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.