with those who have been injured,” Albanese said in the post.

    He also tweeted his thanks to the first responders saying, “Thank you to all the first responders who rushed to the scene, and those continuing to assist and care for those affected by this tragedy.”

    The Hunter region – also referred to as the Hunter Valley – is about two and a half hours northwest of Sydney.

    It is one of Australia’s leading wine regions and popular for weekend getaways and weddings.

    Australia’s local station Channel 9 reported the bus was transporting wedding guests back home when the crash happened.

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  • Diageo PLC Names Debra Crew Chief Executive Officer

    Diageo PLC Names Debra Crew Chief Executive Officer

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    By Joe Hoppe

    Diageo said Friday that interim Chief Executive Officer Debra Crew has been appointed CEO, effective as of Thursday.

    The London-based maker of Johnnie Walker Scotch whisky, Guinness stout and Smirnoff vodka had named Crew interim CEO on Monday, ahead of her planned joining date as CEO in July 1.

    On Wednesday, Diageo said that longtime chief executive, Ivan Menezes, died after a short illness. He was 63.

    Crew first joined the liquor giant as a nonexecutive director in 2019 before stepping down from the board the following year to lead the company’s business in North America, its largest market. She was promoted to chief operating officer in October 2022.

    Write to Joe Hoppe at joseph.hoppe@wsj.com

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  • A ‘once-in-200 years’ heat wave caught Southeast Asia off guard. Climate change will make them more common | CNN

    A ‘once-in-200 years’ heat wave caught Southeast Asia off guard. Climate change will make them more common | CNN

    [ad_1]


    Hong Kong
    CNN
     — 

    Every day, countless mopeds criss-cross the congested city of Hanoi, in Vietnam, with commuters traveling to work or motorbike taxis dropping off everything from parcels to cooked food and clients.

    One of them is Phong, 42, who starts his shift at 5 a.m. to beat the rush hour, navigating the dense swarm of mopeds and drives for over 12 hours a day with little rest.

    But an unprecedented heat wave that engulfed his country in the past two months has made Phong’s job even more arduous. To get through the heat of the day, he equipped himself with a hat, wet handkerchiefs and several bottles of water – precautions that provided little relief as recorded daytime temperatures soared to more than 40 degrees Celsius (104 degrees Fahrenheit).

    The average May temperature in Hanoi is 32 degrees Celsius (90 degrees Fahrenheit).

    “If I get a heatstroke, I would be forced to suspend driving to recover,” he told CNN. “But I cannot afford it.” 

    Phong, who declined to give his surname, said he carries a tiny umbrella to protect his phone, the main tool he uses for work as a driver for the ride-hailing platform Grab, along with his bike. If the phone breaks, he misses out on much-needed income. “I was worried that the battery would overheat once exposed to the sun,” he said.

    Nearby in the same city, sanitation worker Dinh Van Hung, 53, toils all day cleaning garbage from the bustling streets of Hanoi’s central Dong Da district.

    “It is impossible to avoid the heat, especially at noon and early afternoon,” Dinh told CNN. “Extreme temperatures also make the garbage smell more unpleasant, the hard work is now even more difficult, directly affecting my health and labor.”

    Dinh says “there is no other way” but to change when he starts and finishes his shift.

    “I try to work early in the morning or afternoon and evening,” he said. “During lunch break when the temperature is too high, I find a sidewalk in a small alley, spread out the cardboard sheets to rest for a while and then resume work in the afternoon.” 

    Phong and Dinh are among millions of drivers, street vendors, cleaners, builders, farmers, and other outdoor or informal economy workers across Southeast Asia who were hit the hardest during what experts called the region’s “harshest heat wave on record.” 

    Workers like them make up the backbone of many societies but are disproportionately affected by extreme weather events, with dangerously high temperatures greatly impacting their health and the already precarious nature of their professions.

    April and May are typically the hottest months of the year in Southeast Asia, as temperatures rise before monsoon rains bring some relief. But this year, they reached levels never experienced before in most countries of the region, including tourism hotspots Thailand and Vietnam. 

    Thailand saw its hottest day in history at 45.4 degrees Celsius (114 degrees Fahrenheit) on April 15, while neighboring Laos topped out at 43.5 degrees Celsius (110 degrees Fahrenheit) for two consecutive days in May, and Vietnam’s all-time record was broken in early May with 44.2 degrees Celsius (112 degrees Fahrenheit), according to analysis of weather stations data by a climatologist and weather historian Maximiliano Herrera.

    Herrera described it as “the most brutal never-ending heat wave” that has continued into June. On June 1, Vietnam broke the record for its hottest June day in history with 43.8 degrees Celsius (111 degrees Fahrenheit) – with 29 days of the month to go.

    In a recent report from the World Weather Attribution (WWA), an international coalition of scientists said the April heat wave in Southeast Asia was a once-in-200-years event that would have been “virtually impossible” without human-caused climate change.

    The scorching heat in Southeast Asia was made even more unbearable and dangerous due to high humidity – a deadly combination.

    Humidity, on top of extreme temperatures, makes it even harder for your body to try and cool itself down.

    Heat-related illnesses, such as heat stroke and heat exhaustion, have severe symptoms and can be life-threatening, especially for those with heart disease and kidney problems, diabetes, and pregnant people.

    “When the surrounding humidity is very high, the body will continue to sweat trying to release moisture to cool itself, but because the sweat is not evaporating it will eventually lead to severe dehydration, and in acute cases it can lead to heat strokes and deaths,” said Mariam Zachariah, research associate in near-real time attribution of extreme events to climate change at World Weather Attribution initiative at Imperial College London. 

    “Which is why a humid heat wave is more dangerous than a dry heat wave,” she told CNN.

    To understand the health risks of humid heat, scientists often calculate the “feels-like” temperature – a single measure of how hot it feels to the human body when air temperature and humidity are both taken into account, sometimes alongside other factors such as wind chill.

    Perceived heat is usually several degrees higher than observed temperature and gives a more accurate reading of how heat affects people.

    CNN analysis of Copernicus Climate Change Service data found that between early April and late May, all six countries in the continental portion of Southeast Asia had reached perceived temperatures close to 40 degrees Celsius (104 degrees Fahrenheit) or more every single day. This is above a threshold considered dangerous, especially for people with health problems or those not used to extreme heat.

    In Thailand, 20 days in April and at least 10 days in May reached feels-like temperatures above 46 degrees Celsius (115 degrees Fahrenheit). At this level, thermal heat stress becomes “extreme” and is considered life threatening for anybody including healthy people used to extreme humid heat.

    Throughout April and May, Vietnam, Cambodia, Laos and Malaysia all had several days with potential to cause extreme heat stress. Myanmar had 12 such days – until Cyclone Mocha brought relative relief, but severe devastation, when it made landfall on May 14.

    The April-May heat wave in Southeast Asia caused widespread hospitalizations, damaged roads, sparked fires and led to school closures, however the number of deaths remains unknown, according to the World Weather Attribution report.

     The study found that, because of climate change, the heat was more than two degrees hotter in perceived temperature than it could have been without global warming caused by pollution.

    “When the atmosphere becomes warmer, its ability to hold the moisture becomes higher and therefore the chances of humid heat waves also increase,” Zachariah, one of the authors, told CNN.

    If global warming continues to increase to 2 degrees Celsius (3.6 degrees Fahrenheit), such humid heat waves could occur ten times more often, according to the study. 

    And if emissions continue to increase at the same pace, the next two decades could already see 30 more deaths per million from heat in Thailand, and 130 more deaths per million by the end of the century, according to the UN’s Human Climate Horizons projections.

    For Myanmar that number would be 30 and 520 more deaths per million respectively, for Cambodia – 40 and 270, data shows.

    Extreme weather events also expose systemic inequalities.

    “Occupation, age, health conditions and disabilities, access to health care services, socioeconomic status, even gender – these are all factors that can make people more or less vulnerable to heat waves,” said Chaya Vaddhanaphuti, one of the WWA report’s authors and lecturer at the department of geography at Chiang Mai University in Thailand.

    Marginalized members of society, those without adequate access to healthcare and cooling systems, and those in jobs that are exposed to extremely hot and humid conditions are most at risk of heat stress.

    “It’s important to talk about who can adapt, who can cope, and who has the resources to be able to do this,” Emmanuel Raju, also an author and director of the Copenhagen Center for Disaster Research, said in a press conference on May 17.

    “For those working in the informal economy a lost day means a day lost in wages,” Raju said.

    More than 60% of the employed population in Southeast Asia work in informal employment, and over 80% in Cambodia and Myanmar, according to a 2018 International Labour Organization (ILO) report.

    Farmers and children harvest rice in a field in the southern Thai province of Narathiwat on March 27.

    In late April, Thai health authorities issued an extreme heat alert for the capital Bangkok and several other places across the country, warning people to stay indoors and of heat stroke dangers.

    But for migrant workers like Supot Klongsap, nicknamed “Nui,” who temporarily left his home to work in construction in Bangkok during the pre-monsoon season, staying indoors was simply not an option.

    He said that this year’s hot season was exceptional, causing him to sweat all the time and feel exhausted. “I started to sweat from 8 a.m., and it was difficult to work. I felt very exhausted from losing so much water.”

    Nui, who slept at the construction site, said even the nights were unbearable. “Water coming from the pipe even during nighttime remained very hot just like it was boiled. It was difficult to find comfort.” 

    He said the accommodation for construction workers is roofed and walled with corrugated sheets, and it barely protects from heat. Any access to air-conditioned rooms is a luxury Nui couldn’t afford. “We had to rely on buying ice and adding it to our drinks, our simple way to cool down,” he said.

    A 2021 study found that outdoor workers in developing countries have higher core body temperature than to those working indoors, and they are two to three times more at risk of dehydration, leading to a higher chance of reduced kidney function and other related conditions. 

    Pedestrians use umbrellas to shield themselves from the sun in Bangkok, Thailand, on April 25.

     In Thailand, the government recommends reactive measures, such as staying indoors, hydrating adequately, wearing light-colored clothes, and avoiding certain foods, Chaya told CNN. 

    “But that doesn’t mean that everybody has the same capacity to do so.” 

    The burden of cost often falls on individuals, Chaya said, making it their responsibility to cope with the heat.

    What is needed, he said, is a cohesive international plan that can protect the more vulnerable populations in the face of increasing climate change risks, and proactive measures to prevent potential health issues.

    Governments need to develop large-scale solutions, such as early warning systems for heat, passive and active cooling for all, urban planning, and heat action plans, World Weather Attribution scientists recommended in their report.

    Intensifying heat waves not only affect individuals’ health, but threaten the environment and people’s livelihoods, worsen air quality, destroy crops, increase wildfire risk, and damage infrastructure – so the need for government action plans on heat waves are vital.

     In Yotpieng and Phon villages in northeastern Laos, people’s livelihoods are intimately connected with weather patterns.

     Villagers’ lives here revolve around tea. For centuries, every day at 7 a.m. the tea farmers start collecting leaves, until 11 a.m. when they would bring the harvest back home. The survival of these communities depends on collecting tea leaves to generate income for whole families.

    But this year’s extreme heat is disrupting their ability to work according to their ancient working habits – they had to change from working in the morning to the afternoon during heat waves, and they are worried the quality and quantity of tea leaves will be affected, members of the local community told CNN.

     ”[The] weather is extremely hot for everyone this year and farmers are struggling,” according to Chintanaphone Keovichith, management officer at the Lao Farmer Network.

     “This year the weather is hotter than last year, and the tea leaves are dry,” said tea farmer, Boua Seng.

    The manager of a 1,000-year-old tea processing factory, Vieng Samai Lobia Yaw, said she is worried this year’s tea leaves have not grown enough, which decreases harvest by almost 50% daily.

    This photo taken on May 30 shows a woman watering her rooftop to cool it down in Hanoi, Vietnam.

    “It’s so wasteful – we spend more capital on laborers’ fees but getting less product,” she said.

    For now, tea farmers in Laos have invented solutions to protect their trees. Some have planted large fruit trees, such as peach or plum, to provide shade for tea plantations, while others added more compost to nourish their plants.

    “The tea [trees] in the shade will have a nice green leaf, but the ones without shade will have yellow leaf,” explained tea farmer Thongsouk. “We also collect additional income by selling fruit products.” 

    But they cannot do it alone.

    Without a comprehensive international approach to rapidly reduce planet-warming pollution and to address the interconnected impacts of extreme weather events on individuals, communities, and the environment, the health and economic costs from heat waves will only worsen as the climate crisis unfolds.

    As May turns into June, many are still waiting for some respite.

    “May was the worst month – that’s when the rain usually comes in, but this year [it] still hasn’t arrived yet,” said Chintanaphone.

    Data graphics
    Lou Robinson and Krystina Shveda

    Editing
    Helen Regan

    Photo editing
    Noemi Cassanelli

    Additional reporting
    Kocha Olarn in Bangkok

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  • Bud Light sales keep slipping. But it remains America’s top-selling beer | CNN Business

    Bud Light sales keep slipping. But it remains America’s top-selling beer | CNN Business

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    New York
    CNN
     — 

    Roughly two months after Bud Light endured a self-induced injury that torpedoed sales, the brand continues to lose ground to its competition. But there are signs the worst might be over.

    Sales for the week leading into Memorial Day weekend fell 23.9% from the same period a year ago. That constitutes a slight improvement compared to the week prior when sales were 25.7% lower than a year earlier. That could indicate that the “bottom has been hit and we are seeing a turn-around in performance,” according to Bump Williams, an alcohol industry expert.

    For the past several weeks, Bud Light sales declines have hovered around 25% weekly because of customer revolt following an Instagram partnership with transgender influencer Dylan Mulvaney. A single can bearing her face was given to her for a post, but some right-wing media attacked the brand, and some social media posts spewed transphobic comments.

    Anheuser-Busch’s tepid statement about the controversy also angered some LGBTQ+ groups.

    In response, Anheuser-Busch

    (BUD)
    said it was bolstering marketing on Bud Light and would offer rebates to customers. Last weekend, the company offered $15 back on 15-packs of beer, leading to cases priced as low as $1.50 in some states, which Williams said contributed to part of its minor turnaround.

    Still, Bud Light remains the top-selling beer in America, according to NIQ data provided to CNN by Williams. NIQ measures sales at convenience, liquor and grocery stores across the United States. Bud Light has made up 35.1% of domestic beer sales this year (through May 27), according to NIQ. That easily beats No. 2 Coors Light, which controls 21.6% of the market.

    Although Bud Light’s share of the domestic beer market has slipped considerably over the past couple months, it remains in the lead. In the week ended May 27, Bud Light controlled 28.8% of the market, compared to Coors Light, which made up 25.6% of overall sales, NIQ reported.

    The biggest beneficiaries of Bud Light’s slipping sales continue to be MolsonCoors’ Miller Light and Coors Light, with sales up a whopping 26% and 23% respectively, according to NIQ. Beer Business Daily reported Monday that some distributors are reporting shortages, but a company spokesperson told CNN that its supply is strong for the summer.

    Another bright spot is Modelo, distributed by Constellation Brands

    (STZ)
    . Sales of its Modelo Especial and its recently launched low-carb beer Modelo Oro are strong, with sales up 9.5% and its share of the total beer category surpassing Bud Light last week, Williams said. He added that it’s “not a surprise” because of a halo effect from Cinco de Mayo and heavy advertising supporting its Oro launch.

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  • El Nino is approaching and your next cup of coffee could be at risk

    El Nino is approaching and your next cup of coffee could be at risk

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    A cup of Espresso coffee in Cascais, Portugal on October 11, 2021.

    Nikolas Kokovlis | Nurphoto | Getty Images

    Extreme weather conditions brought on by an approaching El Nino are fueling concerns that robusta beans in major coffee producers like Vietnam and Indonesia could be hit, resulting in soaring prices.

    “The now widely-expected transition to El Nino conditions in Q323 has stoked fears of reduced output in Vietnam and Indonesia, both major coffee robusta producers,” Fitch Solutions’ research unit BMI said in report dated May 24.

    Robusta beans are known for their bitter characteristics and higher acidity, containing more caffeine than their premium and pricier arabica counterpart.

    Brazil’s robusta crop has also been negatively impacted by drought as well, the report said.

    That means the cost of instant coffee and espressos, which are often made with robusta beans, could come under pressure amid supply worries and a stronger than usual demand for robusta as consumers turn to cheaper substitutes for arabica.

    El Nino is a weather phenomenon that typically brings hotter and drier than usual conditions to the central and eastern tropical Pacific Ocean. Climate scientists are predicting that this year’s El Nino could descend in the second half of 2023

    Southeast Asia recently saw record-breaking heat in the middle of May.

    Asia, generally speaking, has taken a liking to Robusta more so than Arabica, and as such the demand for Robusta is growing at a much faster rate

    Shawn Hackett

    President of Hackett Financial Advisors

    “Across Southeast Asia, El Niño conditions are associated with below-average rainfall and higher temperatures, both of which depress coffee production,” the BMI report said.

    Vietnam, Indonesia and Brazil are the largest producers of robusta, according to the Food and Agriculture Organization.

    “We draw attention to heavy rains in Indonesia through Q123, which have had a negative impact on coffee bean quality, with the USDA forecasting a decline of about one fifth in coffee robusta production,” the analysts said.

    Carlos Mera, head of agri commodities markets at Rabobank, is forecasting a 10% drop in production to 11.2 million bags of robusta in the coming crop harvest.

    A man holding Robusta coffee beans at a coffee tasting fair in Buon Ma Thuot city in Daklak province, Vietnam. Bitter and earthy. fit for instant brews only.

    Nhac Nguyen | Afp | Getty Images

    In 2016, El Nino-related water shortages in both Vietnam and Indonesia led to a global production decline of close to 10%, according to the research unit’s statistics.

    Typically, in an El Nino year, it is “not uncommon” for Vietnam and Indonesia to “see a 20% decline in production” in robusta beans, Shawn Hackett, president of commodity brokerage firm Hackett Financial Advisors, told CNBC.

    “That would mean a pretty severe contraction of robusta,” he said.

    Rising demand for the robusta

    Robusta beans account for 40% of the world’s coffee production, and arabica beans make up the remaining 60% of global coffee production. Arabica beans are usually deemed to be of higher quality and command higher prices than robusta coffee.

    However, global economic pressures are tipping demand toward robusta, the underdog of coffee beans.

    Robusta prices are supported as coffee-product manufacturers and consumers substitute robusta beans for pricier arabica beans to save costs during inflationary times, the BMI report said.

    Robusta coffee prices recently soared to a 15-year high of $2,783 per ton toward the end of May. They last traded at $2,608 per ton for July futures, according to data from the Intercontinental Exchange.

    Additionally, the premium that arabica beans have over robusta beans plunged to the lowest since 2019 due to soaring demand for the relatively cheaper coffee bean.

    “Asia, generally speaking, has taken a liking to robusta more so than arabica, and as such the demand for robusta is growing at a much faster rate than demand for arabica,” said Hackett.

    He cited the lower price point of robusta beans in Asia and the population’s palette for robusta-bean based drinks. 

    Kopi, also known as Nanyang coffee, is a dark coffee beverage popular in Southeast Asia that’s traditionally brewed using robusta beans.

    A farmer harvesting coffee cherries at a coffee plantation in Central Java, Indonesia, on May 25, 2023.

    Dimas Ardian | Bloomberg | Getty Images

    But Asia is not the only region that has taken an increased liking to robusta.

    “While the reduction in washed arabica imports is partially due to lower availability … the shift to robusta shows that cheaper coffees are being heavily preferred by the European market,” said Natalia Gandolphi, analyst at HedgePoint Global Markets’ Intelligence.

    Gandolphi said she expects a deficit of 4.16 million bags of robusta for the October 2023 to September 2024 period.

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  • Bud Light troubles prompts call to buy stocks of Boston Beer, Constellation Brands

    Bud Light troubles prompts call to buy stocks of Boston Beer, Constellation Brands

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    Bud Light’s recent troubles should worsen in the summer, to the benefit of its competition’s brands, enough to turn Roth MKM analyst Bill Kirk bullish on the stocks of Constellation Brands Inc. and Boston Beer Co. Inc.

    Kirk raised on Tuesday his rating on Modelo, Corona, Pacifico beer parent Constellation Brands to buy, after being at neutral since January 2021, while boosting his stock price target to $270 from $216.

    Kirk said a lot of the market share Anheuser-Busch InBev SA’s Bud Light lost, amid backlash from the beer brand’s partnership with trans influencer Dylan Mulvaney, went to other premium light products, but he expects that to shift to Constellation’s favor.

    “As the weather warms, we expect the share gains for Modelo Especial and Corona to accelerate,” Kirk wrote in a note to clients.

    Constellation Brands’ stock
    STZ,
    +1.79%

    rose 1.5% in afternoon trading Tuesday toward the highest close since Dec. 12, 2022, while Anheuser-Busch shares
    BUD,
    -4.71%

    slumped 4.5% toward the lowest close since Nov. 10.

    Also read: Bud Light anti-trans backlash has some weighing potential ‘chilling effect’ on corporate LGBTQ+ support

    He noted that weekly scanner data has shown that Constellation’s beer portfolio outperformed the broader beer market by seven percentage points in early 2023, and that outperformance improved to 10 percentage points at the beginning of Bud Light’s market-share losses in April.

    “With temperatures warming and substitutability with Bud Light increasing, recent weeks have seen 13 [percentage points] of outperformance,” Kirk wrote. “This trend should continue as Bud Light [declines/peak] over summer holidays.”

    For Samuel Adams, Truly, Twisted Tea parent Boston Beer, Kirk raised his rating to buy, after being at neutral for at least the past three years. He raised his stock price target to $386 from $274.

    Boston Beer’s stock
    SAM,
    +5.37%

    jumped 6.8% toward the highest close since Feb. 15.

    Earlier this year, Kirk was concerned that Truly hard seltzer’s weakness continued, offsetting Twisted Tea’s success, and that gross margins weren’t improving even after moving more production in-house.

    Read more: Bud Light crisis: It’s unclear how U.S. volume drop will end, analysts say

    “Now, we believe seltzer and Truly will benefit in the summer from Bud Light share losses (occasion overlap increases with warmer weather) and gross margin lift from production shift will be realized in 2Q (given inventory days timing),” Kirk wrote.

    He believes that will shift investor focus away from Truly’s weakness and toward Boston Beer’s brands that are growing.

    And while Wall Street expects the trends Boston Beer saw in the first quarter to continue throughout 2023, Kirk now believes the company will beat expectations for shipments and depletions, and sees opportunities for margins to also beat forecasts.

    “While we had written at 1Q that the ‘timing of upside surprises remains unclear,’ we now believe the timing is Summer 2023,” Kirk wrote.

    Constellation Brands’ stock has gained 5.7% over the past three months and Boston Beer shares have advanced 4.8%, while Anheuser-Busch’s stock has dropped 10.1% and the S&P 500 index
    SPX,
    +0.00%

    has gained 5.9%.

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  • Nestle Names New CFO

    Nestle Names New CFO

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    By Mauro Orru

    Nestle appointed Anna Manz from the London Stock Exchange Group to succeed Francois-Xavier Roger as chief financial officer after he decided to step down in pursuit of new professional challenges.

    The Swiss packaged-foods giant said Tuesday that Manz would take over as soon as she is released from her present duties as chief financial officer and board member at the London Stock Exchange Group. Roger will remain in place until then, Nestle said.

    “Anna has spent her career growing businesses and improving operational efficiencies,” said Chief Executive Mark Schneider. “Her deep knowledge of the consumer goods industry, combined with her extensive experience across many corporate functions, make her uniquely positioned to help lead Nestle into its next phase of value creation.”

    Write to Mauro Orru at mauro.orru@wsj.com; @MauroOrru94

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