Beer Sales Slump 55% During Memorial Day, Goldman Sachs Reports

Goldman Sachs has released a report on the U.S. beer market, highlighting the views of beer distributors regarding market trends. The report reveals that the beer market's performance during the Memorial Day weekend was underwhelming, failing to meet expectations. Approximately 55% of distributors reported that sales trends during Memorial Day were weaker than the previous year, with about 13% of respondents stating that the decline was significant.

In terms of brand performance, distributors noted that Anheuser-Busch InBev showed the strongest sales trend during the Memorial Day weekend, with 35% of distributors reporting an increase in sales compared to the previous year. Following closely were Constellation Brands and Boston Beer Company. Heineken, however, performed poorly, with 66% of distributors reporting a decrease in sales compared to the previous year.

Goldman Sachs attributes the challenging macroeconomic environment as the primary factor affecting beer sales. Consumers have seen a reduction in disposable income, leading them to prioritize essential purchases over non-essential items. Additionally, recent policy changes and unfavorable weather conditions have also impacted beer consumption.

Looking ahead, distributors are generally cautious about the prospects for the summer beer sales season. Fifty-six percent of respondents expect sales to be weaker than the previous year. Furthermore, distributors anticipate that beer category sales will decelerate further this year, with a projected decline of 1.9%, and a 1.0% decline in 2024.

Given the challenging macroeconomic environment, Goldman Sachs has adopted a selective strategy to identify the most promising targets. Based on this, Goldman Sachs reiterates its "buy" rating for Constellation Brands, as distributors have indicated some potential positive signals in the company's monthly sales trends, particularly in May. Goldman Sachs maintains its "buy" rating for Molson Coors Beverage Company, as its Miller beer has gained more market share.

Finally, Goldman Sachs remains cautious about Boston Beer Company, despite the potential for growth in its Sun Cruiser brand. However, the growth trend for Twisted Tea is slowing, and Truly's sales continue to decline.