Today we speak with veteran analyst Kaumil Gajrawala, Managing Director covering Beverages, Consumer Products, and Health &amp; Wellness at Jefferies.<br>=================================Our 3 Daily Bev-Alc Trade Publications: https://beernet.com/Watch on Youtube: https://www.youtube.com/@BeerNetRadio/videosPodcast feeds - Audio: https://creators.spotify.com/pod/beernetradio=================================About Us:Beer Business Daily / Wine &amp; Spirits Daily publisher Harry Schuhmacher joins his editors and bev-alc industry guests once a week as they grok the beer and beverage business issues of the day. Like and subscribe; it&#x27;s free.-Our Three Daily Bev-Alc Trade Publications: https://beernet.com/-Twitter: @beerbizdaily#beernews #beerindustry #beer #beerbusiness

Ep. 338 Kaumil Gajrawala of Jefferies

Beernet Radio

# Full Transcript

**Podcast:** Beernet Radio

## Transcript

I have not tested all of this technology and we're going to end up using the iPhone version like we did in the pizza store. Alright, well ladies and gentlemen, welcome to another episode of Beernet Radio. I'm your host Harry Schuhmacher and we have an in-town guest, Kaumil Gajrawala with RBC Capital. Wow, people do that all the time. No, I'm not Nick Mody from RBC Capital. Oh my god, Kaumil Gajrawala from Jefferies. And do not edit that out.

This is going great. I'm so glad I came all the way to San Antonio for this. So you're here for game five and I hear you're a Knicks fan. You came to San Antonio as a Knicks fan? Are you fucking crazy though? To do a podcast with my good friend who knows me so well. So with UBS out of Switzerland. That was true for a long time. Yeah. So was Nick though. Yeah, that's true.

Well, thank you for being here, Kaumil. It's the first one in the new studio. It's not fully set up yet, but we're going to make it work. So, Kaumil, you've been doing this for 20 plus years and settle this for us. Just settle this, please. Everybody's asking, is this structural? Is this a secular decline? Or are we just living through an ugly cycle? It's a cycle. It's absolutely a cycle. Periods like this have happened many times before.

You're already seeing that we're probably towards the end of the cycle. But if you think about it, it is not strange to look back and realize that drinking, which has always been part of this major social occasion, that there was a window of time where younger people had disrupted in the normal adaptation of how they socialize and things. And you've been trapped in a house during your formative social years. You were going to have very different habits. Yeah. And that's basically where it started.

But then what magnified it is massive amounts of inflation in 2023, 2024. And that exact same demographic had the highest rates of unemployment. Right. And so we've done a bunch of work, Ed Mundy and I, and it was very clear. In fact, the number of people who cited affordability as the reason not to drink doubled from 2021. So you can see that increase and you can see that it was very cyclical. But that was then. Now we think about now. People are starting to go out more.

They're starting to look a lot more like what you would have expected the curves of adaptation to be. And maybe that's wage growth. Maybe it's unemployment is still very low. Maybe it just took some time for that adaptation, but you are starting to see it. And maybe it took time to absorb the outrageous price increases that we took during and right after COVID. Absolutely. And it's not just to absorb it, but many of them have,

if you feel maybe betrayed by some of the brands that you knew that now are a lot more expensive than they used to be. That is partially why so much of the growth is coming from entirely new to world brands. It's because you have these big price increases, ...

Ep. 338 Kaumil Gajrawala of Jefferies

Transcript

Built for investment professionals

Every day you wait, your competitors are finding
edge in conversations you're not hearing.

Ep. 338 Kaumil Gajrawala of Jefferies

Transcript

Built for investment professionals

Every day you wait, your competitors are findingedge in conversations you're not hearing.

Every day you wait, your competitors are finding
edge in conversations you're not hearing.