00:00The guidance was a little soft last night, but I think this morning on the call, the company kind of
00:04made the case that March sales were quite strong.
00:09They feel like that momentum in this early part of the year is going to kind of carry on through
00:13the summer.
00:14And with that, they're planning to kind of support the early momentum with I think the word they used was
00:19an aggressive marketing campaign.
00:21So if you think about the big events we have in the summer, makes a lot of sense.
00:24We have the World Cup. The company expects that to be kind of a growth driver, especially for their bigger
00:28brands.
00:29Modelo, Corona, you know, we all associate those with the summer as well.
00:32So it makes a lot of sense. So I think that's kind of explaining a little bit of the share
00:35move that we're seeing.
00:36The question now, I guess, becomes whether or not that this is just a blip or they're still kind of
00:40subject to the sort of secular decline we're seeing in the other parts of the alcohol industry.
00:44How much of this software outlook is macro driven?
00:47We know that it's not really a good economy. Consumers are feeling pinched as opposed to with the products themselves.
00:52Yeah, no, the company is making the case with when they kind of justified their guidance and it is the
00:59lack of economic visibility.
01:01They also withdrew their 2028 guidance as well for the same reason.
01:06They say we just can't see that far out in advance at the moment.
01:09But again, it kind of comes back to this question about whether or not it is an economic situation that
01:13they're kind of dealing with right now.
01:15Or it is just they're subject to the kind of consistent decline we see in the beer market. Analysts are
01:20kind of split on what what the real situation is.
01:24You mentioned some of the brands Modelo and Corona brands that identify with the Hispanic audience in this country.
01:32The companies in the past has called out the change in immigration policy is impacting having an impact.
01:37What are they updated their thoughts there?
01:39So during the call, they said they actually saw a sequential improvement in those zip codes that have a higher
01:44Hispanic population.
01:47So, you know, I guess it doesn't tell us a ton if it's just a sequential improvement from sort of
01:53a lower start. Right.
01:55They didn't give any sort of specific details on just how much of an improvement it was.
01:58So I guess it's something that we still need to kind of keep an eye on.
02:00What about I mean, the company in general has benefited from premiumization.
02:05Are we seeing customers trade down and what trends are they pointing to?
02:10Yeah, the company said that that trend is continuing.
02:12So they're still seeing some strength within their premium brands.
02:15I think what may be going on is that people are drinking less, but when they do drink, you know,
02:19maybe I'll reach for the nicer options.
02:22So we've seen that in other parts of the alcohol industry as well.
02:24So like, you know, spirits tend to has has been pushing premiumization as well.
02:29So that that trend might, you know, maybe we don't think of beer as necessarily always like a premium option,
02:34but there are sort of ways to trade within the category.
02:37All right. You're of that demo, a younger demo.
02:41Are you guys drinking beer?
02:42Are you drinking the red white claws and all that iced tea stuff and all that?
02:46Yeah, no, it's I guess when you go, I mean, obviously, New York's a specific, you know, beer.
02:51I mean, alcohol culture, bar culture.
02:54But I guess when you do go out there, you do see more people kind of holding cans.
02:57A lot of the times it's less a white claw that it's more less seltzers these days.
03:03It's more these ready to drink.
03:04So think of like a surf side, which is like a spiked lemonade, a spiked iced tea.
03:08Those are really popular right now.
03:09And it all kind of comes back to this idea that people are just changing the way they drink.
03:13They're being more conscientious with how they drink.
03:16You know, they still want to be social, be out talking to people, you know, their inhibitions go.
03:20But they want to not deal with all the all of the health consequences when it comes to drinking.
03:26They don't want they want something that's a lower calorie.
03:27They want something that's lighter, easier to drink.
03:30So I guess, you know, that that's it's it's a debate that's been going on for a long time of
03:34like our younger people actually drinking less.
03:37It's it's really kind of hard to like tease out in the data or they're just like changing.
03:41Like we're saying, they're just picking different constellation.
03:43Are they happy with their portfolio of brands?
03:45Are they think they're they always buying and selling stuff?
03:47I think right now they should be happy.
03:50They have some of the most popular brands like Modelo, obviously unseated Bud Light a few years ago as the
03:55most popular beer brand in the country.
03:58Corona, I think, is fifth.
03:59They also have Pacifico is one of the highest growing brands as well.
04:04So I think that they should be pretty happy with that stable.
04:07But, you know, we've seen deals happening in obviously the sort of rumors around Brown Foreman potentially merging in a
04:14couple of weeks ago.
04:15So, you know, in in this sort of shrinking market to gain growth, there's going to be probably more of
04:21these sort of swaps, you know, in portfolios.
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