The online grocery market may be losing traction with $7.9 billion in total sales for February – a 10.5% drop compared to last year, according to the latest Brick Meets Click/Mercatus Grocery Shopping Survey. Lower average order values (AOV) were the central catalyst fueling the overall downward y/y sales trends, though not all order receiving methods saw equal fates. 

📦 Delivery was the only segment to grow sales YOY, up 4.7% aided by a strong rebound in monthly active users (MAUs) versus the year prior. Comparatively, ship-to-home dropped 15.4% and pickup fell 12.8%. 

⬆️ In February, the weighted AOV across all segments dropped 10% y/y and no method was spared from the downturn: ship-to-home and pickup both fell 13% while delivery contracted by 7% versus last year. Most retailers and formats also saw lower AOVs versus last year to varying degrees – retail giant Walmart had a relatively small 2% dip in AOV for pickup and delivery orders while the supermarket format posted a steep 15% drop in AOV for pickup and delivery. 

⬇️ In spite of the spending slump, all three order receiving methods expanded their respective MAU bases. The gains were primarily driven by an increase in the share of MAUs who received orders via multiple methods throughout February as the overall user base slipped slightly, down 30 basis points (bps). 

💭 “Convenience remains one of the primary motivations for shopping online for groceries, however, for some customers, cost considerations are now weighing more heavily on their decision on how to shop. This means that the explicit costs associated with eGrocery services are more likely to impact how [they] grocery shop,” said Brick and Click partner David Bishop in the report. 

🛍️ Though the total volume of eGrocery orders was flat on a y/y basis, delivery’s strong performance (+13%) offset the order volume declines seen by pickup (-7%) and ship-to-home (-3%). According to analysts, the jump in delivery was fueled by the expansion of its MAU base to the year prior rather than an increase in order frequency. 

📊As a result of these shifts in segment order volume and the overall declines in AOV, pickup’s share of eGrocery sales contracted to 43.4% in February, falling by 468 bps. Meanwhile, delivery grew its share by 570 bps, finishing the month with 39.3% and ship-to-home ended February with 17.3% of eGrocery sales. 

🛒Perhaps the most noteworthy part of the report is that during February, the composite grocery and mass repeat intent rate for pickup and delivery slid 850 bps to 56.2%, dropping to one of the lowest levels in over two years. Analysts said the decline was driven by second- and third- time customers who were significantly less likely to use the same service again within the next 30 days. 

What does this mean for the state of eGrocery in the near term? Only time will tell.

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🥤With March Madness fully underway, Coke Zero Sugar is seeking to bring taste center court with its new fan-centric TV creative featuring two former college athletes: Jay Williams (Duke) and Aliyah Boston (South Carolina). The ad will run through the National Championship game on April 8.

🤝Meanwhile, organic sports hydration brand RECOVER180 – the brainchild of serial beverage entrepreneur Lance Collins – is seeking to clinch victory through its new partnership with Duke University Basketball guard Jared McCain. Together, they will offer the brand’s Instagram followers the chance to win March Mania giveaway prizes including a 1-year supply of RECOVER180.

🍸If you’ve been wanting to take part in the #coloredglassware trend taking TikTok by storm, Simply has you covered. The juice brand is partnering with luxury glassware brand Estelle to give away its inaugural glassware collection for free in box sets including a 52 oz. bottle of orange juice and a pair of hand-blown Champagne Coupes and Sunday Low Ball glasses (a $205 value).

Read the full roundup on BevNET

Spirits house Sazerac announced yesterday it was acquiring Southern Champion’s ready-to-drink (RTD) portfolio, including BuzzBallz for an undisclosed sum. Launched over a decade ago in 2009, BuzzBallz’s spherical cocktails are now a $1 billion business with distribution nationwide as well as in 27 countries internationally.

🤝 Along with the ball-shaped RTD brand, Sazerac will also acquire other Southern Champion brands, including Biggies, Uptown Cocktails, Sip Sip Hooray, and Texas Craft, among others.

🆙 The brand launched its malt-based RTDs last year which allowed BuzzBallz to reach new consumers in c-stores and grocery and positioned it on the heels of Jim Beam as the ninth-highest spirits company in dollar sales, according to Circana-tracked data.

🌏 BuzzBallz founder Merrilee Kick is expected to stay on as CEO through the closing of the deal as the brand hinted at utilizing Sazerac’s reach to expand its reach both domestically and internationally.

Century-old dairy producer Darigold, Inc. is heading for the Atlantic. The Seattle-based business announced today it is expanding to the East Coast for the first time and has partnered with New York DSD house Big Geyser to serve as the exclusive distributor of its single-serve flavored and white milk beverages in the New York market.

🏙️ Dan Hofmeister, president of Darigold’s business to consumer division, said in a release that the company wants to establish Darigold as “a national, consumer brand.” New York is the first stop on its way to Eastern expansion.

🥛 Big Geyser will offer Darigold’s aseptic single-serve milks, including chocolate and strawberry flavors, and is pushing the brand into New York via all channels including delis, cafes, grocery, drug and convenience.

🐢 Expansion for Darigold arrives as dairy sales have slowed. Circana reported U.S. retail dollar sales of Darigold’s refrigerated white milk business fell -3.3% to around $90.8 million in 2023, while its flavored milks dropped -14% to $32.7 million.

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Kefir maker Lifeway is celebrating its best-ever net sales quarter after posting $42.1 million for Q4, per an earnings call on Wednesday.

🏦 Net sales for 2023 increased 13.1% YOY (+$18.6 million) to $160.1 million, a record high. CEO Julie Smolyansky credited consistent volume in kefir, though the company did increase prices in late 2022.

🥛 Margin has rebounded, thanks in part to easing milk prices; in the last three quarters of 2023, the company reported a 28% gross profit margin.

Justin Herber, chief brand officer of the Keurig Dr Pepper-backed foodservice drinks brand Tractor Beverage Company, will be transitioning to a new role as founder of the Farmhand Foundation, a new philanthropic arm of the business. Brand marketer Duke Stump has been named to the chief brand officer title in his place.

🍋 Stump brings with him marketing experience from brands such as Seventh Generation, Nike and Lululemon. In a statement he said the appointment at Tractor was “a calling to leverage our platform for positive change.”

🧑‍🌾 The Farmhand Foundation will aim to support regenerative and organic farming methods.