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El Nino may cause global beer prices to rise, the demand side is still strong

Recently, El Nino signs have affected large areas around the world. According to the UN Food and Agricultural Structural Materials, agriculture is one of the major economic sectors that can be severely affected by El Nino symptoms. The weather conditions of heavy rain, flooding, and extreme heat or cold caused by El Nino symptoms can lead to outbreaks of animal diseases as well as animal pests and bush fires.

Specifically for beer, Barclays analysts believe that El Nino signs will cause beer prices to fall. In particular, El Nino will drive up the price of wheat and barley, as well as the price of sugar, which is used to make fizzy drinks. Looking at historical materials, the FAO Structure Food price Index declines on average 16 months after the onset of El Nino symptoms. In terms of brands, Barclays analysts said AB InBev, Nur and soft drinks maker Britvic were likely to feel the most inflationary pressure.

It is worth noting that even if the price of beer falls, there is still room for promotion at the end of consumption demand, and beer does not see the situation of rising quality and price. Focusing on China’s shopping malls, open source securities analysts believe that in April to go, low base superimposed under the construction of catering scenes need to be promoted, beer production quality deleted 21.1%. To see throughout the year, due to the construction of the catering scene, the need to wake up, beer still does not see to maintain a high prosperity.

On the other hand, successive El Nino signs can also be an important catalyst for beer sales. The temperature rises from June to August every year, which is usually the off-season for conservative beer sales, and the holding of summer beer festivals, music festivals and other sports provides a consumption scene for the public. This year, with the continuous low temperature weather and the return of travel due to the fading of the epidemic, the beverage market, including beer, will be in a high boom.

Although the El Nino phenomenon can affect the supply of brewing raw materials, resulting in a decrease in beer prices, the breakdown cost income of wine companies is relatively optimistic, and the revenue of cash is not reduced. Huatai Securities analysts pointed out that in 2023, although the purchase price of barley is still at a high level, but the price of aluminum cans, cartons and other packaging materials is falling, the decomposition cost pressure of liquor enterprises has slowed down significantly compared with 22 years, Qingdao Beer and Chongqing Beer are estimated that the ton cost of enterprises in 23 years is flat to a low single digit deletion, which is significantly improved compared with 22 years.

Globally, the beer market continues to be bullish. According to the “2023 Craft Beer Industry Research Statement” released by Jauding Consulting, the annual composite deletion rate of the global craft beer market scope will reach 11.2% before it goes to 8 years, and it is estimated that the beer market scope will be higher than 1.7 trillion yuan by 2030.

Overall, the El Nino signs will be able to affect the price of beer from the material side, but the low temperature weather, the recovery of the market and the improvement of the cost of the combined impact, do not see the off-season beer sales and cost caused a positive catalyst.

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Corona parent Constellation Brands’ first-quarter net profit fell 60% from a year earlier as the company spun off its craft brewing business

Constellation Brands Limited (Constellation Brands, hereinafter referred to as “Constellation brands”) recently announced the first quarter of the fiscal year 2024 financial results, time opened March 1, 2023 – May 31, 2023. Overall, Constellation brand net sales of 2.515 billion US dollars, an increase of 6.39%, net profit of 136 million US dollars, a drop of 65.11%.

Among them, the net sales of the beer business segment were 2.098.6 billion US dollars, an increase of 10.56%. Wine segment net sales of $361.0 million, down 10.67% year over year. Spirits segment net sales of $55.3 million, down 9.20% year over year.

It can be seen that the beer sector sales climb on the company’s net sales increase has played a decisive impact. Analysis shows that the increase in beer net sales was mainly driven by higher volumes and the favorable impact of pricing.

According to the material, Constellation Group was founded in 1945 to handle the brewing and marketing of beer, wine and spirits, and owns more than 200 brands, including well-known beer brands Corona and Modelo, as well as the most important winery in the United States, Robert Mondavi.

In the new fiscal year, Constellation brand business changes and personnel changes frequently. In May 2023, Constellation Brand management decided to break into the craft beer business and sold Daleville, a craft beer workshop in Virginia, to New Belgium. Completed in 2017, the 259,000-square-foot facility houses products such as beer and flavored malt beverages.

In June 2023, Constellation Brand officially achieved the spin-off of craft beer. The company said the craft beer divestiture is in line with its strategic focus, which is to inherit and grow high-end imported beer brands through pillar leading margins and strengthening operational performance.

On The other hand, on June 26, Constellation Brand announced the purchase of Domaine Curry, a high-end Wine brand in Napa Valley, California, which will be included in the renovation investment of The Prisoner Wine Company in California, and the strong wine sector will operate. It is worth noting that Curry Winery was established in 2018 by the family of NBA Warriors star Stephen Curry.

In terms of personnel, the company recently announced that Rob Sands, Chief executive officer of the Constellation Brand, will step down as the president of the Board of Directors in March next year, and Bill Newlands, president of the company’s wine and Spirits segment, will replace him. Bill Newlands joined the Constellation Group in 2015 as executive Vice President and Chief recruiter. “Bill has a deep understanding of what it takes to make Constellation one of the best-performing Fortune 500 companies in the world and is waiting for Constellation to succeed under Bill’s guidance,” said the statement issued by Rob Sands.

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ofo founder Dai Wei’s second venture in the United States is in trouble: the capital chain is blocked, and the expansion is completely stalled

ofo founder Dai Wei’s American Coffee business, About Time Coffee, has recently attracted hot media discussion at home and abroad. According to a Bloomberg report, About Time Coffee’s coffee brand has closed four stores in New York since February this year. She quickly became an “Internet celebrity” on TikTok and Instagram.

However, interface news Erzi learned from multiple independent sources that About Time Coffee’s current operation has fallen into adversity, the capital chain has hit a bottleneck, and the entire name is close to the edge of the camp. A person close to the purpose informed Erzi, at present About Time Coffee in New York has begun to close the store, “the name of the initial strategy is very clear, that is, spread in the East coast of the United States with a high density of teeth and megacity structure, now in addition to New York, other metropolitan store events simply can not pull, the entire East United States site has stopped.” The insider performance. Another informed person close to Dai Wei proved to Erzi that the expansion planning of the entire About Time Coffee chain stores has been thoroughly run, and the operation of the original stores is also in a stop, with a simpler operation as the pillar, and the internal members are looking around.

“Offline Coffee shops are very expensive, and About Time Coffee is likely to break the capital chain again.” A familiar with Dai Wei before the purpose of VC people did not analyze.

When Erzi asked About the operation of About Time Coffee stores on the Internet, he found that there were two focus stores in New York in the last two months, and according to the hot criticism on the review website, the flagship store of about time located on Fifth Avenue in New York has been running business for several months. Previously, in order to absorb the flow of people, About Time Coffee’s New York stores were mostly located in Manhattan, the most densely populated area.

On May 17, Bloomberg first reported the latest status of Dai Wei, who has been out of the public eye for several years.

According to Bloomberg News, Dai Wei has since returned to the United States, where he first started a stationary power rental company in Seattle, and then joined About Time Coffee in New York. It is reported that Dai Wei has raised more than $10 million in capital for About Time Coffee from several VCS such as IDG, ZhenFund and Vihunt Resources, and the project is currently valued at $40 million. In addition, Dai Wei is a minority shareholder in the current company, the company’s CEO is a Marian Chen Mies, she claimed that Dai Wei does not participate in the day-to-day operations of the company, is behind the “accumulator”, assistant formed the team and dominated the meetings with investors.

Since then, the news of Dai Wei’s second career in the United States has been rapidly fermented. In the past two years, due to the legacy achievements of ofo operators, “old good” and “ofo yellow car refund difficult” have been the central vocabulary of Dai Wei. In that year, under the influence of resources, ofo rapidly expanded, and the scenery was unlimited, but at the end of 2017, it was exposed that there was no capital chain break and the user deposit was called; At the end of 2018, tens of millions of online and offline users lined up to wait for more than 1 billion yuan deposit repayment; In July 2020, ofo headquarters people went to the building, and the collection channel was difficult to find; At present, ofo is still heavily in debt, and the number of online refund users is still more than 10 million, and the deposit range is at least 1 billion to be returned. According to Tian Eye check, Dai Wei has received a total of 40 consumption restriction orders, and the 6 ofo contact closed enterprises he is responsible for have not published 4, and he has also been listed by the court as the letter recipient (Lao Hao) and limited high consumption.

Under this setting, the criticism of Dai Wei “taking everyone’s deposit to maintain the business” has become a tributary reaction sound of the domestic social media to Dai Wei’s second maintenance. But in the United States, this year, the spread of About Time Coffee in the social media has been quite effective. At present, About Time Coffee operates three major social media platforms, Instagram, TikTok and LinkedIn. According to media statistics, About Time Coffee has accumulated 14,000 followers on Instagram, and the likes of each post are 50 times higher. #abouttimecoffee related videos on TikTok were also played 2.5 million times higher, and some of the high follower quality of the store blogger posted videos closed abouttime can get up to 4 million views, which is not bad for a new consumer brand.

“The coffee market in the United States is very large, but everyone needs to be very crowded, the request is very specific, the level of personalized customization is very high, and the situation of closing this wholesale coffee brand in the United States is much more difficult than expected,” A securities analyst who follows the coffee industry told Son that nearly half of American adults suffer from allergies, so they will have many complex requests for coffee, and it is difficult to compete without careful planning.

In terms of products, it can be found that About Time Coffee mainly hit cold brew, treasure coffee, taro coffee and other products. In terms of pricing, the unit price range is between $3 and $7, which is $1 cheaper than the average price of Starbucks, in fact, the most popular Boba taro coffee is priced at $3.95, which has also absorbed the foothold of many young New Yorkers.

“Although the price of $3 is cheap, it is really not up in New York as a coffee shop, in New York, the average price is 7-8 US dollars of fancy coffee can better survive, because the barista commission, room charge, advertising these costs are difficult to reduce.” The securities analyst performed.

At present, About Time Coffee has four stores in the New York area.

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Us inflation cooled sharply in June, with the end of the most aggressive rate hike cycle in 40 years in sight

U.S. inflation cooled sharply in June, raising fresh hopes that the Federal Reserve will soon end its most aggressive interest-rate increase in decades.

The U.S. Consumer price Index (CPI) fell 3 percent in June from a year earlier, according to data released by the Labor Department on Wednesday, well below the recent peak of 9.1 percent in June 2022 and down from 4 percent in May. The last time US inflation was close to 3% was in March 2021.

Still, inflation remains above the Fed’s 2% target. Fed members had indicated they would be able to raise interest rates again at their July 25-26 meeting, taking the benchmark rate to a 22-year high, given signs that recent economic activity has been stronger than expected. Wednesday’s inflation announcement is not expected to change that.

Last month, Fed officials left the target range for the federal funds rate unchanged at 5 percent to 5.25 percent. This is the first time they have raised interest rates since March 2022 after 10 consecutive hikes. The current rate increase cycle is also the most aggressive since 1982. A majority of Fed members at the meeting estimated that they would raise interest rates twice more this year.

Excluding volatile food and fuel prices, the CPI fell 4.8 per cent in June from a year earlier, the slowest pace since October 2021 and down from 5.3 per cent in May. Economists had estimated that the focus CPI would fall 5 per cent year on year.

Falling car prices, strong demand for labour-intensive services and an earlier surge in residential rental prices have contributed to persistently high levels of focus inflation.

George Mateyo, chief investment officer at Key Private Bank, said the latest report confirms that inflation is finally cooling, and that the Fed will see the data as confirmation that its strategy is countering the expected consequences: inflation has fallen, not stopped rising.

But policymakers tend to focus more on focus inflation than on headline inflation, believing that focus prices are a better purpose for guessing that inflation is not going away. Mateyo said the statement was unlikely to stop the central bank from raising interest rates again later this month.

On a month-on-month basis, the US CPI (seasonally consolidated) fell 0.2% in June, up from 0.1% previously. Focus CPI fell 0.2% month-on-month, the smallest monthly increase since August 2021, which means that underlying price pressures are gradually easing.

Specifically, power prices fell 0.6% month-on-month in June and 16.7% year-over-year. Food prices fell just 0.1 per cent month-on-month. Prices of used cars, the main source of soaring inflation in early 2022, fell 0.5% from the previous month.

Fed officials expect inflation to continue to fall, especially as housing costs fall. Housing costs account for about one-third of the weight of the CPI index. But the housing index fell 0.4% month-on-month and 7.8% year-over-year. According to the Bureau of Labor Statistics, this monthly increase accounted for about 70% of the CPI increase for the month.

Traders still expect the Fed to raise rates by 25 basis points at its July meeting, but they also think it could be the last.

After the CPI data was released, the Chicago Exchange’s interest rate watcher FedWatch showed that investors saw a 92.4 percent chance that the Fed would raise interest rates by 25 basis points at its July meeting, and a 75.8 percent chance that it would be the last such increase this year.

At the same time, slower inflation helped boost workers’ artificial earnings, with average inflation-adjusted hourly earnings falling 0.2% month-on-month and increasing 1.2% year-over-year. During the inflation surge, workers’ pay has lagged behind the increase in their lifetime costs.

The U.S. economy remains resilient this year, ignoring speculation of a downturn. Hiring slowed in June but remained strong, although consumer income cooled in May from the previous month. According to the Atlanta Fed’s latest estimate, GDP will grow at an annualised rate of 2.3% in the second quarter.

U.S. stocks fell across the board Wednesday, buoyed by Mongolian inflation data. The Dow Jones Industrial average was up 0.25% at 34,347.43. The S&P 500 fell 0.74% to 4,472.16; The tech-heavy Nasdaq index rose 1.15% to 13,918.96.

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Black Sea grain deal lights up yellow to threaten East Africa, Turkey, UN run at last minute

On Monday, the Black Sea grain shipment agreement, which has been rescheduled three times, expires again. Seeing that Russia deliberately renewed the treaty, the United Nations and Turkey opened a last-minute mediation.

Although Russia and Ukraine have opened a tug-of-war before the expiration of each agreement, and Russia has repeatedly threatened to withdraw from the agreement, but with the main pipeline transporting Russian ammonia, the Togliati-Odessa pipeline, and the NATO summit has increased support for Ukraine, Russia’s belief that it is not willing to change the date is more strong.

In the past month, senior Russian officials, including Russian Foreign Minister Rabu Rabu and Kremlin spokesperson Peskov, have commented that Russia does not see a reason to inherit the extension agreement.

Previous media reports said the EU was prepared to make no compromise, allowing Russian Agricultural Bank subsidiary to join the SWIFT system, but the initiative has been opposed by the Russian side.

If the Black Sea grain agreement is closed, East African countries, which rely on Russia and Ukraine for 80% of their grain imports, will be the hardest hit.

Last-minute pitch
According to Reuters on July 12, the United Nations Secretary General Guterres to the Russian leader Putin initiated the first Black Sea grain agreement extension for a few months, to give the EU time to Russian Agricultural Bank subsidiaries connected to the SWIFT system.

Last year, Europe and the United States imposed a stranglehold on major Russian banks, and nearly 10 major banks kicked out of the SWIFT system to attack Russia’s foreign business. One of the preconditions for Russia to extend the Black Sea grain shipment agreement is to reinstate the Russian Agricultural Bank into the SWIFT payment system.

Earlier, there was news that the EU was considering allowing the Russian Agricultural Bank to create a subsidiary, by which the subsidiary would handle the punishment of business transactions unrelated to food imports, and allow the subsidiary to be linked to the SWIFT payment system.

But last week, Russian Foreign Ministry spokeswoman Maria Zakharova objected to the launch, saying it would take months for Agricultural Bank to create a subsidiary and another three months to connect the subsidiary to the SWIFT system. She accused the initiative of being deliberately planned but not implemented, with the goal of pressuring Russia to extend the grain agreement.

In addition, Zakharova also opposed the initiative to have jpmorgan Chase transfer funds for the punishment unit of the Russian Agricultural Bank. In April, the Union prevailed on the United States to allow jpmorgan Chase to help the Russian Agricultural Bank handle transfers from the punishment department unrelated to agricultural imports.

The bank handled the first transfer in April and has since been able to handle 40 more transfers unrelated to Russian grain imports, according to sources familiar with the matter. But the first transfer was limited and went through a complex set of monitoring procedures.

In addition to talks with the United States, the United Nations is also in talks with the African Import Bank to create a new platform specifically to handle transactions that penalize Russian imports of grain and fertilizer into Africa.

Zakharova exaggerated that the similar practice of transferring money through jpmorgan Chase was no substitute for SWIFT and would not last long, and Russia’s plea was to get Agricultural Bank of Russia back into SWIFT.

In July last year, when Russia and Ukraine respectively signed agreements with Turkey and the United States on the Black Sea grain transport, the United States and Russia also concluded agreements, willing to help Russia’s normal import of agricultural products and fertilizers, including ammonia and other fertilizer materials. Although Western containment does not specifically target Russian agricultural products and fertilizers, the reality of containment in other areas, such as freight security and payment, limits the entry of relevant products.

Russia has been critical of broken promises. Stop in the first half of this year, Mongolia western subdue the role, Russia has 260,000 tons of fertilizer stranded in European ports but unable to transport, Russia has announced that the stranded fertilizer will be donated to countries in need.

At present, the United Nations has managed to ship two shipments of fertilizer, one to Kenya and one to Malawi, and later to Nigeria, South Africa and Sri Lanka.

In addition to reconnecting the Russian Agricultural Bank to SWIFT, the resumption of the Togliati-Odessa ammonia pipeline in Russia and Ukraine was Russia’s main complaint. At the end of May, news sources leaked that the union had asked Ukraine, Turkey and Russia to resume the import of Russian ammonia through the Ukrainian pipeline.

Ammonia is the crux of nitrate fertilizer, and Russia is also a major importer of ammonia worldwide. Before the conflict between Russia and Ukraine, Russia had a pipeline from Togliatti to the Ukrainian Black Sea port of Yuzhne, near Odessa. The Togliati-Odessa pipeline can carry 2.5 million tons of ammonia a year, accounting for more than half of Russia’s ammonia imports. After the beginning of the conflict between Russia and Ukraine, the Togliatti – Odessa pipeline was suspended.

In early June, however, the Russian Defense Ministry accused Ukraine of blowing up the Togliati-Odessa pipeline’s section in Kharkovo, Ukraine. Russian Foreign Minister Rampura called the attack on the Toolyatti Odessa pipeline “the last straw” for the Black Sea grain shipment agreement.

Olha Trofimtseva, Ambassador at large of Ukraine’s Foreign Ministry, also leaked that Urals Chemicals, a major Russian fertilizer supplier, is building an ammonia import terminal on Russia’s Taman Peninsula and no longer needs to import ammonia through Odessa. Trofimtseva believes that with other ammonia entry routes, Russia will “99.9 percent” back out of the Black Sea grain shipment agreement in July.

Last week, Britain’s Permanent Representative to the United Nations, Barbara Woodward, expressed similar sentiments, admitting that she had no faith in the extension of the Black Sea grain agreement. Ukrainian leader Volodymyria Zelensky also said at the NATO summit on Wednesday that the Black Sea grain shipment agreement will be “disturbed” after NATO supplies Ukraine with new weapons.

Although the prospects are not promising, Turkey, like the United Nations, has not given up lobbying. Turkish officials have repeatedly spoken to Russia about extending the grain deal, and Turkish leader Recep Tayyip Erdogan said last weekend he was trying to bully Russia into extending the deal for at least three months.

Erdogan leaked that Putin will visit Turkey in August, and the Black Sea grain agreement will be one of the focuses of discussions between the two sides.

Function number
Prior to the expiry of the Black Sea grain agreement, there had been a significant increase in the number of grain ships joining Ukrainian ports. According to the agreement, grain ships entering Ukraine’s Black Sea ports should be reviewed in the Turkish Strait to ensure that the boats do not smuggle weapons and soldiers.

In October last year, an average of 11 boats were reviewed every day. But by June this year, the daily number of review boats had plummeted to two. As more boats have been added to the Black Sea, food deliveries have declined. In October last year, 4.2 million tons of grain were transported through the Black Sea grain channel, which dropped to 2 million tons in June this year.

After the agreement to ship grain to the Black Sea was concluded, global food prices, which had been plummeting, stabilized. The Global Food Price Index, compiled by the United Nations Food and Agriculture Organization, fell 1.4 percent month-on-month in June and was down 23.4 percent from its record high in March 2022.

Since July last year, the Black Sea food channel has transported 32.81 million tons of food, of which 725,000 tons were purchased by the United Nations World Food Program to support food shipments to Ethiopia, Somalia, Yemen and other countries.

Dominique Ferretti, a senior emergency official at the World Food Programme, warned that the closure of the Black Sea grain deal would be a huge blow to East Africa, as countries that rely on Ukraine for wheat would be left without food prices. The World Food Programme is delaying stockpiling and preparing as much food as possible. If the Black Sea grain agreement is closed, the agency will be forced to explore other suppliers at higher prices.

As for the impact of the closure of the Black Sea grain agreement on the world, analysts believe that global food prices will rise in the short term, but with more food imports from other regions, the market will gradually rebalance.

The U.S. Department of Agriculture estimated this week that Russia cashed in on its wheat boom in the 2022-2023 business year, with imports reaching 45.5 million tons, a new record. In 2023-2024, Russia’s wheat imports are expected to fall further to 47.5 million tons.

Peter Meyer, head of global commodity grains analytics at S&P, thinks global wheat stocks will end up at the same level this year as 2021, with imports from Ukraine falling at the same time as Russian imports.

At the same time, Argentina and many European countries have also cashed in the wheat harvest, and imports will rise; Brazil’s corn imports will also rise, making up for the decline in Ukrainian corn imports. Meyer speculated that the end of the Black Sea grain deal would boost global grain prices in the short term, but would not cancel out the long-term effect.

Corn, wheat and soybean futures rose Wednesday at the Chicago Board of Trade. The most heavily traded December contract in the corn market fell 3.54 percent to $4.8375 a bushel. The September wheat contract traded at $6.3275 a bushel, down 4.20%. The November soybean contract traded at $13.2775 a bushel, down 2.39%.

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