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December 11, 2023Festive Spending, November Figures & Marston's Report ...
Welcome to 7 Day Cellar's alcohol industry update, where we cover everything you need to know about this week in the alcohol industry. We look at everything, from hospitality company annual results to insights into the economy, not forgetting key product updates and regulation changes - you won't want to miss it.
In this week's edition, we have deeper insights into consumers' Christmas spending, results from Marstons PLC alongside Diageo's plans to offload key brands some of its key brands. We’ve covered everything important to keep you in the know, so let's kick things off with some Christmas spending insights …
UK consumers are gearing up for a festive spending spree, with a survey by Double Dutch revealing that they plan to spend up to £200 on Christmas outings, a threefold increase from the previous year. Pubs and bars are set to be the biggest beneficiaries, with over 44% of consumers prioritizing visits over other spending categories like clothing, home improvements, and holidays.
In the beverage industry, Artisanal Spirits update on trading, indicating that H2 has shown improvement, but revenue is expected to be below forecasts at approximately £23 million, citing a weaker performance in China in Q4-23.
In the brewery sector, Marston’s reports strong trading with LfL sales of +10.1%, outperforming the industry rate. The company anticipates a 7.4% LfL sales increase for the first 9 weeks of FY24, with robust Christmas bookings. They also detail cost efficiencies and a 2% EBIT margin improvement over the next 2-3 years.
Red Oak Taverns renews its relationship with OakNorth Bank and refinances its debt, returning to its old bank after a brief stint with Hayfin in March 2022. They’ve grown from 32 units in 2012 to 227 today.
The Oxford Partnership reports positive trends in Christmas trade for UK pubs, with draught pint volumes up 2.3% YoY. Despite tough World Cup comparisons, 35.9 million pints were sold, with Stout leading gains at +30.3% and Ale at +10.3%. Moreover, Saturday trading grew with a 40% rise in December reservations.
JD Wetherspoon has spent £4.7m on buying back 650k of its shares at 727p – suggesting there’s optimism about the company’s projected future growth and outlook.
Greene King CEO Nick Mackenzie has been elected as chairman of the BBPA (British Beer and Pub Association), replacing St Austell Brewery CEO Kevin Georgel who first acted as the chairman in 2021.
Across the economy, Barclaycard reports a +2.9% increase, in year-on-year November spending. Despite this, Barclaycard reports British confidence in their ability to spend on non-essential items was at its highest level since April (56%). Moreover, the UK Manufacturing PMI rose to 47.2 in November, up from October’s 44.8, showing signs of economic improvements.
Pub operator Brakspear announces promotions within its management team, with Tony Lewis becoming property director and David Nathan as COO from CFO.
Cash transactions in the UK rose to just under 19% in 2022 from 15% in 2021, marking the first increase in a decade.
Chapel Down, England’s leading wine producer, which ‘owns, leases and sources from 1,023 acres of vineyards’, listed its shares on AIM.
Brown Forman Corporation, which produces Jack Daniels and Southern Comfort brands, reported a 1% increase in net sales to $1.1 billion in Q2. Operating income rose by 8% to $339 million, and diluted earnings per share increased by 6% to $0.50.
Diageo is seeking to sell its beer portfolio while retaining the Guinness brand. Brands like Smithwick’s, Kilkenny, Harp Lager, and Tusker Lager would be offloaded.
Premium bar operator Drake & Morgan reported a 20.6% turnover increase to £43.3 million. Adjusted EBITDA fell to £4.1 million from £5.0 million due to train strikes, costing £2.5 million and £1.4 million in lost sales and EBITDA in FY23.
Ringwood Brewery will close in January 2024. Marston’s and Banks will brew the Hampshire-based brewery’s ales, like Razorback and Old Thumper elsewhere.
It’s becoming harder to source craft brewery products, as SIBA reported a net loss of -9 UK craft breweries in Q3. The South West experienced the largest net loss of 6 breweries.
BRC footfall data revealed a -0.4% decline on London high streets in November, improving from -2.9% the prior month.
