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>>> Antipodean dairy firms eye baby food supply to U.S. after Bubs Australia nod
Reuters
by Harish Sridharan and Rushil Dutta
May 30, 2022
https://finance.yahoo.com/news/nzs-a2-milk-seeks-supply-053231981.html
(Reuters) - Dairy companies in Australia and New Zealand are queueing to restock empty shelves in the United States with baby food, after the country recently relaxed its import policy to mitigate one of the biggest infant formula shortages in recent history.
New Zealand's dairy giants Fonterra and a2 Milk, and privately-run Australian firm Bellamy's Organic confirmed on Monday they had submitted applications to the U.S. Food and Drug Administration (FDA) for supplying baby food to the country.
This followed fellow Antipodean firm Bubs Australia inking a deal with the FDA to ship at least 1.25 million cans of its formula. Shares in a2 Milk closed more than 10% higher, while Bubs Australia shot up 40%.
"I've got more good news: 27.5 million bottles of safe infant formula manufactured by Bubs Australia are coming to the United States," President Joe Biden said in a Tweet
"We're doing everything in our power to get more formula on shelves as soon as possible."
The U.S. baby food shortage was triggered when Abbott Laboratories, the biggest U.S. supplier of powder infant formula including Similac, in February recalled dozens of products after reports of serious bacterial infections in four infants.
Abbott was on track to reopen its key baby formula plant in Michigan within one or two weeks, although FDA Commissioner Robert Califf told lawmakers a week later it would take until July before store shelves across the country were filled.
"In light of the current situation and revised FDA guidance, we have submitted an application to the FDA for approval to supply finished infant formula to parents in the U.S.," Fonterra, the world's biggest dairy producer, said in an emailed statement.
Emergency supplies from Europe arrived earlier last week after the Biden administration decided to urgently meet nationwide shortages by relaxing import rules.
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>>> 77%: That’s how much a baby formula maker’s shares surged after Biden tweeted about the company
BY JACKIE EDWARDS
BLOOMBERG
May 30, 2022
https://fortune.com/2022/05/30/biden-baby-formula-tweet-helps-bubs-australia-stock-to-77-gain/
Shares of infant formula maker Bubs Australia Ltd. soared the most in more than five years after the Sydney-based company struck a deal to ship its product to the U.S. to ease a severe shortage.
The stock surged as much as 77% in Sydney on Monday after the Food and Drug Administration said the company would provide the U.S. with at least 1.25 million cans of formula. President Joe Biden had earlier tweeted the news over the weekend, citing the equivalent volume in bottles.
The president’s tweet “should be helpful for the company’s marketing efforts, help position the brand as a safe and reliable foreign IMF manufacturer, and should be indirectly positive for sales of toddler formula,” Citigroup Inc. analysts said in a note Monday.
New Zealand formula maker A2 Milk Co. also benefited from the news, jumping as much as 13% in Wellington.
U.S. regulators have been taking steps to increase formula supplies as a shortage leaves shelves empty across the country. Bubs Australia, which has a market value of about A$420 million ($301 million), said it was working closely with the U.S. to determine how to deliver the products as quickly as possible, according to a statement.
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https://www.naturalblaze.com/2022/05/famine-is-coming-are-city-dwellers-prepared.html
$RIBT - ADM sees runway to 15% to 20% growth in nutrition
https://www.world-grain.com/articles/16934-adm-sees-runway-to-15-to-20-growth-in-nutrition
NEW YORK, NEW YORK, US — Nutrition represents approximately 15% of operating profit at ADM, but executives of the Chicago-based company have called out the platform for its potential to drive the majority of profit growth over the next several years. That potential would have been unheard of a decade ago.
“I think sometimes people don’t get is how early are we in the game of building this business (nutrition),” Juan R. Luciano, president and chief executive officer, said during a May 18 presentation during the BMO Capital Markets Global Farm to Market Conference in New York. “This is a business (that) didn’t exist in ADM in 2014, and it’s a business that is going to make, give or take, north of $800 million in operating profit this year and probably $1 billion of operating profit next year.”
The $1 billion figure is a lofty target for a business that Luciano acknowledged is still “at the early stages.”
Much of the optimism stems from the fact ADM sees a clear runway to growth of 15% to 20% over the next 5 to 10 years.
“We are significantly underrepresented from a geography perspective,” Luciano said. “We are very good in the areas that are growing the least like North America and Europe, but we are just getting started in Latin America and Asia Pacific, and basically has been a business where we have positioned ourselves very, very well in applications that are growing fast and in customers that are growing fast.”
ADM has a broad portfolio of products to contribute to nutrition, but more importantly, Mr. Luciano said, is the fact the company entered the category with a plan.
“We knew we were late to this industry,” he said. “So when we look at the industry, we said, ‘How can we differentiate ourselves?’ And our way to do that was to change the paradigm. Instead of people competing in verticals of colors and flavors and texture and some proteins, we said, ‘I don’t want to look at the business like that.’ We want to look at the $30 billion to $40 billion … in general business. And we introduced this concept of bringing systems into it. So not only (do) we have the best pantry, but we have the fastest speed to get the customer or the marketing department of a customer to a product to be launched in a few months. And that, I think, was the recipe for this accelerated growth.”
ADM steadily has expanded its presence in nutrition, beginning with human nutrition, beverages and food, and gradually adding pet and biomaterials.
Luciano said a “high proportion” of the $1.3 billion in capital that ADM plans to spend in 2022-23 is earmarked for nutrition. He stopped short of saying that the company has any plans for a major acquisition in the category over the next five years, though.
“We continue to think ourselves as organic growth and some bolt-on M&A,” he said. “I think these last 10 years of cheap money have exacerbated valuations in the nutrition space. So we try to be very targeted and very shy in terms of how much M&A we put into that. We think that those valuations may correct, and then we can flex our balance sheet.”
>>> Baby formula shortage worsens: About 40% of popular brands sold out across US
by Mike Snider
USA TODAY
May 9, 2022
The ongoing infant formula shortage isn't over yet – and appears to be getting worse.
Nearly 40% of popular baby formula brands were sold out at retailers across the U.S. during the week starting April 24, according to an analysis by Datasembly, which assessed supplies at more than 11,000 stores.
That's up from an already-high out-of-stock percentage of 31% two weeks ago, Datasembly said.
Major retailers including CVS, Target and Walgreens are limiting the amount of formula shoppers can purchase.
Walgreens continues to limit shoppers to three infant and toddler formula products per transaction, Walgreens Boots Alliance spokesman Steve Cohen said. "Due to increased demand and various supplier challenges, infant and toddler formulas are seeing constraint across the country," he said.
Baby formula powder is harder to find since Abbott Nutrition issued a recall in February for select lots of Similac, Alimentum and EleCare formulas that were manufactured at an Abbott facility in Sturgis, Michigan.
The situation is the same at CVS, which limits three baby formula products per purchase in its stores and online, according to a statement to USA TODAY from CVS Health, which owns the pharmacy chain. "We’re continuing to work with our baby formula vendors to address this issue and we regret any inconvenience this causes our customers," the statement continued.
Target is also limiting shoppers to up to four formula products at a time, the retailer told CBS News.
After recently visiting three different stores in one day last month, Elyssa Schmier, the vice president of government relations for advocacy group MomsRising,"all of a sudden realized my formula was nowhere to be found," she told USA TODAY. "It's almost a full-time job trying to find Similac."
Exacerbating the problem has been a voluntary recall
Abbott Nutrition issued in mid-February recalling select batches of Similac, Alimentum and EleCare formulas made in Sturgis, Michigan. That recall was expanded in late February to include one lot of Similac PM 60/40.
Subsequently, the Food and Drug Administration in March issued preliminary findings about the formula maker's failure to maintain sanitary conditions and procedures at that plant.
The FDA continues to investigate the situation at Abbott and is "working with Abbott on safe resumption of production at the Sturgis, Michigan facility," it says in a notice about the recall on its website.
"We are aware the recall has created new concerns about the availability of certain types of infant formula, particularly given the overall strains on supply chains experienced during the COVID-19 pandemic," the FDA said. "We will continue discussion with Abbott Nutrition and other infant formula manufacturers and consider all tools available to support the supply of infant formula products."
An Abbott spokesperson told The Wall Street Journal on Friday the company found that the formula made at that plant "is not likely the source of infection in the reported cases and that there was not an outbreak caused by products from the facility."
As it awaits the reopening of that plant, Abbott is trying to increase Similac production at its other plants and is shipping formula from Europe, the Journal reported.
Similarly, the maker of Enfamil has its factories running constantly to increase supply, the Reckitt Benckiser Group told the Journal.
The company has "ample supply" but baby formula sales in the U.S. are up 18%, which is "more than double" birth rates, Reckitt told CBS News.
Reckitt has "taken a number of measures – including shipping over 30% more product in Q1, running our factories 24/7 with 3 shifts per day, and rationalizing our portfolio to focus on those sizes that allow us to provide the most formula," the company said in a statement to USA TODAY. "We have also significantly increased our quality assurance resources to make sure our rigorous safety standards are maintained."
Where the formula shortage is worst
Baby formula shortages began to emerge near the end of November 2021 when about 11% of popular brands were out of stock, Datasembly said. Prior to that during most of 2021, supply was "relatively stable and (shortages) fluctuated between 2%-8%," the research firm said in its most recent report.
The recalls, supply chain shortages and inflation have affected the baby formula supply, said Datasembly CEO and founder Ben Reich in the report.
“Unfortunately, baby formula out-of-stock levels have continued to soar since the beginning of April, and we see no indication of a slow down," he said. Baby formula continues "demonstrating higher out-of-stock levels than other categories," Reich said/in an email exchange with USA TODAY.
Shortages are even worse in some states and cities.
Six states – Tennessee, Texas, Missouri, Iowa, South Dakota and North Dakota – faced supply shortages higher than 50% the week starting April 24, Datasembly said. The metro area with the highest out-of-supply rate was San Antonio, with 57%, followed by Memphis & Nashville (52%), and Des Moines & Houston (50%).
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>>> Food Processing Plants Burning Across U.S., Threatening Meat Supply
2-23-22
American Faith
https://americanfaith.com/food-processing-plants-burning-across-u-s-threatening-meat-supply/
There has been an outbreak of fires in food processing facilities across the nation in the last six months as food prices soar and supply chains are stressed to their limits.
The fires began showing up regularly in the news after a fire closed a Tyson Foods meat processing plant in Kansas. The location was a primary beef processing location for the company and the U.S. supply chain, providing about 6% of U.S. beef.
After the fire, analysts began speculating that the impact could drive up market prices for meat nationwide. Dan Norcini, part of the beef and poultry trading markets, said the cattle market would likely “respond negatively” to news of the fire. He said the long-term impact would depend on how long the plant stays closed.
Just days later, in August of 2021, the Patak Meat Processing facility burned near Atlanta. The media took notice because the family-owned business is beloved in its community locally, and its products are purchased nationwide.
The fire in Georgia barely had a minor impact on the food supply chain nationwide. But, in September, a fire at JBS USA, a meat processing facility in Nebraska, threatened the meat supply for the entire nation profoundly. The plant reportedly processes about 5% of the nation’s beef, and closure would directly impact the supply chain.
The trend has continued repeatedly through the end of 2021 and into 2022.
In February, Shearer’s Food Processing Plant in Hermiston, Oregon, burned down, leaving two employees injured. On April 13, Taylor Farms Food Processing Plant in Salinas, California, burned and prompted evacuations. On April 19, the Headquarters of Azure Standard Food Processing Plant in Dufur, Oregon, also burned.
People are beginning to notice because the fires are threatening an already stressed supply chain of food in the U.S.
The trend continues: on March 16, a massive fire wiped out much of a Walmart fulfillment center in Plainfield, Indiana. The event was severe enough to warrant the ATF to investigate.
Another incident occurred on April 11, at New Hampshire’s East Conway Beef and Pork, when a fire so large broke out that it took respondents 16 hours to extinguish.
At least 16 such disasters have taken place at food processing facilities nationwide. While most of the incidents have shown no foul play after investigation, the trend presents a curious string of events across the country.
It remains to be seen what the direct impact will be. Still, as the nation continues to face soaring food prices and trouble with supply chain operations, there could be a significant impact on the cost and availability of food for Americans.
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Coca Cola - >>> 3 Strong Warren Buffett Stocks for a Volatile Market
Motley Fool
By Chuck Saletta, Barbara Eisner Bayer, and Eric Volkman -
Mar 13, 2022
https://www.fool.com/investing/2022/03/13/3-strong-warren-buffett-stocks-volatile-market/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
KEY POINTS
When there's inflation, a company that gets a percentage of lots of purchases makes a ton of sense.
One Buffett pick is a timeless beverage giant that has already shown its ability to hold up well in this crazy market.
If you can't pick from among them, why not buy every Buffett investment by buying a single security?
Businesses that are built to last can be a great way to ride out tough times for stocks.
Warren Buffett is well known as one of the world's all-time great investors. He made his fortune as a value-focused investor -- someone who looks to buy stocks when they're cheap and profit as they recover. As the recent market downtrend reminds us, that's often easier said than done, as falling stocks tend to make it feel like your money is evaporating with every down day.
Still, if Buffett's success shows us anything, it's that a strong company that survives a down market can often come out the other side in a much better spot to deliver solid long-term returns for its shareholders. With that in mind, we asked three successful investors to pick strong Warren Buffett stocks that are worth considering in today's volatile market. They picked Coca-Cola ( KO -0.03% ), Visa ( V -1.03% ), and Berkshire Hathaway ( BRK.A -0.27% )( BRK.B -0.31% ). Read on to find out why and decide for yourself whether those companies deserve a spot in your portfolio.
Volatility goes better with Coke
Barbara Eisner Bayer (Coca-Cola): If anyone knows how to make money in all markets, including volatile ones, it's Buffett, the famous nonagenarian who has an approximate net worth of $114 billion. And one of the Oracle of Omaha's favorite stocks is his oldest stock position, which he started purchasing 34 years ago -- The Coca-Cola Company.
Buffett is so in love with the company that he's known to consume five cans of Coke each day. He even joked to Fortune magazine back in 2015 that his body is made up of "one-quarter Coca-Cola." It's no surprise, then, that Berkshire Hathaway owns about $22 billion worth of its shares, or 10% of the company.
It's great that Buffett is so fond of Coke, but that in and of itself doesn't make it a great buy for a volatile market. So let's look at what does.
First, Coca-Cola's products are consumed worldwide and embrace more than its fizzy namesake drink. Its portfolio of beverages has expanded to include changing and healthier tastes, and according to the company, includes "200 brands and thousands of beverages around the world from soft drinks and waters, to coffee and tea." You've probably heard of many of them: Dasani, Fairlife, Fanta, Fuze Tea, Schweppes, Powerade, Smart Water, and Minute Maid. Because these drinks are worldwide staples, people aren't going to stop drinking them when the stock market goes on a wild ride.
The company has survived extreme volatility in the past. Back in October 2018, during an extremely turbulent period, Coca-Cola was up 2% while the S&P 500 was down 9%. This happened because the company was and continues to be a huge, stable conglomerate with a solid dividend and continuing growth prospects.
While the company struggled during the coronavirus pandemic, it has finally returned to growth. During its recent fourth-quarter 2021 earnings report, Coca-Cola said net revenue had grown 10% year over year and earnings per share (EPS) were up 65% per share. And management sees brighter days ahead: 2022 revenue growth of 7.5% and EPS growth of 9% are numbers investors can get excited about for such a stable company.
But the cherry on top of these reasons why Coca-Cola is a great Buffett stock to own during volatile times is its dividend, which currently offers investors a 3% dividend yield. Coca-Cola is also a Dividend Aristocrat and has been raising its payout for 59 years in a row. If stocks start plummeting, investors will still be earning income from the dividend, which is vital when all you're seeing is red every day in your portfolio.
If Buffett put down his bottle of Coke and spoke directly to you, he might just say that Coca-Cola -- with its stable business, continuing growth prospects, and mighty fine dividend -- may be the perfect stock to survive and even thrive through volatile times.
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Coca Cola - >>> Thirsty for Solid Shares With Good Prospects? It’s Time to Try Coca-Cola Stock.
Barron's
March 11, 2022
https://www.barrons.com/articles/thirsty-for-solid-shares-with-good-prospects-time-to-try-coca-cola-stock-51647048438?siteid=yhoof2
Coca-Cola is doing a solid job reinvigorating its core carbonated soda business, with new sugar-free offerings and smaller can sizes. It is a highly innovative company that is improving and expanding its offerings in energy and sports drinks. Coke continues to increase the number of markets for its smaller, faster-growing brands (e.g., Costa Coffee), while also looking for acquisition opportunities. It has a strong management team and an admirable long-term strategy. It is simplifying its internal operations, focusing more on digital marketing and big data, and has recently eliminated many small, slow-growing brands. This should help sales and profits. Coke has a strong presence in growing emerging markets, such as China. As people in emerging markets enter the middle class, they often spend more on prepackaged beverages. Coke does have a tax dispute with the IRS that could be material, but the outcome remains uncertain. Coke had less than 2% of its sales from Russia last year, but that does not change our outlook. [The company has suspended its operations there, in light of the Russian invasion of Ukraine.]
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>>> Neogen, 3M announce blockbuster merger to create ‘global leader’ in food safety
MiBiz
BY MARK SANCHEZ
December 15, 2021
https://mibiz.com/sections/manufacturing/neogen-3m-announce-blockbuster-merger-to-create-global-leader-in-food-safety
Lansing-based food and animal safety products manufacturer Neogen Corp. plans to combine with conglomerate 3M’s food safety business.
The two companies say they signed a definitive agreement for a deal to create a new global food safety and security company valued at $9.3 billion. Shareholders at Neogen (Nasdaq: NEOG) would hold about 49.9 percent of the combined company. Shareholders 3M (NYSE: MMM), which is spinning off its food safety business, would get approximately 50.1 percent.
The deal could close by the end of the third quarter in 2022, pending approval by regulators and Neogen shareholders.
Neogen President and CEO John Adent and the company’s existing management team would run the combined company, which would retain a global headquarters in Lansing “with a strong local presence,” he said. The combined company would have revenues approaching $1 billion with $300 million in adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization).
The combined company would put Neogen “at the forefront of the new era in food security with the resources, capabilities and solutions to be a global food security provider,” Adent said in a Tuesday conference call with brokerage analysts to discuss the deal.
“At a time where we’re seeing robust growth trends in sustainability, food security and the heightened focus on supply chain integrity, we are right there in the center, ensuring the global food supply remains safe and robust,” he said. “This combination will help us do an even better job to capitalize on these long-term tailwinds, creating a global leader in food security and establishing a platform from which we are well positioned to accelerate growth and drive significant additional value for customers, employees and shareholders.”
Both Neogen and 3M “serve large, attractive and growing categories,” Adent said.
The food safety market has a value of $18 billion to $25 billion with a long-term growth rate of 6 percent to 8 percent, he said. The animal safety market has a value of $50 billion to $60 billion with a long-term growth rate between 4 percent and 6 percent, Adent told analysts.
Centerview Partners LLC serves as financial adviser and Weil, Gotshal & Manges LLP as legal counsel to Neogen. Goldman Sachs & Co. LLC serves as financial adviser and Wachtell, Lipton, Rosen & Katz as legal counsel to 3M. Goldman Sachs Bank USA and JP Morgan Securities will provide committed financing for the transaction.
“Neogen and 3M share a deep commitment to quality, innovation and customer satisfaction and long histories of industry leadership,” 3M Chairman and CEO Mike Roman said in a statement. “By combining our Food Safety business with Neogen, we will create an organization well positioned to capture long-term profitable growth. This transaction further evolves our strategy, focuses our health care business and benefits our stakeholders, as we actively manage our portfolio to drive growth and deliver shareholder value.”
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Coca Cola - >>> 5 Dividend Paying Consumer Defensive Stocks
Insider Monkey
April 4, 2022
by HAMNA ASIM
https://www.insidermonkey.com/blog/5-dividend-paying-consumer-defensive-stocks-1036343/3/
The Coca-Cola Company (NYSE:KO)
Dividend Yield as of April 1: 2.80%
Number of Hedge Fund Holders: 70
The Coca-Cola Company (NYSE:KO), a multinational beverage corporation, is one of the most notable dividend paying consumer defensive stocks. The Coca-Cola Company (NYSE:KO) is a significant dividend king, with 60 years of consecutive dividend increases under its belt.
On February 17, The Coca-Cola Company (NYSE:KO) declared a $0.44 per share quarterly dividend, a 4.8% increase from its prior dividend of $0.42. The dividend was distributed on April 1, to shareholders of the company as of March 15. The stock delivers a yield of 2.80% as of April 1.
Guggenheim analyst Laurent Grandet on April 1 raised the price target on The Coca-Cola Company (NYSE:KO) to $68 from $67 and kept a Buy rating on the shares. The analyst made the bull case for The Coca-Cola Company (NYSE:KO) given its plan to acquire Monster Beverage Corporation (NASDAQ:MNST), as its valuation is now approaching an all-time low.
Among the hedge funds tracked by Insider Monkey, 70 funds were bullish on The Coca-Cola Company (NYSE:KO), compared to 61 funds in the prior quarter. Warren Buffett’s Berkshire Hathaway is the biggest shareholder of the company, owning 400 million shares worth $23.6 billion.
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>>> Performance Food Group Company (PFGC), through its subsidiaries, markets and distributes food and food-related products in the United States. It operates through two segments, Foodservice and Vistar. The company offers a range of frozen foods, groceries, candy, snacks, beverages, cigarettes, and other tobacco products, as well as beef, pork, poultry, and seafood. It also sells disposables, cleaning and kitchen supplies, and related products. In addition, the company offers value-added services, such as product selection and procurement, menu development, and operational strategy. It serves independent and chain restaurants, schools, business and industry locations, hospitals, vending distributors, office coffee service distributors, retailers, theaters, convenience stores, theaters, hospitality providers, concessionaires, airport gift shops, and college book stores, as well as franchises and other institutional customers. The company markets and distributes approximately 250,000 food and food-related products from 107 distribution centers to approximately 250,000 customer locations. Performance Food Group Company was founded in 1885 and is headquartered in Richmond, Virginia.
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Weekender: Nearly 80% of food and beverage companies have passed on higher costs to customers, survey finds
https://mail.google.com/mail/u/0/#inbox/FMfcgzGmvTzffnSxBGSQWPSDKggQzTld
Lancaster Colony - >>> Check Out This Dividend King You've Probably Never Heard Of
Motley Fool
By Justin Pope
Mar 17, 2022
https://www.fool.com/investing/2022/03/17/check-out-this-dividend-king-youve-probably-never/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
KEY POINTS
Lancaster Colony sells niche food products with strong brands.
The company's strong finances power ongoing dividend growth.
The stock is a bit expensive today but poised for continued success.
Let's take a trip to the grocery store to find this underrated dividend gem.
Consumer staple companies make great dividend stocks because people buy things like food and beverages regardless of the economy. Food conglomerate Lancaster Colony may not have the name recognition of a company like Coca-Cola. Still, it's been growing its payout for the same 59 years that Coca-Cola has!
What's more, Lancaster Colony has handily delivered better investment returns than Coca-Cola over the past decade, so it's time to get to know this little-known Dividend King. Here's why investors should consider Lancaster Colony for their long-term portfolio.
About Lancaster Colony
Lancaster Colony produces and sells various food products, including frozen bread, refrigerated dips, dressings, sauces, and croutons. Some popular brands include New York Bakery, Flatout, and Marzetti. The company also produces sauces under licensing deals with brands like Buffalo Wild Wings, Olive Garden, and Chick-Fil-A.
The company specializes in niche food product categories, maintaining strong brand positioning with less competition from generic brands. Frozen bread, for example, commands freezer space in a grocery store, which is premium real estate. It's usually easier to develop additional shelf space in an aisle than to install more freezers in a store.
Approximately 64% of Lancaster Colony's sales are products requiring climate control, and its licensed products in the shelf-stable side of the business carry significant brand power of their own. Most people probably want the actual Olive Garden salad dressing instead of a generic one.
Superb fundamentals drive dividend growth
The differentiated products that Lancaster Colony sells help protect its "turf" within sales channels, but the company certainly isn't a hyper-growth company. Its revenue has risen an average of 3% annually over the past decade.
However, management runs a very tight ship financially, which has helped the company maximize its resources. Lancaster Colony holds no debt, giving it flexibility with every dollar of profit it generates.
This includes acquisitions of new brands to drive growth; Lancaster Colony has acquired many of its top brands over the years, including:
New York Bakery in 1978
Reames in 1989
Chatham Village in 1997
Sister Schubert's in 2000
Warren Frozen Foods in 2003
Flatout in 2015
Bantam Bagels in 2018
Omni Baking Company in 2021
It seems clear from the long time frame and years between deals that management isn't ever in a hurry, waiting instead for the right deal to come together. Management that doesn't put the balance sheet in danger to boost short-term growth numbers is an underrated trait in a company.
After investing in its factories and equipment, the dividend is the company's most prominent use of cash and the primary vehicle for delivering profits back to investors. In addition to raising the payout for 59 years, Lancaster Colony also issues a special dividend on occasion, the last one coming in 2015.
The regular dividend yields 2%, so investors probably have better options if they're looking for more income. Still, all those annual raises and the occasional special payout add up over a multi-year holding period.
Is Lancaster Colony a buy today?
It might be fair to call Lancaster Colony a "boring" company, but that isn't bad. It's poised to continue doing what it's been doing for decades. The balance sheet is still debt-free, and management has $114 million in cash to use as it pleases, so more acquisitions will likely occur at some point.
Furthermore, growth has picked up in recent years; revenue has grown more than 6% annually over the past three years, so investors will want to see how that continues moving forward.
The stock's one major problem is its valuation, which currently stands at a price-to-earnings (P/E) ratio of 34, a hefty amount for a company that grows at the pace that Lancaster Colony does.
The market's current sentiment toward growth stocks may push investors toward more defensive companies like Lancaster Colony. Still, it's hard to call the stock a "table-pounding" buy when the valuation probably needs to continue cooling off for a while longer.
Still, Lancaster Colony is a simple yet effective business with a multi-decade track record of success. If investors get the opportunity to buy shares at a more reasonable valuation, it could prove to be a long-term winner in any dividend portfolio. For now, the stock may be best as a name on your watchlist.
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Monster Energy enters alcohol with $330M purchase of Canarchy Craft Brewery
https://www.fooddive.com/news/monster-energy-enters-alcohol-with-330m-purchase-of-canarchy-craft-brewery/617118/
Dive Brief:
Monster Beverage will acquire Canarchy Craft Brewery Collective, a craft beer and hard seltzer company, for $330 million in cash, the company said in a statement. The energy drink maker said the deal will provide Monster with a "springboard" to enter the alcoholic beverage space.
The transaction is expected to close before April. Canarchy will function independently, retaining its own organizational structure and team, led by its current CEO Tony Short.
The decision by Monster to enter beer and hard seltzer comes as more nonalcoholic beverage companies enter the category in an effort to cover more drinking occasions and spur growth.
Dive Insight:
Monster rose to prominence to become a dominant player in the energy drink space, but now the $50 billion beverage giant is hoping to replicate its success in alcohol.
"This transaction provides us with a springboard from which to enter the alcoholic beverage sector,” said Hilton Schlosberg, Monster’s vice chairman and co-CEO. “The acquisition will provide us with a fully in-place infrastructure, including people, distribution and licenses, along with alcoholic beverage development expertise and manufacturing capabilities in this industry.”
The transaction will immediately bring beer and hard seltzer from brands including Cigar City, Oskar Blues, Deep Ellum, Perrin Brewing, Squatters and Wasatch to the Monster beverage portfolio. The transaction does not include Canarchy’s stand-alone restaurants.
The deal comes at a time when Monster itself has been rumored as an acquisition target.
In November, Bloomberg reported Monster Beverage was exploring a deal with Modelo and Corona brewer Constellation Brands. Today's decision to spend more than $300 million to buy Canarchy doesn't necessarily preclude such a deal from happening. But the fact that Monster is buying a company on its own, and choosing to do it in alcohol, may mean any combination with Constellation is dead, at least for the foreseeable future. Monster has found its own way to enter alcohol and stay independent at the same time.
For years, Wall Street has speculated Coca-Cola could buy Monster. The beverage giant purchased a 16.7% stake in Monster in 2015 and agreed to distribute its energy drinks in the U.S. and Canada. Monster noted the Canarchy deal comes with all the infrastructure and necessary licenses, so it appears unlikely that Coke would handle alcohol for Monster.
Canarchy is an interesting move for Monster because it is entering alcohol through craft beer and hard seltzer, a pair of maturing yet popular categories where consumers have countless options to chose from. While at one point there was speculation that Monster would develop its own hard seltzer, the company obviously sees a better path forward in alcohol through purchasing existing brands where it can benefit from their expertise rather than venturing into the area on its own, even with the potential to use the name recognition of its signature energy drink.
It's possible Monster could somehow tap into the expertise of Oskar Blues' work in hard seltzer, for example, and bring that insight to its own energy drinks. The deal also could mark the first step by Monster to become an even bigger player in alcohol, putting it head-to-head with industry giants AB InBev and Molson Coors.
Monster has been exploring other avenues for growth in recent years. It released the first 100% vegan energy drink called Java Monster Farmer's Oats in 2019 that is made with oat milk, coffee and Monster's energy blend that contains taurine, ginseng and guarana. It also reportedly has been considering a move into cannabis. But Canarchy is its biggest bet yet to show it's more than just an energy drinks company.
Monster is the latest nonalcoholic beverage company to enter alcohol, although others have done so through partnership deals in an effort to generate growth at their businesses.
Coca-Cola teamed up with Molson Coors to create Topo Chico Hard Seltzer, and last week said it is working Constellation to launch ready-to-drink cocktails through its Fresca brand. PepsiCo and Sam Adams maker Boston Beer followed last summer with plans to launch a hard offering under the Mtn Dew brand, expected to reach shelves in the next few months.
Clif Bar launches incubator to pursue disruptive innovation
Sad, I don't see a stock for Clif
https://www.fooddive.com/news/clif-bar-launches-incubator-to-pursue-disruptive-innovation/611454/
Dive Brief:
Clif Bar & Co. launched the Trailblazers Incubator, a new in-house group that focuses on innovating to develop new growth avenues for the better-for-you food company. The incubator will be overseen by Clif Bar Chief Innovation Officer Rizal Hamdallah and led by Senior Director Greg Lok.
Its first venture, a line of plant-based, clean-label jerky for dogs set to launch nationally in early 2022, will form the basis of a Clif Pet portfolio of products. The incubator will also build a pipeline of products for humans, including "completely disruptive" snacks set to launch soon, Hamdallah told Food Navigator.
Growth is a key focus for Clif Bar CEO Sally Grimes, who announced plans to double the company’s sales to $2 billion and expand its "fit for movement" portfolio after she stepped into the role in June 2020.
Dive Insight:
In 1992, Clif Bar was a startup seeking to overturn the norms of the energy bar category with its clean-label oat bars that prioritized organic ingredients. Since then, the company's explosive growth story has taken it into new segments, including granola and low-sugar cereal, and snacks like low-calorie Clif Thins and savory Pop’n Crunch Clusters.
All the while, it's been attempting to stay a few steps ahead of its competition, which has dramatically multiplied to include Big Food CPGs hungry to cash in on the better-for-you trend as well as countless startups. The launch of the Trailblazers Incubator to speed up new concepts — and a push into a completely new product category — may be indicators of the pace of the company's planned innovation in 2022.
“Just as Clif Bar was founded on disrupting the energy bar category nearly 30 years ago, the Trailblazers Incubator is built to consistently deliver our bold innovation agenda and accelerate our growth plan,” Hamdallah said in a statement. “In addition to a rapid, data-driven product development and go-to-market strategy, what makes our approach different is extending the loyalty of the Clif brand. By introducing Clif Pet, we will bring energy to the whole family.”
Pet food has been targeted as a growth area for several food CPGs in recent years, driven by the explosion in consumer spending on companion animals. The trend only accelerated during the pandemic. The growing category has triggered massive M&A deals, punctuated by General Mills' $8 billion purchase of Blue Buffalo Pet Products in 2018. Mars, which is the parent company of Clif Bar competitor Kind North America, owns several pet brands, including Pedigree and Royal Canin.
But perhaps more intriguing is what Clif Bar could focus on after pet snacks, applying the incubator model to unchartered human food categories. The company's announcement was light on details, although in his interview with FoodNavigator, Hamdallah said Clif Bar was open to partnering with other companies on new products.
Incubators have been a trend in the food industry for the past several years, making Clif Bar somewhat late to the game. However, the model has largely been the terrain of Big Food CPGs such as Kraft Heinz, General Mills, Chobani and Nestlé. These larger companies are all seeking to trigger and fast-track innovation, while being pressured by the same competitive and consumer forces.
>>> Hain Celestial Announces the Closing of Secondary Offering of Common Stock by Selling Stockholders and Concurrent Share Repurchase
Yahoo Finance
November 15, 2021
https://finance.yahoo.com/news/hain-celestial-announces-closing-secondary-210500787.html
LAKE SUCCESS, N.Y., Nov. 15, 2021 /PRNewswire/ -- The Hain Celestial Group, Inc. (Nasdaq: HAIN) ("Hain Celestial," "Hain" or the "Company"), today announced the closing of an underwritten secondary offering, pursuant to which certain affiliates of Engaged Capital, LLC (the "Selling Stockholders") that had existing ownership interests in Hain sold 12,379,504 shares of Hain common stock. The shares were offered at a price to the public of $45.50 per share. The Selling Stockholders received all of the net proceeds from the offering. Hain did not sell any shares of common stock in the offering.
Concurrently with the completion of the offering, the Company repurchased directly from the Selling Stockholders 1,700,000 shares of common stock. The price per share paid by the Company equaled the price at which the underwriter purchased the shares from the Selling Shareholders in the offering, net of underwriting discounts and commissions, which was $45.00 per share. The Company funded the share repurchase with borrowings under its revolving credit facility.
Morgan Stanley acted as the sole underwriter for the offering.
The Selling Stockholders are co-investment funds managed by Engaged Capital, LLC ("Engaged Capital") that are mandatorily winding down pursuant to their terms. Engaged Capital and its affiliates continue to hold 1,900,792 shares of Hain common stock following the closing of the offering and the repurchase. Glenn W. Welling, the Founder and Chief Investment Officer of Engaged Capital, continues to serve as a director of the Company after the offering.
Mark L. Schiller, Hain Celestial's President and Chief Executive Officer, stated, "We would like to thank Glenn and Engaged Capital for their input and collaboration over the past several years, and we are delighted that our relationship with Engaged Capital and Glenn's contributions as a director will continue. We remain focused on our Hain 3.0 plan to build a global healthy food and beverage company with industry-leading top line growth as we continue to create shareholder value."
The offering was made pursuant to an effective shelf registration statement (including a prospectus) and a prospectus supplement relating to the offering filed by Hain with the Securities and Exchange Commission ("SEC"). You may obtain a copy of the prospectus supplement, the prospectus included in the registration statement and the documents incorporated by reference therein, when available, for free by visiting EDGAR on the SEC website at www.sec.gov. Copies of the prospectus supplement for this offering may also be obtained by contacting Morgan Stanley & Co. LLC, Attention: Prospectus Department, 180 Varick Street, 2nd Floor, New York, New York 10014.
This press release does not constitute an offer to sell or a solicitation of an offer to buy any securities, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such state or jurisdiction.
About The Hain Celestial Group, Inc.
The Hain Celestial Group (Nasdaq: HAIN), headquartered in Lake Success, NY, is a leading organic and natural products company with operations in North America, Europe, Asia and the Middle East. Hain Celestial participates in many natural categories with well-known brands that include Celestial Seasonings®, Clarks™, Cully & Sully®, Earth's Best®, Ella's Kitchen®, Frank Cooper's®, Gale's®, Garden of Eatin'®, Hain Pure Foods®, Hartley's®, Health Valley®, Imagine®, Joya®, Lima®, Linda McCartney's® (under license), MaraNatha®, Natumi®, New Covent Garden Soup Co.®, Robertson's®, Rose's® (under license), Sensible Portions®, Spectrum®, Sun-Pat®, Terra®, The Greek Gods®, Yorkshire Provender® and Yves Veggie Cuisine®. The Company's personal care products are marketed under the Alba Botanica®, Avalon Organics®, JASON®, Live Clean® and Queen Helene® brands.
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Pepsi: Cracker Jack soda
Leftovers: PepsiCo goes for a home run with Cracker Jack soda; Country Archer enlists world's hottest chili pepper for jerky
https://www.fooddive.com/news/leftovers-pepsico-goes-for-a-home-run-with-cracker-jack-soda-country-arch/608298/?utm_source=Sailthru&utm_medium=email&utm_campaign=Issue:%202021-10-15%20Food%20Dive%20Newsletter%20%5Bissue:37394%5D&utm_term=Food%20Dive
The CPG giant pops in caramel and peanut flavors to its classic beverage, while Sonic takes its drink flavors beyond the restaurant's drive-in parking lots.
PepsiCo swings for the fences with Cracker Jack soda
With baseball playoffs underway, PepsiCo is stepping up to the plate to give fans a new way to enjoy its soda and the popular snack synonymous with the nation’s pastime — at the same time.
Pepsi x Cracker Jack is a new soda flavor that combines the popular cola with the nostalgic blend of caramel, popcorn and peanut flavors. In addition to the drink, the offering includes a Cracker Jack-style prize. Each 12-ounce can will have one of four original peel-off temporary tattoos — an ode to classic Cracker Jack prizes.
Unlike the signature cola or PepsiCo’s other sodas like Mtn Dew or Sierra Mist, the Cracker Jack beverage won’t be sold in stores. To receive one of the 2,000 cans, fans need to upload a video on Twitter or TikTok of them singing the classic tune "Take Me Out to the Ball Game."
The song, sung in the 7th inning of baseball games, includes a line where a fan is hopeful to “buy me some peanuts and Cracker Jack.”
“Pepsi is a brand with a deep legacy in sports and is an endemic part of the ballpark experience, so we thought it would only be fitting to help fans celebrate the biggest month in baseball with our latest limited-edition drop - Pepsi x Cracker Jack," Todd Kaplan, Pepsi’s vice president of marketing, said in a statement.
Pepsi x Cracker Jack is the latest limited edition offering from the soda giant. Ahead of Easter, the company unveiled Pepsi x Peeps that combined the taste of Pepsi with the flavor of Peeps. And last fall, the New York beverage and snack company gave away 1,500 two-liter bottles of Pepsi Apple Pie. The company said the soda, which had "hints of warm cinnamon, buttery crust, and fresh apple," was given to consumers who shared a photo or video of a baking fail.
The specialty flavors mirror a similar strategy used by other companies, including Mondelez International and its Oreo brand. The snacking giant has created dozens of different flavors of its classic sandwich cookie, including Jelly Donut, Watermelon, Coconut Apple, Key Lime Pie and Gingerbread.
With younger individuals craving new, distinctive flavors and spending more of their time on social media, the offerings from companies such as PepsiCo and Mondelez are made for sharing and creating an instant online buzz. For CPGs aiming to score in an otherwise crowded marketplace, these product launches could be a home run with consumers.
Country Archer wants jerky fans to love — not fear — Death Reaper
If the warning label with a skull and crossbones doesn’t fully communicate the spice threat of Country Archer’s Death Reaper jerky, then the glove included to handle the meat snack should do it.
The limited-edition jerky is seasoned with Carolina Reaper Chilis, said to be the hottest pepper in the world, according to the Guinness Book of World Records. For some perspective, the Carolina Reaper Chili can measure at up to 2 million Scoville heat units. This would make it 200 times hotter than a jalapeno, and twice as hot as the ghost pepper, one of the most popular super-hot chilies flavoring foods today.
The other details of Death Reaper jerky literally burn up in the heat. Each 1-ounce bag contains grass-fed and finished beef, with no soy, preservatives, MSG, or nitrates or nitrites. Country Archer is selling the meat snack on its website for $5.99, while supplies last.
There is also a Death Reaper Challenge, where brave consumers are encouraged to record themselves eating an entire serving — without the relief of a beverage or food — and posting it on social media. There’s no reward, other than achieving an immortality of sorts with other sweaty, grimacing, regretful souls.
Spice eating challenges have been a creative way in recent years for snack brands to drum up excitement — and free publicity. Amplify Snacks is a pioneer of the trend; in 2016, it debuted the One-Chip Challenge for its Paqui brand tortilla chips, with a special variety flavored by Carolina Reaper and scorpion peppers. The stunt proved so successful that Amplify has repeated the challenge each year with a new, limited edition chip packaged in a cardboard coffin-shaped box.
There are also several eating challenges on YouTube, including one that encourages mass consumption of Barcel USA’s Takis super spicy rolled tortilla chips.
Jerky has been on a sales tear in recent years, driven by the popularity of artisanal and premium brands. Country Archer, which prioritizes grass-fed beef, antibiotic-free pork and a clean label, already is on the right side of the trend. By tapping into spice — and social media challenges — it is also lassoing Gen Z and millennials’ love of heat, trying to ensure that Death Reaper is not dead on arrival.
Sonic mixes it up with singles-to-go drink packets
They won’t deliver them to you on roller skates, but Sonic is aiming to bring its drink flavors beyond its drive-in parking lots.
The restaurant chain has announced Sonic Drink Mix Singles-To-Go, which can be mixed into water to achieve the flavor of select drinks from its menu. They are being produced with Chicago company Jel Sert, known for producing Flavor Aid drink mixes and Fla-Vor-Ice frozen pops.
The flavor packets will come in three flavors based on some of Sonic’s most popular options: Cherry Limeade, Ocean Water and Strawberry Lemonade. In its announcement, Sonic touts the drinks’ better-for-you benefits like being zero sugar and low calorie, and recommends mixing them into a standard 16.9-ounce water bottle.
The flavor packets will be rolled out this fall at Texas grocery chain HEB and select Walmart stores, followed by all Dollar General stores in February.
Sonic has debuted other retail products under its branding with Jel Sert. There’s gelatin and frozen slush bars with the Ocean Water and Cherry Limeade flavors, along with instant pudding with the same flavors as its milkshakes: chocolate, vanilla, strawberry, and banana.
The drive-in chain is not the first restaurant to roll out retail-modified versions of some of its most popular products. Consumers familiar with menu items often then want to pick them off of shelves. TGI Fridays frozen appetizers, such as potato skins and mozzarella sticks, have been a significant hit for Kraft Heinz. Conagra has similarly found success with frozen options from PF Chang’s after a period of Unilever struggling to.
— Chris Casey
Coca-Cola and PepsiCo wade into booze amid an uncertain future
https://www.fooddive.com/news/coca-cola-and-pepsico-wade-into-booze-amid-an-uncertain-future/606490/?utm_source=Sailthru&utm_medium=email&utm_campaign=Issue:%202021-10-14%20Food%20Dive%20Newsletter%20%5Bissue:37364%5D&utm_term=Food%20Dive
After making their long-awaited debuts in alcohol, Coca-Cola and PepsiCo are pausing to learn more about the category before deciding whether to make it a bigger part of their multibillion-dollar beverage empires.
Coca-Cola and Molson Coors first teamed up in 2020 to create Topo Chico Hard Seltzer, which hit U.S. shelves earlier this year in nine states. After a promising launch, Molson Coors announced it would roll out the beverage nationwide in 2022. PepsiCo and Sam Adams maker Boston Beer followed this summer with plans to launch a hard offering under the Mtn Dew brand expected to reach shelves early next year.
Coca-Cola, whose portfolio includes Sprite, Fairlife milk and Honest Tea, is assessing the alcohol category before determining whether to expand its presence, CEO James Quincey said during the company's second-quarter earnings call in July. "We want to learn and understand more before we decide anything one direction or the other," he said.
Beverage companies have been moving aggressively to expand their portfolios in recent years to include teas, sports and energy drinks and sparkling waters as consumers look for more choice while curtailing their consumption of sugar-laden liquids. John Boylan, a senior equity analyst with Edward Jones, said alcohol adds yet another option depending on the occasion or a consumer's beverage preference at the time.
"We don't really think that [PepsiCo and Coca-Cola] are going to morph into full-blown alcohol companies. I think this is out of their bailiwick, but we do think that they'll look at areas where it makes sense," Boylan said. "They're just looking for any avenue where they can put a beverage in front of the consumer."
Alcohol represents a lucrative opportunity for nonalcohol companies whose own industry lacks meaningful growth on a scale large enough to impact the bottom line, said Nathan Greene, an analyst at Beverage Marketing Corporation.
"There's plenty of products hitting the market. In fact, there's all-time high levels of innovation, but the Coke and Pepsi ballpark scale — what they're looking for, what they call success — it's fairly limited right now," he said. "Alcohol represents the greatest margin generation opportunity, even if it is with a partner, compared to various nonalcoholic products."
A major reason the soda giants have chosen to partner is because of the complicated three-tier distribution system enacted in 1933 to prevent any one player from dominating the industry like gangsters had during Prohibition. Federal law says alcohol producers can only sell their product to state-licensed wholesalers. The distributors in turn sell the alcohol products to state-licensed stores where consumers can then purchase it.
For alcohol makers like Molson Coors, AB InBev and Boston Beer, their decades of experience navigating the convoluted system has proven useful in attracting new partners to the space. It's also provided them with opportunities to add to their portfolio a potentially lucrative brand with instant market recognition and minimal upfront investment.
"We don't really think that [PepsiCo and Coca-Cola] are going to morph into full-blown alcohol companies. I think this is out of their bailiwick, but we do think that they'll look at in in areas where it makes sense. They're just looking for any avenue where they can put a beverage in front of the consumer."
John Boylan
Senior equity analyst, Edward Jones
Quincey noted that unlike soda, tea, juice, water or coffee, where Coca-Cola dominates along with PepsiCo, alcohol is a different industry altogether with unique characteristics and regulatory requirements. The fact that Coca-Cola is noncommittal could indicate just how crowded it considers the category to be, or that it wants to see how demand plays out in the coming months before deciding how to respond.
PepsiCo appears to be taking a similarly measured approach. In an email, PepsiCo told Food Dive the partnership with Boston Beer allows both companies to tap into their expertise. In the beverage giant's case, this includes its iconic Mtn Dew brand and deep customer base, combined with the alcohol maker's insight in brewing and developing hard seltzers and hard teas.
In June, PepsiCo filed a trademark application that indicated the beverage and snack giant could eventually decide to sell alcoholic beverages under the Rockstar brand name. For now, PepsiCo downplayed any further expansion plans, telling Food Dive: "We currently do not have plans to launch alcoholic versions of any other brands, but [we're] always evaluating."
Even before PepsiCo announced plans to enter alcohol through its Boston Beer partnership, the beverage and snack giant dabbled in the category through a pair of nonalcoholic cocktail mixer brands this year called Neon Zebra and Unmuddled. The drinks are designed to appeal to consumers spending more time at home who want to avoid complicated cocktail recipes or large-format mixers.
Greene speculated the partnerships with alcohol companies could place Coca-Cola and PepsiCo in a better position to enter cannabis if the FDA legalizes the sale of the compound in food and beverages, potentially making it easier for manufacturers to sell these products across state lines.
Similar to beer, wine and spirits, alcohol companies have the distribution network and likely more familiarity of the legal requirements around cannabis. MolsonCoors is partnering with Hexo to try out new products, including one with THC in Canada and CBD-based beverages in select U.S. markets, while Boston Beer has created a subsidiary that will oversee research and innovation into nonalcoholic?cannabis beverages.
"There is definitely an element of future proofing here," Greene said. "Cannabis is likely the next big thing ... and beverage is definitely pushing pretty hard to be a product format of choice for cannabis at scale."
PepsiCo recently introduced Rockstar Unplugged, a functional beverage line that contains hemp seeds as a way to encourage relaxation and improve mood. Unlike cannabis, hemp legally sold in the U.S. must contain 0.3% or less of THC, the compound that creates the feeling on being high.
As tastes and values change, especially among younger consumers, beverage makers aren't losing sight of their core offerings that continue to generate tens of billions of dollars in sales. But at the same time, they have little choice but to position themselves for future growth by testing out new categories even if the future is anything but clear.
"This is definitely a learning exercise. What we think is likely happening here is that they're looking at this space, and if it works out, that might be a good springboard into something else," Boylan said. "What that something else might be, we don't know."
World's 5th biggest economy now fully open to hemp/CBD products
Snippet:
California Gov. Gavin Newsom has signed a bill into law making hemp/CBD supplements and foods legal after an unsettled period in which the state health department was following a federal lead in ruling that CBD was not a legal dietary ingredient.
https://www.nutraingredients-usa.com/Article/2021/10/07/World-s-5th-biggest-economy-now-fully-open-to-hemp-CBD-products
$MKC McCormick shares slump in face of inflation, supply chain challenges despite ‘remarkable’ sales growth.
More of this to come?
Snippet:
Spice maker McCormick & Co.’s shares fell 3.2% yesterday despite beating third-quarter profit estimates and posting a “remarkable” 8% sales increase in the period over strong results for the same time last year when pantry-stocking caused consumer demand to skyrocket.
https://www.foodnavigator-usa.com/Article/2021/10/01/McCormick-shares-slump-in-face-of-inflation-supply-chain-challenges-despite-remarkable-sales-growth
chart>>>
https://www.barchart.com/stocks/quotes/MKC/overview
Private label losing ground to name brands, IRI says
https://www.fooddive.com/news/private-label-losing-ground-to-name-brands-iri-says/607397/?utm_source=Sailthru&utm_medium=email&utm_campaign=Issue:%202021-09-30%20Food%20Dive%20Newsletter%20%5Bissue:37055%5D&utm_term=Food%20Dive
Dive Brief:
Private label brands have struggled to keep up with brand name offerings during the past year, according to data from IRI. The Chicago-based market research firm said during the 52 weeks ending Sept. 19, sales of brand names rose 3.6% to $536 billion, while private label increased 1.5% to $142 billion.
IRI found brand names had 79.1% of each food dollar spent in the 52 weeks ending Sept. 5, 2021, up 0.3 percentage points from a year ago, compared to 20.9% for private label. The data showed the increase in share for brand names at the expense of private label was especially prominent in pork, up 3.3 points; beef, up 2.9 points; and fresh bread and rolls, as well as bottled juice, both increasing 1.5 points.
Once dismissed by consumers as inferior, private label has now become a standard go-to item for many people when they shop — generating billions in additional revenue for the companies that manufacture these products.
Dive Insight:
As the pandemic unfolded, there was widespread optimism that private label brands would continue their upward climb. But last year, for the first time in a decade, sales growth of national brands outpaced the growth of private labels, according to NielsenIQ data.
Krishnakumar Davey, president of strategic analytics at IRI, told Food Dive that private label brands were hit harder than their brand name peers by supply chain issues in areas such as transportation. In some cases, he said, brand name manufacturers may have prioritized making their own higher-margin products instead of private label offerings.
Another factor hurting private label is the fact that many consumers haven't gone out as much or avoided expenses like commuting to work, buying a cup of coffee or traveling, and have been flush with extra cash, he said. The money, coupled with the ongoing move toward premiumization, makes brand names a more attractive option due to their higher-quality reputation and nationwide recognition.
"People are buying more premium products, even among low-income shoppers," he said.
Still, Davey said it may not be long before private label has regained at least some of its momentum.
Many consumers are no longer getting extra money from the government, hitting lower and middle income shoppers especially hard. Inflation also is battering much of the U.S. economy, and food and beverage makers of everything from meat and pizza to snacks and sports drinks are passing on a major portion of their increase in expenses to the consumer.
Coca-Cola, Unilever, Nestlé, Mondelez International and General Mills are just a few of the companies whose executives have announced price increases or telegraphed to Wall Street that hikes are coming to offset rising expenses.
"We're seeing that in some industries already that consumers are beginning to cut back, right on the more expensive side and on the poor substitution side," Davey said. "The consumer doesn't have an infinite wallet."
The last year created a perfect storm that in many ways made private label a less attractive option, and minimized the reasons people would have turned to it in the past. But with less money going around, higher prices and improvements in the supply chain, private label may once again regain its momentum.
There's also the growing e-commerce channel, where more consumers are buying their groceries. In April, Kara Sheesley, then-vice president of retail engagement at NielsenIQ, said e-commerce allows retailers to have more control over their online platforms that they can use to drive sales.
"Retailers own that space, and so they actually have more control over what your eye is taken to, which also means that it creates a great opportunity for retailers to support the growth of their own brands," she said.
>>> Can Food Stock Newbie Sovos Brands Live Up to Its Energetic IPO?
Investors found the spaghetti and yogurt maker's stock worthy of a taste, but there may be some flies in the soup.
Motley Fool
by Rhian Hunt
Sep 28, 2021
https://www.fool.com/investing/2021/09/28/can-food-stock-sovos-brands-live-up-to-its-ipo/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
Key Points
Sovos went public at a lower offering price than originally planned, reducing its proceeds.
The company has a large amount of debt, much of which was taken on to pay an owners' dividend.
Its sales are growing, but margin is declining and earnings are not keeping pace with revenue growth.
Offering its shares on the public stock market for the first time on Sept. 23, food company Sovos Brands (NASDAQ:SOVO) ended up pricing its initial public offering (IPO) lower than originally planned. But investors appeared to think the launch suited their taste and the stock price jumped soon after, ending its first day's trading up over 20%.
Despite the relatively optimistic first day of trading, there are at least three reasons you might want to be cautious about buying this food industry upstart's shares.
1. Lower price ends up minimizing the proceeds Sovos was hoping for
Sovos offers a menu of brands that includes Italian cuisine, yogurt, and "better-for-you" pancake and waffle mixes. It's been around since 2017 and was founded by a food industry veteran who wanted to target stand-out products that could compete with category leaders if given the right backing and opportunities. Sovos management filed the IPO with the Securities and Exchange Commission in late August and eventually pegged the expected share price range at $14 to $16. On the actual launch day, pre-IPO interest dropped the actual IPO to just $12 per share. The stock opened at $14.75 per share and traders bid it up to almost $15 in the first hour, a price that actually fell about midway in the early price range.
With the gains winding up in the pockets of traders, Sovos ended up with an initial valuation of $1.17 billion. Had it sold the 23.3 million shares of common stock at the high end of the original range, it might have attained a $1.6 billion valuation instead. In terms of gross proceeds it could use to fund future efforts, the IPO gave the company $280 million, rather than roughly $325 million to $373 million.
2. Sovos is going public with a major chunk of debt
Sovos has a specific use in mind for the cash. The company says it intends "to use the net proceeds from this offering to repay borrowings outstanding under our Credit Facilities and for general corporate purposes." While Sovos provides no breakdown of how the proceeds will be divided between these uses, listing repayment of debt first suggests more cash will be allocated to this than "general corporate purposes."
Sovos' long-term debt increased 182% year over year from $276.5 million to $780 million halfway through 2021. Between the end of December 2020 and the end of June 2021, long-term debt surged roughly 125%. Sovos additionally says in its prospectus it borrowed $905 million in June from Credit Suisse and Owl Rock Capital Corp. It used $373.2 million to repay existing loans, but also "made a restricted payment for the purpose of paying a dividend in the amount of $400 million to the direct or indirect equity holders" of Sovos Brands Limited Partnership, the separate partnership which owns the Sovos Brands food company.
Sovos, in short, is not mainly using its IPO proceeds to fund business expansion. Instead, shortly before going public, it borrowed almost $1 billion and immediately paid nearly half that money to its owners as a "dividend." Then it launched its IPO and earmarked an unknown portion of the proceeds to pay down the debt incurred in paying this dividend.
Even though it's using some of the proceeds to reduce debt, Sovos has a lot of leverage on its balance sheet. Campbell Soup, another food products brand manager that has seen its COVID-19 performance declining and a return to sluggish growth as the economy reopens, has a debt-to-equity ratio of 160. Other processed food companies include Post Holdings with a 242 ratio, The J.M. Smucker Co. with debt to equity of 58, and Hostess Brands with an approximate ratio of 67. Sovos tops all of these companies with a whopping total debt-to-equity ratio of 371, making it one of the most indebted in the sector.
Boxes and containers from Sovos Brands, including spaghetti, lasagna, pasta sauce, yogurt, and pancake mix sit on a white table
IMAGE SOURCE: SOVOS BRANDS.
3. Sovos' performance is a bright spot, but it has caveats
Sovos' financial performance includes an impressive-looking 34% increase in revenue year over year for the first six months of 2021, up to $351.2 million. However, cost of sales increased 37% over the same period. Its earnings before interest, taxes, depreciation, and amortization, or EBITDA, margin declined from 15.7% to 13.1%. Its net income rose 14% from $9.1 million to $10.4 million, while adjusted earnings per share increased from $0.12 to $0.13.
The company is growing and making sales, but its declining margins, rapidly increasing expenses, and low EPS growth counterbalance these positives to some extent. It also recently acquired one of its four brands, Birch Benders, which may be affecting its apparent performance. Birch Benders, which Sovos bought in October 2020, generated $32.5 million in revenue during 2021's first 26 weeks.
Removing the effects of Birch Benders from the equation reduces revenue growth to 24% -- still substantial, but also indicating net income and EPS might have been lower, too, possibly even declining year over year without Birch Benders' contribution.
Sovos has pluses, but investors should be careful
While the stock market apparently found Sovos' IPO toothsome, at least initially, there seem ample reasons to be cautious about the company. Its growth is positive, but many other companies have higher margins, turning revenue into earnings more efficiently. Its IPO proceeds, rather than being funneled to kick-starting continued growth or expansion, are paying down large debts taken on voluntarily right before going public in order to pay a $400 million dividend to Sovos' owners (along with paying down earlier debt).
While its products sell and appear to be good quality food, it seemingly has little to set it apart from other food stocks. With its average product lineup and high debt, Sovos may not be among the most appetizing dishes on the IPO table right now, and investors should be cautious.
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>>> J&J Snack Foods Celebrates 50 Years
Yahoo Finance
September 27, 2021
https://finance.yahoo.com/news/j-j-snack-foods-celebrates-143100778.html
Iconic snack company to kick off year-long anniversary celebration with employee and consumer events
PENNSAUKEN, N.J., Sept. 27, 2021 /PRNewswire/ -- What happens when one of America's most beloved snack companies reaches a significant milestone? There's a celebration, of course! What else would you expect from a company whose motto is "Fun Served Here?"
J&J Snack Foods Corp., (NASDAQ: JJSF) a leader and innovator in beverages and snack foods is recognizing its 50-year anniversary with a year-long commemoration that celebrates both its employees and valued customers.
J&J Snack Foods will kick off the celebration this month and will continue to rollout activities throughout the year to honor its valued employees and loyal brand fans, recognizing the company's impressive growth and success over the past 50 years.
Founded in 1971 by Gerald "Gerry" B. Shreiber, J&J Snack Foods began with the $72,100 purchase of an ailing pretzel company of eight employees at a court auction. Fast-forward 50 years, and the company has evolved into a billion-dollar publicly traded company and industry leader in snack foods with over 4,200 employees, 16 manufacturing locations across the country, and products throughout foodservice and retail channels nationwide. J&J Snack Foods' iconic brands, including SUPERPRETZEL, ICEE and LUIGI'S Real Italian Ice, have been there for millions of moments of fun and togetherness. From family gatherings and birthdays to baseball games, cinemas and amusement parks, J&J Snack Foods brands have served up smiles, joy, and fun across the country for five decades.
"Consumers have enjoyed J&J Snack Food's iconic snacks, beverages, and frozen novelties for 50 years. A staple in great moments inside and outside of the home, our fun and innovative core brands like SUPERPRETZEL and ICEE have captured the hearts of millions," said Dan Fachner, President and Chief Executive Officer of J&J Snack Foods. "I am honored to be part of a legacy that has positively impacted so many people. We celebrate this 50-year milestone in honor of our fans, customers, and dedicated employees. We are excited to commemorate this golden anniversary with a year of celebratory events and look forward to serving up fun for another 50 years!"
J&J Snack Foods will host a celebratory gala recognizing founder Gerry Shreiber's legacy and will launch a series of employee appreciation events across the country, including visits from the company's branded 'snack mobile.' The company will also participate in the NASDAQ closing bell ceremony in New York early next year, followed by a media tour. Consumers and employees alike can expect more fun throughout the year and are encouraged to visit @jjsnackfoods on Instagram for exciting updates.
For more information, visit jjsnack.com.
About J&J Snack Foods Corp.
J&J Snack Foods Corp. (NASDAQ: JJSF) is a leader and innovator in the snack food industry, providing innovative, niche and affordable branded snack foods and beverages to foodservice and retail supermarket outlets. Manufactured and distributed nationwide, our principal products include SUPERPRETZEL, the #1 soft pretzel brand in the world, as well as internationally known ICEE and SLUSH PUPPIE frozen beverages, LUIGI'S Real Italian Ice, MINUTE MAID frozen ices, WHOLE FRUIT sorbet and frozen fruit bars, SOUR PATCH KIDS Flavored Ice Pops, Tio Pepe's & CALIFORNIA CHURROS, and THE FUNNEL CAKE FACTORY funnel cakes and several bakery brands within DADDY RAY'S, COUNTRY HOME BAKERS and HILL & VALLEY. With nearly twenty manufacturing facilities, and more than $1 billion in annual revenue, J&J Snack Foods Corp. has continued to see steady growth as a company, reaching record sales for 48 consecutive years. The company consistently seeks out opportunities to expand its unique niche market product offering while bringing smiles to families worldwide. For more information, please visit http://www.jjsnack.com.
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Sovos Brands' CEO finds success in embracing 'one-of-a-kind' disruptive products
https://www.fooddive.com/news/sovos-brands-ceo-finds-success-in-embracing-one-of-a-kind-disruptive-pro/607119/?utm_source=Sailthru&utm_medium=email&utm_campaign=Issue:%202021-09-29%20Food%20Dive%20Newsletter%20%5Bissue:37016%5D&utm_term=Food%20Dive
The owner of offerings like Rao's and Noosa, which went public last week, has rapidly grown by touting high quality, clean-label ingredients.
In his nearly three decades in the CPG space, Todd Lachman saw firsthand as larger brands ceded sales and market share to smaller, on-trend products that prioritized being all natural and contained a shorter list of recognizable, better-for-you ingredients.
Sensing a lucrative business opportunity, the former Mars, Kraft Heinz and Del Monte executive founded Sovos Brands in 2017 to acquire and build "one-of-a-kind" disruptive brands specializing in premium offerings.
Now just four years later, that hunch is paying off. Sovos' portfolio of pasta sauce, pancake mix, yogurt and frozen Italian meals has turned the upstart into the fastest-growing food company of scale in the U.S. and given it confidence to launch its IPO last week in a deal valuing the young firm at more than $1.3 billion.
Sovos "is not your ... grandparents' roll up of dusty, rusty old assets that's beholden" to the past, Lachman said in an interview on Sept. 23, the day of the company's IPO. "We're really nimble, and we're going to be agile and entering the right categories that we can continue to deliver outsized growth in."
The Colorado company, which takes its name from the Latin word for "one of a kind," started out by acquiring two high-end Italian food brands: premium sauce brand Rao's Homemade and Michael Angelo's Gourmet Foods in 2017. Yogurt brand Noosa became a part of Sovos in 2018 and Birch Benders was added to the fold last year, with revenue rising 15% since the acquisition.
Lachman said Sovos, which priced its IPO at $12, decided now was the right time to go public in order to acquire talent, open up access to new forms of capital and add cash to its balance sheet for acquisitions.
"It's really the right time for a company like ours, which is pioneering a new approach to packaged food, to enter that arena," he said.
The company turned a profit in the fiscal year ending Dec. 26, 2020, with net income of $10.8 million on net sales of $560 million compared to a loss of $27.1 million on $388 million in sales during the prior year. Sovos benefited along with other CPGs from the upswing across the food space as consumers stockpiled ingredients to prepare meals at home during the COVID-19 pandemic, in many cases trading up to premium products.
So far, Sovos has thrived at finding and buying disruptor brands with opportunities to rehabilitate, grow and expand the parts of the grocery store where their products can be found. Despite making inroads, Sovos' four brands each have household penetration under 10%, giving the company an opportunity to increase awareness and tout its product attributes to consumers in an effort to grab market share.
Rao's — which has expanded under Sovos' ownership from sauces into dry pasta, frozen entrees and soups — is the No. 3 pasta and pizza sauce brand by dollar sales, according to the company, compared to No. 7 when it was acquired four years ago. The brand, which currently represents 55% of Sovos' sales, is planning to expand into pizza and salad dressings next year.
Noosa and Birch Benders also are among the fastest-growing brands in the yogurt and pancake and waffle mix categories. Similar to the strategy Sovos has employed with Rao's, it is considering moving Noosa into other products such as frozen novelties and ice cream. Birch Benders is entering baking mixes and frostings, with ready-to-eat baked goods, refrigerated baking and even spoonable yogurt other potential avenues for future expansion.
Acquisitions remain a key piece of Sovos' growth strategy, with Lachman predicting the company could "potentially average one a year going forward." He declined to outline what types of brands Sovos is looking to purchase, but said any deals would contain disruptive opportunities and likely be adjacent to categories it is already in.
"We're really looking for brands and entering categories that we believe can almost create a category in and of itself," he said, pointing to the success Sovos has had with Rao's with ingredients like fresh basil, onions, whole Italian tomatoes and olive oil; Noosa in indulgent yogurt; or Birch Benders in keto and paleo. "We know what we do well."
Good point about food and inflatiion. Droughts can last for years and the current one in the West and North could affect food prices as well. Look at the map, them look at oates. Oates are grown heavily in norther west Miinesota and eastern Northe Dakota.
https://droughtmonitor.unl.edu/Maps/CompareTwoWeeks.aspx
https://finviz.com/futures_charts.ashx?t=ZO&p=m1
I hope RIBT is hedging their Oats, they own an Oat and barley Mill in that area. They have rice interests in California, but they weathered the bigger drought in 2014/5/6. RIBT got caught not hedging rice during the COVID quarenteen in June and July, 2020, when stores were running out of rice.. They had to not buy some rice as it would have been costly on ther contracts to sell their products. It cost the CEO his job. They did say they will be hedging. Keep an eye on RIBT daily in November. I hear "things", sometimes not right though, lol.
https://finviz.com/futures_charts.ashx?t=ZR&p=w1
My spell check is not working at iHub, sorry for my mistakes.
One problem with the food stocks right now is the uptrend in inflation and its negative effect on earnings. I figure some of that could recede as the world economies slow, and the various supply chain disruptions ease, etc.
I always liked the defensive nature of the food sector, and the broader consumer staples in general. Stocks like Pepsico and Procter & Gamble you won't have to worry too much about. Also the flavor/fragrance area with stocks like McCormick.
Fwiw I got a little carried away with all these I-Hub boards, but here are the two broadest ones, covering all the main sectors. Haven't been updated in a while though -
https://investorshub.advfn.com/Best-Long-Term-Stock-Ideas-25585/
https://investorshub.advfn.com/Elite-Stocks-38031/
I am sure I told you the following--- The big internet bear market from March 2000 to October 2002, fueled by massive speculation with internet stocks, the Nasdaq fell 66% and the S&P 500 lost 50%. I did a check on medium and large food stocks an in those same months, they rose like 2% plus dikvidends. I can't get a chart with CVGW going back that far, but JJSF did super. It did lose 1/3 of it's value the first few months, but ended up a double. I don't think I used JJSF in my sample, however. I think I would have remeerd a 2x in those years.
My point, food does offer some safety. CVGW might be a good buy here, even in the face of a majoe bear.
In the 1973 to 1974 bear, I remember the only NY exchange stock up was a fertilizer company, First Mississippi. I remeber that because the town I lived in then had a plant there. Anther disclaimer, I did not check out stocks for safety in the COVID crash.
https://finance.yahoo.com/quote/JJSF/chart?p=JJSF#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-
>> CVGW <<
I had them on my long term buy/hold list for a long time, and it was a great stock. I'm not sure what happened, but it completely fell apart over the past several years. I should probably do a 'deep dive' on the company and find out exactly what happened.
Fwiw, I've been following Dr. Steve Gundry's recommendations ('Plant Paradox'), and eating one avocado/day for several years, so that may have jinxed the stock lol.
J+J Snack Food (JJSF) is another food stock that had been a stellar performer for many years, but got slammed due to Covid. I bought some last year and got some of the rebound. Seems like a solid long term holding, and junk food snacks will always be popular, for better or worse -
>>> J & J Snack Foods Corp. (JJSF) manufactures, markets, and distributes various nutritional snack foods and beverages to the food service and retail supermarket industries in the United States, Mexico, and Canada. It operates in three segments: Food Service, Retail Supermarkets, and Frozen Beverages. The company offers soft pretzels under the SUPERPRETZEL, PRETZEL FILLERS, PRETZELFILS, GOURMET TWISTS, MR. TWISTER, SOFT PRETZEL BITES, SOFTSTIX, SOFT PRETZEL BUNS, TEXAS TWIST, BAVARIAN BAKERY, SUPERPRETZEL BAVARIAN, NEW YORK PRETZEL, KIM & SCOTT'S GOURMET PRETZELS, SERIOUSLY TWISTED!, BRAUHAUS, AUNTIE ANNE'S, and LABRIOLA, as well as under the private labels. It also provides frozen juice treats and desserts under the LUIGI'S, WHOLE FRUIT, PHILLY SWIRL, SOUR PATCH, ICEE, and MINUTE MAID brands; churros under the TIO PEPE'S and CALIFORNIA CHURROS brands; and dough enrobed handheld products under the SUPREME STUFFERS and SWEET STUFFERS brands. In addition, the company offers bakery products, including biscuits, fig and fruit bars, cookies, breads, rolls, crumb, muffins, and donuts under the MRS. GOODCOOKIE, READI-BAKE, COUNTRY HOME, MARY B'S, DADDY RAY'S, and HILL & VALLEY brands, as well as under private labels; and frozen beverages under the ICEE, SLUSH PUPPIE, and PARROT ICE brands. J & J Snack Foods Corp. sells its products through a network of food brokers, independent sales distributors, and direct sales force. The company was founded in 1971 and is headquartered in Pennsauken, New Jersey. <<<
Calavo - >>> The Cautious Bridge to Investing, and Watching Calavo Growers
You can't live your life in fear as an investor, but you can take steps to protect yourself against the unforeseen.
By JONATHAN HELLER
Sep 14, 2021
https://realmoney.thestreet.com/investing/the-cautious-bridge-to-investing-and-watching-calavo-growers-15767620?puc=yahoo&cm_ven=YAHOO
Its good to be back in the saddle, after a week off for our eldest daughter's wedding. If there's one thing I learned this past weekend, it's that you have to expect the unexpected. Just hours before the wedding, the bridge to the island where it was held was shutdown due to a "suspicious package". That meant no one on or off until it was resolved, which could have made for a reception without any food, or many guests stuck on the other side of the bridge. Thankfully, it was resolved quickly, and all went as planned. Something like that happening was the furthest thing from my mind. I just wanted a great day of celebration, and to make it down the aisle without crying or stumbling.
That got me thinking about investing, and our propensity as investors, myself included, to not consider the worst case, the "black swan" event as it were. You can't live your life in fear as an investor, but you can take steps to protect yourself against the unforeseen. When it comes to company specific risk, position-sizing is huge. I've seen individuals, and managers, that have loaded up on a single name - one where they see so much upside that they become blind to what could go wrong. If and when the hammer drops it's too late. Too much portfolio concentration can make you rich, if you are right, but it can also bankrupt you if you are not. The pain of loss here is a lot greater than the euphoria of scoring big. You never know when the bridge to your island will be shut down.
Elsewhere, while catching up on the past week, I noticed what's been going on with avocado name Calavo Growers (CVGW) . Calavo is somewhat familiar due to its association with citrus name Limoneira (LMNR) . Calavo still packages and distributes LMNR's lemons, oranges and avocados, and owns a stake in the company. Until 2019, LMNR also had a stake in CVGW.
What caught my attention, is the fact that CVGW has been absolutely slammed this year. Shares hit $85 back in March, and closed Monday at $35.39, a seven-year low. Last Thursday shares endured a 17% hit following the release of third quarter earnings. It was likely not the quarterly results per se that caused the damage - revenue of $285 million beat consensus estimates by $6 million, while the 17-cent per share loss was a penny ahead - but rather what the company had to say about guidance. In fact, management is not providing near-term guidance due to "inflationary pressures" on raw materials. That was certainly not what the market wanted to hear, but it is the current reality, and you'll likely be hearing a lot more about inflation.
Ever the dumpster-diver, always on the lookout for situations where it appears that the market has over-punished a name, I am keeping an eye on CVGW, but am not yet convinced there's enough meat on the bone to take a stab at these levels. Shares trade at just under 23x next year's consensus estimates of $1.56/share. Just seven days ago, the consensus was at $2.46 and three months ago it was $2.81.
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Natural and organic sales approaching $300 billion
https://www.foodbusinessnews.net/articles/19684-natural-and-organic-sales-approaching-300-billion
The natural products industry has the size, scale and influence to create positive impact for people and the planet, said Carlotta Mast, senior vice president at New Hope Network.
Sales of natural and organic products, including food and beverage, supplements, household and personal care categories, are on track to surpass $300 billion by 2023 and $400 billion by 2030, Ms. Mast said, citing Nutrition Business Journal estimates, during a presentation at Natural Products Expo East on Sept. 23 in Philadelphia.
Demand has eased from the spike that occurred in 2020, when consumers stockpiled groceries during the early pandemic period. Still, growth remains robust as consumer habits over the past year changed in favor of the natural products industry. Sales growth driven by the pandemic is expected to continue over the next three years as new consumers discover and buy more natural and organic brands, Ms. Mast said.
“People tried those new brands, and in many cases, they stuck with them, especially across the food and beverage categories,” she said. “In addition, health and wellness and supporting our immune health became top priorities for us during the pandemic, and this continues to also persist and help grow our industry in 2021.”
The dramatic shift to home cooking elevated demand for organic produce, dairy and packaged foods as more consumers began paying attention to how food is grown and produced, Ms. Mast said.
Sales of natural and organic foods grew three times faster than sales of conventional foods, said Kathryn Peters, executive vice president of business development at SPINS, a data technology company. The pandemic pushed consumers to seek foods with functional ingredients previously found only in the supplement aisle, Ms. Peters said, highlighting products containing apple cider vinegar, elderberry, moringa, collagen, super mushrooms and ashwagandha.
“It’s so exciting to see people realizing that your food can do more for you than just sustenance and really act as medicine,” she said.
Plant-based products continue a strong trajectory, with 12.8% growth over the past year while all of food and beverage grew 4.2%, Ms. Peters said.
“(Plant-based) is still on fire because people are increasingly understanding, ‘it’s good for my body, it’s good for the world,’” she said.
Ms. Mast and Ms. Peters, along with Nicolas McCoy, managing director and co-founder of Whipstitch Capital, discussed how the industry may harness the momentum to address social and environmental issues.
Mr. McCoy suggested broadening the definition of vital infrastructure to include education, health care, arable land and ocean. Investing in these key areas can accelerate progress in reducing poverty and incarceration, promoting income equality and protecting natural resources, he said.
“One paradigm that is important to change if we want to accelerate things is to stop looking at tax increases and charity to fund impact,” Mr. McCoy said.
Brands may take action to tackle climate change by partnering more closely with economically vulnerable farms and supporting conversion to more sustainable practices, Mr. McCoy said. Localizing production as much as possible will help reduce logistical costs and reduce carbon footprint.
Ms. Mast pointed to a lack of diversity in industry leadership that does not reflect the general population.
“We don’t have much representation of Black, Indigenous, Latinx and other people of color on our industry boards or within our industry leadership circles, and that’s increasingly going to be a challenge for our industry because how can we stay relevant to and serve an increasingly diverse consumer base if our leadership doesn’t reflect the needs and the behaviors and the desires of those consumers?” she said. “Our innovation will just not keep pace if we don’t actively work to nurture more diverse leadership in our industry, if we’re not really supporting those BIPOC-owned and -led brands in our industry.”
Businesses must invest in providing living wages, education and training and creating an inclusive culture, and retailers should ensure their aisles reflect all customers, she said.
“The ethnic and international aisle just doesn’t cut it anymore for where we’re heading as a country,” Ms. Mast said.
Investors should embrace and create space for new board talent and invest in diverse entrepreneurs, she added.
“We have to make sure that our practices and the way we’re investing in these companies really is fair and equitable and can, again, bring that diverse leadership we need for tomorrow,” she said.
UN Food Systems Summit: Calls to fix broken food production
https://www.foodingredientsfirst.com/news/un-food-systems-summit-calls-to-fix-broken-food-production.html
aking place today is the UN Food Systems Summit in New York, US, focused on scaling food systems to ensure that everyone worldwide has access to sufficient nutrition.
The Summit is convening major influencers and stakeholders across the world to kick start bold new actions to progress the UN SDGs. The summit will seek to identify solutions and leaders, issuing a call for action at all levels of the food system.
“We need food systems transformation for a livable future. Current food production and consumption are jeopardizing our futures when they could be the very basis of nourishment, justice and sustainability,” stresses Lana Weidgenant, deputy director of This is Zero Hour, Action Track 2 Youth Vice-chair, and youth leader at Act4Food Act4Change.
Decoupling protein production from agriculture
Ahead of the summit, David Henstrom, CEO, Unibio, the sustainable protein company that uses microbial fermentation to convert natural gas, including bio-gas, into high quality and sustainable protein for fish and animal feed, shares his views on the importance of innovative solutions able to effectively tackle the ever-increasing issue of global protein scarcity.
“Global population is projected to reach ten billion by 2050, with a growing middle class turbocharging demand for protein,” he stresses. “Global production of protein will need to increase by 70% of today’s availability to feed the population.”
Unibio uses a natural microbial fermentation process to produce protein from natural gas or biogas.
“However, this growing global demand, in particular for meat, is heavily challenged by ecological and climate constraints,” he continues. “Global biodiversity is currently under threat from overfishing and deforestation associated with more traditional processes of protein production for animal feed.”
“The current pressure on vital ecosystems is unsustainable. The requirement for alternative and sustainable forms of protein is therefore significant.”
Protein from natural gas and biogas
Unibio has developed a proprietary continuous-flow fermentation process that decouples protein production from agriculture and fishing to produce a sustainable protein product – Uniprotein - for use in fish and animal feed. It uses a natural microbial fermentation process to produce this ingredient from natural gas or biogas.
“We believe that innovative solutions and products will be essential if the world is to meet the challenge of sustainably feeding global populations and meet the targets of the UN Sustainable Development Goals,” says Henstrom.
Non-animal-based ingredient launches have recently expanded to include the world’s first milk made from sprouted millets, functional mung-bean protein, mycoprotein-based chicken and fish, and a fat ingredient made from oleaginous yeast for use in alt-dairy.
Notably, plant-based sales are soaring, especially in Asia, the US and Europe, with increasing investment in more sophisticated meat alternatives – such as plant-based fillet mignon – as a growing number of companies try to obtain a share of this fast-paced market.
World Food Forum
Shortly after the UN Food Systems Summit, the youth led World Food Forum (WFF) will host its first flagship event in Rome, Italy, on October 1 to 5, bringing together people from diverse sectors around the world to galvanize global action following up to the Summit.
The Forum features many youth leaders from the agricultural sector. They will be joined by influencers, celebrities, business and civil society leaders.
Participants from the private sector include Ramon Laguarta, CEO of PepsiCo, Kimbal Musk, Co-Founder and Chairman of Big Green, The Kitchen Restaurant Group and Square Roots, and Frank Giustra, Co-Chair of the International Crisis Group.
By Benjamin Ferrer
Yes, a great long term stock. You can't go too wrong owning McCormick. It had that huge run-up last year as a 'stay at home' Covid play, but now it's back into a more attractive range. I recently put them on my 'Contrarian Value' list (currently being updated) -
https://investorshub.advfn.com/Contrarian-Value-Ideas-30183/
Another contrarian value idea is Scott's Miracle Gro (SMG). Because of their recent cannabis related connection, the stock went bonkers last year, but had a big correction along with the broader cannabis sector. SMG is a solid long term stock, down 40% from the early 2021 peak.
I love these boring type stocks. In Peter Lynch's book 'One Up on Wall Street' he said his best long term performance came from owning dull stocks, and if the company's business also has an unpleasant quality to it (like trash haulers), that's even better. He said his most profitable stock ever was a company that owned/operated a rock quarry, lol.
Fwiw, I'm hoping we get a big correction this Fall to put the market back in a reasonable buy range. At current levels the upside vrs downside calculation just doesn't seem that favorable. Generally, buy/hold is the way to go, but I've become a lot more risk averse lately.
Looking at RIBT, sorry to see that it broke the .80 support level. The chart is definitely looking vulnerable, and needs to find some support. Hopefully it gets a bounce soon. .70 is next support on the chart, and then the band from .50-.70.
These microcaps can be frustrating. A lot of the ones I liked over the years ended up dogs (REED, SNES) and several others actually went bankrupt. Luckily I never put much money in them, and now have a $1500 limit, though sometimes up to $2500, which keeps it in the realm of fun/entertainment :o)
MKC was one of my favorites in 2014/15 when they went to China, then they went all organic. As I can do sometimes, I sold way too soon. Dew liked it, but I don't remember if he bought it or not.
https://www.prnewswire.com/news-releases/mccormick-announces-plans-to-expand-organic-and-non-gmo-offerings-300138991.html
>>> J & J Snack Foods Corp. (JJSF) manufactures, markets, and distributes various nutritional snack foods and beverages to the food service and retail supermarket industries in the United States, Mexico, and Canada. It operates in three segments: Food Service, Retail Supermarkets, and Frozen Beverages. The company offers soft pretzels under the SUPERPRETZEL, PRETZEL FILLERS, PRETZELFILS, GOURMET TWISTS, MR. TWISTER, SOFT PRETZEL BITES, SOFTSTIX, SOFT PRETZEL BUNS, TEXAS TWIST, BAVARIAN BAKERY, SUPERPRETZEL BAVARIAN, NEW YORK PRETZEL, KIM & SCOTT'S GOURMET PRETZELS, SERIOUSLY TWISTED!, BRAUHAUS, AUNTIE ANNE'S, and LABRIOLA, as well as under the private labels. It also provides frozen juice treats and desserts under the LUIGI'S, WHOLE FRUIT, PHILLY SWIRL, SOUR PATCH, ICEE, and MINUTE MAID brands; churros under the TIO PEPE'S and CALIFORNIA CHURROS brands; and dough enrobed handheld products under the SUPREME STUFFERS and SWEET STUFFERS brands. In addition, the company offers bakery products, including biscuits, fig and fruit bars, cookies, breads, rolls, crumb, muffins, and donuts under the MRS. GOODCOOKIE, READI-BAKE, COUNTRY HOME, MARY B'S, DADDY RAY'S, and HILL & VALLEY brands, as well as under private labels; and frozen beverages under the ICEE, SLUSH PUPPIE, and PARROT ICE brands. J & J Snack Foods Corp. sells its products through a network of food brokers, independent sales distributors, and direct sales force. The company was founded in 1971 and is headquartered in Pennsauken, New Jersey.
https://finance.yahoo.com/news/4-ultra-safe-stocks-buy-135501214.html
>>> J & J Snack Foods Corp. JJSF is an American manufacturer, marketer, and distributor of branded niche snack foods and frozen beverages. The company has a beta of 0.58 and a Zacks Rank #2. It has a dividend yield of 1.6%, while its five-year average dividend yield is 1.4%. The Zacks Consensus Estimate for its current-year earnings has moved up 23.6% over the past 60 days. The company’s expected earnings growth rate for the current year is almost 164%.
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>>> Sensient Technologies Acquires Assets of Flavor Solutions, Inc.
Yahoo Finance
July 19, 2021
https://finance.yahoo.com/news/sensient-technologies-acquires-assets-flavor-105500287.html
MILWAUKEE, July 19, 2021--(BUSINESS WIRE)--Sensient Technologies Corporation (NYSE: SXT) announced that it acquired the assets of Flavor Solutions, Inc. on July 15, 2021. The business provides flavors and flavor technologies to the food, beverage, and nutraceutical markets.
"The acquisition of this business will allow Sensient to expand its flavor portfolio and add key technologies to strengthen its technical solution capabilities," said Paul Manning, Chairman, President, and Chief Executive Officer of Sensient Technologies Corporation. "I am excited to welcome the Flavor Solutions team to Sensient and to support the strong customer relationships that the team has built."
The acquisition of this business grows Sensient’s flavor portfolio through the expansion of its traditional flavor offering as well as the addition of savory reaction flavors, natural shelf-life extender technologies, and additional sweetness enhancing and salt reduction taste-modulation technology platforms.
ABOUT SENSIENT TECHNOLOGIES
Sensient Technologies Corporation is a leading global manufacturer and marketer of colors, flavors, and other specialty ingredients. Sensient uses advanced technologies and robust global supply chain capabilities to develop specialized solutions for food and beverages, as well as products that serve the pharmaceutical, nutraceutical, cosmetic, and personal care industries. Sensient’s customers range in size from small entrepreneurial businesses to major international manufacturers representing some of the world’s best-known brands. Sensient is headquartered in Milwaukee, Wisconsin.
www.sensient.com
ABOUT FLAVOR SOLUTIONS, INC.
Flavor Solutions, Inc. is a custom product and flavor development company that combines the art and science of flavor technology with other food science technologies to provide its customers with innovative, applied technology delivery systems for products. Flavor Solutions, Inc. serves some of the world’s most prominent producers of prepared foods and beverages, and leaders in the culinary, food service, beverage and nutraceutical industries.
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Pepsico - >>> Questor: it may not be Tesla or Amazon but Pepsi is quietly delivering for shareholders
Telegraph
by Richard Evans
August 24, 2021
https://finance.yahoo.com/news/questor-may-not-tesla-amazon-140613993.html
The recent history of corporate America has been dominated by a small group of charismatic, noisy “big men”: Jeff Bezos of Amazon, Tesla’s Elon Musk, Mark Zuckerberg of Facebook. But some of its stock market champions take a quieter approach to generating profits for their shareholders.
Questor doubts, for example, that many readers are familiar with the name of Pepsi’s chief executive, Ramon Laguarta. This is because Pepsi lacks a “big man culture – it is not the creation of one man, a Musk or a Bezos”, says Rob Burgeman of Brewin Dolphin, the wealth manager, which holds the stock of behalf of some of its clients.
“Laguarta is not someone who comes in and shakes everything up,” Burgeman adds. “Pepsi hasn’t suddenly got a new team at the top. For us, this illustrates good governance, good corporate culture, which has always been important at Pepsi.”
The company’s great rival is of course Coca-Cola, which is perhaps more firmly anchored in the public’s mind and can count Warren Buffett’s Berkshire Hathaway as a major shareholder. Buffett has said he will never sell a single share in Coca-Cola. But Burgeman says Pepsi offers investors the better opportunity.
“Right now the business case for Pepsi is stronger because it sells a greater variety of products,” he says. “Coca-Cola is pretty much beverages, whereas Pepsi offers a range of soft drinks, bottled waters and foods.” Its products include Gatorade, SodaStream and Quaker Oats and it can boast 23 brands that generate annual sales of more than $1bn (£700m).
“It’s a company you think you know but there is more to it,” Burgeman says. “And it is investing in growth. While its range of brands has not changed much in the past few years, it is always tweaking them so that they move along with the times. It is switching to low-sugar versions of its drinks, for example. Continuously investing money in your brands like this creates value. If you don’t do it you will start to go backwards.”
Pepsi’s efforts to grow also involve seeking new markets for its products. “Pepsi is more US-focused than Coca-Cola, so there is an opportunity to sell more beyond its home market,” he adds. “The company has proved itself to be a good allocator of capital, which allows it to make high returns on capital and generate lots of cash. In other words, it’s a good compounder.”
He acknowledges the threat from greater regulation as governments attempt to tackle obesity but says Pepsi has “dials it can twiddle” in response. “It could move towards baked versions of crisps, for example. Given enough time it could probably change its entire range to healthy products. But I can’t see snacks and drinks coming under the same kind of pressure as smoking,” he says.
“We like core blue-chip stocks and Pepsi is one of the first to go into the discretionary funds we run for our clients. There’s a lot to like about it.”
Questor says: buy
Ticker: Nasdaq: PEP
Share price at close: $155.89
Update: Axon
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McCormick - >>> 3 Beaten-Down Growth Stocks to Buy in September
It's a great time to dip into these unloved investments.
Motley Fool
by Demitri Kalogeropoulos
8-28-21
https://www.fool.com/investing/2021/08/28/3-beaten-down-growth-stocks-to-buy-in-september/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
McCormick
Several consumer packaged-food stocks have been ignored by Wall Street recently, but McCormick stands out as particularly attractive. Sure, the spice and flavorings specialist isn't putting up huge growth numbers. But its latest 8% sales spike constitutes market share gains in the valuable condiments and flavorings niche. The company is likely to grow faster than peers like PepsiCo and General Mills in 2021, partly thanks to that focus.
McCormick brings other great investment factors to the table, including a rising annual cash flow level that just crossed $1 billion. Margins are improving, too, thanks to increased prices and a flood of innovative product releases. And management has demonstrated a willingness to keep cash payouts rising for this Dividend Aristocrat.
These characteristics lay the groundwork for better overall returns for shareholders, especially those buying at a time when many investors are looking elsewhere for growth.
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Vertical farming firms get global ambitions
https://www.fooddive.com/news/vertical-farming-firms-get-global-ambitions/604840/?utm_source=Sailthru&utm_medium=email&utm_campaign=Issue:%202021-08-12%20Food%20Dive%20Newsletter%20%5Bissue:36052%5D&utm_term=Food%20Dive
Dive Brief:
Vertical farming giant Kalera AS has agreed to acquire all shares in Germany-based indoor farm operator &ever GmbH for an enterprise value of 130 million euros ($152.6 million). &ever has operations in the Middle East, Asia and Europe, which would give Kalera a global footprint and expand its product offer into cut leaf baby greens. Kalera AS would wholly own the company, which would be renamed Kalera GmbH.
This same week, 80 Acres Farms announced it had raised $160 million in a Series B funding round led by General Atlantic and joined by Siemens Financial Services. The Ohio-based firm will also use the funding for expansion both nationally and globally, as well as for product development.
While most of the largest players in the vertical farming space are based in the United States and consider locally sourced produce as a key differentiator, deals and investments such as these show an interest in expanding their sustainable, resource-conscious model across the globe.
Dive Insight:
Climate change, population growth and food scarcity have made indoor greenhouses and vertical farming attractive solutions to global problems.
In fact, 80 Acres Farms takes its name from its claim that it can grow the same amount of food indoors as on a traditional farm, which usually needs about 80 acres of land. It also says its growing methods use 97% less water than traditional farming, and are powered by renewable energy. These sustainability credentials have helped it raise $200 million in funding since it was founded in Hamilton, Ohio, in 2015, according to Crunchbase, including this most recent round.
The company, which claims to grow the widest variety of produce commercially sold by a vertical farming company at scale, with leafy greens, herbs, tomatoes, cucumbers and microgreens among its product offerings, has provided little detail on its global expansion plans. But it's not surprising 80 Acres Farms has gained the confidence to look beyond the United States for even greater opportunity.
Since the end of 2020, 80 Acres Farms has seen more than 450% revenue growth, according to the company, and it supplies more than 600 retail and foodservice locations. Most recently, 80 Acres expanded its partnership with Kroger to supply more than 300 of its supermarkets in Indiana, Kentucky and Ohio.
The &ever deal gives Kalera, which was founded in 2010 in Orlando, Florida, and has two commercial indoor farming operations there, a greater global footprint. Besides in-store growing systems in Germany, &ever has a large vertical farming facility in Kuwait and is building a "mega-facility" in Singapore, according to the press release. Kalera has its own construction projects in the works in the United States, with sites slated to open this year in Atlanta, Denver and Houston.
With &ever, Kalera is also able to expand beyond whole-head lettuce and microgreens grown through hydroponics into popular baby leaf varieties, such as spinach and arugula, by using the German firm's Dryponics growth technology. Unlike hydroponics, Dryponics uses a proprietary growth substrate to keep roots dry while also enabling them to absorb nutrients in the water, for a more compact footprint and lower water usage. Kalera can also use this technology to create small, in-store growing systems.
Kalera has shown an interest in fast-tracking growth and competencies through acquisitions. In February, it acquired Vindara, a company that develops seeds specifically for indoor vertical farming. With this new capability, Kalera plans to boost yield and speed up growth cycles for its crops.
The company's leap overseas and this latest funding round for 80 Acres Farms — as well as recent raises by players such as Bowery Farming, AppHarvest, and BrightFarms — shows that indoor farming not only promises efficient growth for crops, but also for the companies and their backers' investments. The global market for indoor farming is expected to grow at a compound annual growth rate of 9.4% by 2026, according to Markets and Markets, to reach $24.8 billion.
The 2 biggest private grain companies and not thing plant protein will go to 100% replacement of animals.
Story>>>>>
Sanderson Farms to be acquired by Cargill and Continental Grain for $4.53B
https://www.fooddive.com/news/sanderson-farms-to-be-acquired-by-cargill-and-continental-grain-for-453b/604634/
Dive Brief:
Cargill and Continental Grain reached an agreement to buy Sanderson Farms for $203 per share in cash, representing a total equity value of $4.53 billion for the chicken producer.
The two buyers plan to combine Sanderson Farms with Continental Grain subsidiary Wayne Farms and create a new privately held chicken company. The transaction is subject to regulatory approval, and is expected to close at the end of 2021 or beginning of 2022. Wayne Farms CEO Clint Rivers will lead the combined company.
Sanderson, the nation's third-largest poultry producer, had reportedly been looking at options for the company for some time. The purchase price is at a more than 30% premium over Sanderson's stock on June 18, which was the last full trading day before speculation about the company's potential sale.
Dive Insight:
As consumer demand for protein continues to soar, Sanderson is striking while demand for its poultry offerings is high.
The Mississippi-based company has long been a distant player to Tyson Foods and Pilgrim's Pride, which is majority owned by Brazilian meat giant JBS. According to Watt Poultry USA data cited by The Wall Street Journal, combining Sanderson with smaller chicken processor Wayne will give the new entity about 15% of U.S. chicken production.
The increased scale will provide Sanderson, which processes more than 13.6 million chickens a week, with greater heft in competing with its larger competitors, working with retailers, sourcing feed and benefiting from Cargill and Continental's connections throughout the agricultural space.
Feed costs remain a huge challenge for meat and poultry companies. Sanderson said on its earnings call in May it expects feed costs will be 7.5 cents higher per pound of chicken processed this year. These high costs — plus an increase in construction material costs — prompted the company to delay a planned processing plant.
The deal comes as the meat and poultry industries grapple with a shortage of workers that coincides with the spike in demand. Foodservice outlets also are reopening and restaurants are fueling an insatiable interest for chicken products from companies like Sanderson. In its most recent quarter, Sanderson's net sales were up 34% compared to 2020.
Sanderson also is one of several chicken providers implicated in a sprawling U.S. Justice Department investigation into chicken price fixing.
Many restaurant chains, grocery stores, CPG companies and food distributors have also filed their own lawsuits against chicken suppliers over prices. Several of the providers involved in the investigation have reached settlement deals, but Sanderson Farms so far has not. This means there could eventually be massive damages for the company to pay — and a greater legal headache to unfold — that could be fought more easily by the new ownership structure benefiting from the financial power of Cargill and Continental.
Stock of Sanderson, which is run by the grandson of the company's founder, surged Monday to $195 a share in mid-morning trading, below the offering price of $203. The spread between the two values is likely the natural risk baked into the shares of an acquired company several months before a deal closes.
Part of that uncertainty could hinge on antitrust issues some have speculated could crop up. In June, J.P. Morgan analysts said a deal between Continental Grain and Sanderson Farms would draw government attention given the sizable market share they would control of the U.S. chicken market and issues that have risen over price fixing. The government may be reluctant to sign off on a deal that further consolidates power in the chicken space and removes another competitor as these hurdles still dog the industry.
In a statement, the American Economic Liberties Project called for the Federal Trade Commission and the Department of Justice to investigate the purchase of Sanderson. The organization, which touts its role as an advocate for corporate accountability legislation and aggressive enforcement of antitrust regulations, said the deal would be especially beneficial for Cargill by allowing it to absorb one of its few remaining industrial agriculture competitors.
"Monopoly power is already strangling the chicken business as it is. Another mega-merger that enriches executives at the expense of farmers, shoppers, and meatpacking workers is the last thing rural America needs right now," J.D. Scholten, a senior advisor with the American Economic Liberties Project, said in a statement. "The Federal Trade Commission and the Department of Justice must investigate and challenge any such merger — or pass up a chance to reverse the decades of federal antitrust neglect that have pushed America's farming communities to the brink of collapse."
ADM acquires non-GMO soy ingredients maker Sojaprotein
Published July 29, 2021
https://www.fooddive.com/news/adm-acquires-non-gmo-soy-ingredients-maker-sojaprotein/604116/?utm_source=Sailthru&utm_medium=email&utm_campaign=Issue:%202021-07-29%20Food%20Dive:%20Ingredients%20%5Bissue:35780%5D&utm_term=Food%20Dive:%20Ingredients
Dive Brief:
ADM is acquiring non-GMO soy ingredients maker Sojaprotein for an undisclosed amount, the agribusiness giant said in a statement.
Sojaprotein makes vegetable protein ingredients used in food categories such as meat alternatives and protein bars. It had more than $100 million in sales in 2020.
Interest in the plant-based sector has increased during the pandemic as consumers pay more attention to how their diet impacts their overall health and wellness, boosting demand for ingredients used to make food and beverages.
Dive Insight:
Similar to food manufacturers, ADM has been increasing its plant protein capabilities to keep pace with increasing consumer demand. An estimated 18% of U.S. consumers purchased their first plant-based protein product during the pandemic, according to ADM’s research, and 92% of them stated they plan to continue making purchases in the segment.
The research mirrors other data seeking to quantify the value of alternative proteins. The segment could reach $290 billion by 2035 while capturing 11% of all protein products sold, according to research from Boston Consulting Group and Blue Horizon Corporation.
In light of this growth, it’s unsurprising that ADM is making heavy investments in plant proteins. One of ADM’s recent plays in the space includes the opening of a pea protein plant in North Dakota. It also belongs to a joint venture called PlantPlus Foods with beef processor Marfrig Global Foods to create plant-based products for North American and South American markets.
Sojaprotein’s extensive market reach and product portfolio provide ADM with a bigger foothold in Europe and an instant boost in its plant protein production capabilities. Acquiring existing companies also offers a much faster route to market expansion compared to expanding production capabilities internally, a key to remaining competitive in a fast-growing category. Its focus on non-GMO offerings also gives ADM more traction in the burgeoning clean label ingredient space.
As the plant protein segment expands beyond beef substitutes with startups and established players launching chicken and pork replacements, having enough plant protein to supply existing and new product launches will be key to remaining competitive in the increasingly cutthroat segment. In the case of Sojaprotein, its ingredients roster hits on a lot of key product attributes that could make its portfolio in greater demand among food and beverage manufacturers going forward.
ADM also is showing a bullish interest in novel offerings in alternative protein. It partnered with Perfect Day to produce dairy proteins through fermentation on a broader scale and invested in Air Protein, a startup that uses fermentation to make a meat alternative out of elements in the air. It also backed edible protein maker Nature’s Fynd, formerly Sustainable Bioproducts, and animal-free ingredient startup Geltor.
$K getting a bit into plant protein>>>>
Kellogg's RX brand launches protein-rich cereals
https://www.fooddive.com/news/kelloggs-rx-brand-launches-protein-rich-cereals/603598/
Dive Brief:
RX has launched a new cereal made with plant-based protein called RX Cereal. The cereal comes in three varieties: Chocolate Almond, Vanilla Almond and Strawberry.
RX Cereal uses a mix of pea protein, almonds and brown rice to provide its protein. Each serving of the cereal contains 11 to 12 grams of protein and three to four grams of fiber depending on the flavor. The cereals also are made without artificial colors, flavors, ingredients or preservatives.
Breakfast made a comeback during the pandemic as consumers spent more time eating at home. The new RX Cereal is the RX brand's latest product offering to expand its reach beyond protein bars to include kid snacks, nut butters and oats.
Dive Insight:
Cereal is an appealing option for RX's entry into the breakfast space, since it's a timeless staple that can be prepared quickly. As consumers return to post-pandemic life, breakfast time may be cut short, putting an emphasis on portable items or meals that can be made quickly.
RX's new cereal also touts its use as an afternoon snack that consumers could enjoy as a cereal or more like a granola. Cereal has evolved into a popular snack option with 30% of cereal being consumed during non-breakfast hours, according to data from a 2019 Burke Landmark Eating Occasions Study cited by RX owner Kellogg. Its versatility could increase the new RX Cereal's chance for success depending on how much the increase in breakfast consumption gained during the pandemic remains as consumers return to work and their hectic commutes.
The added protein, along with its avoidance of artificial colors, flavors, ingredients or preservatives, may help the RX Cereal stand out. Consumers continue to show strong interest in plant-based proteins and healthy eating, making RX’s latest breakfast item on trend. This is RX’s newest foray into the plant protein space. It launched a plant-based protein bar in June called RXBar Plant while its oatmeal cups also place an emphasis on the essential nutrient.
RX’s reputation as a fast-growing brand with a strong foothold in the clean-label and natural foods space may help it stand out against existing and new entrants in the breakfast segment. As part of RX’s branding, it lists the ingredients for its products on the front of the package, and cereal is no different.
Kellogg changed the name RXBar to RX in 2019 as part of a push to expand into new product lines. The brand has undoubtedly experienced a boost from Kellogg’s extensive resources and distribution network. Meanwhile, the cereal giant has largely stayed out of RX’s way and allowed the company to expand in the clean label, healthy eating segment as consumers place a priority on better-for-you foods.
As one of the more distinct and recognizable brands to enter the food segment in recent years, RX offers Kellogg a way to reach consumers who are searching for new and innovative products beyond what legacy brands have to offer.
RX will need its reputation and Kellogg’s support to combat a growing list of competitors in the clean label breakfast space. Competing bar maker Clif recently launched a clean label cereal line that it says has 30% to 40% less sugar than other leading cereals. It also faces competition from existing players including Magic Spoon and Kind.
I put this up at your Food innovation, and posted at Twitter and RIBT here.
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=165060923
As canned cocktails boom, brands eyeing longevity face new marketing challenge
The explosive category is nearing an inflection point that will force companies to focus on deepening brand identity and targeting millennial drinkers.
https://www.fooddive.com/news/canned-cocktails-marketers-longevity-face-new-challenges/603019/
Slideshow: Bar innovation points to a bounce-back
https://www.bakingbusiness.com/articles/53942-slideshow-bar-innovation-points-to-a-bounce-back
PepsiCo pursues trademark for Rockstar-branded beer and hard seltzer, Bloomberg reports
https://www.fooddive.com/news/pepsico-pursues-trademark-for-rockstar-branded-beer-and-hard-seltzer-bloom/602107/
Dive Brief:
PepsiCo has filed a trademark application that shows the beverage and snack giant could eventually decide to sell alcoholic beverages under the Rockstar brand name, Bloomberg reported.
The news service said PepsiCo wants to register the name for beer, alcoholic fruit cocktail drinks, alcoholic malt beverages and hard seltzer. The application was filed under a provision that said PepsiCo plans to use the trademark for alcoholic beverages but has yet to do it.
A move into alcohol would mirror a push recently by Coca-Cola, which inked a deal for Molson Coors to manufacture, market and distribute a hard seltzer version of its Topo Chico sparkling water.
Dive Insight:
While alcoholic offerings from PepsiCo don't appear imminent, the maker of Aquafina water, Tropicana orange juice and its namesake cola has given hints in the past that it is seriously considering the category.
Last October, CEO Ramon Laguarta told analysts the company would "make the decisions in the coming quarters, whether this is an area where PepsiCo wants to play." And earlier this year, PepsiCo introduced a brand of nonalcoholic cocktail mixers called Neon Zebra in four flavors: Margarita Mix, Strawberry Daiquiri Mix, Mojito Mix and Whiskey Sour Mix. The drinks are designed to appeal to younger consumers spending more time at home who want to avoid complicated cocktail recipes or large-format mixers.
While it's uncertain which alcoholic beverages PepsiCo would enter, it's likely to dabble in one or two first to get its feel for the category before deciding whether to roll out additional offerings.
Much like Coca-Cola used Topo Chico as the base for its hard seltzer, the patent application indicates PepsiCo is looking to do much the same thing with Rockstar. PepsiCo spent $3.85 billion in 2020 to acquire the struggling energy drink in an effort to accelerate its push into functional beverages. Hard seltzer would be a logical extension for an energy drink like Rockstar.
If PepsiCo does enter alcohol through the Rockstar banner, it would allow it to tap into a brand with instant recognition. It also would allow PepsiCo to increase the number of consumers who use the brand by entering additional beverage categories and maximizing the multibillion-dollar price it paid to purchase it.
PepsiCo would most likely want to partner with another company that has experience making, marketing and navigating the complex legal rules and distribution systems in place for alcoholic beverages. Coca-Cola, which has spent decades working with sodas, waters, teas and sports drinks, likely partnered with Molson Coors for this reason.
PepsiCo, even if it enters alcohol slowly at first, would probably need to partner with a larger company like AB InBev's Anheuser-Busch or Heineken given its expansive reach.
Laguarta said last year that a big factor in its decision "is who do we play with and who do we partner to maximize the value for PepsiCo?"
PepsiCo has been actively expanding its beverage portfolio in an effort to give consumers moving away from sugar more choice and increase the company's ability to grab more of the occasions throughout the day when they might turn to a drink.
It launched sparkling water Bubly and spent $3.2 billion to purchase sparkling water maker SodaStream. PepsiCo also acquired plant-based Evolve and Muscle Milk shakes from Hormel Foods. In addition, PepsiCo introduced Soulboost, an enhanced sparkling water beverage made with real juice and functional ingredients; Driftwell for relaxation and decreasing stress; and a line of juice waters called Frutly aimed at teens.
As people relax and unwind at the end of the day, they may want to reach for an alcoholic drink, or one of these beverages, rather than a soda or juice. A move into alcohol would be a logical and smart step for a company that knows what the beverage consumer wants as much as anyone.
Chobani is eyeing an IPO later this year
https://www.cnbc.com/2021/02/04/chobani-is-reportedly-eyeing-an-ipo-later-this-year.html
KEY POINTS
Chobani is considering going public later this year through an initial public offering.
In the last two years, the company has entered new categories as it sought to be known for more than just Greek yogurt.
According to The Wall Street Journal, the company is seeking a valuation of $7 billion to $10 billion.
The Wall Street Journal reported first reported the news. According to the newspaper, the food company is seeking a valuation of $7 billion to $10 billion.
Founded in 2005, Chobani is best known for its line of Greek yogurts, but in the last two years, it’s been branching out into different categories as sales growth of its signature product has slowed. It’s released oat milks, coffee creamers, probiotics drinks and even ready-to-drink coffee.
“As we create the food company of the future, we’ll look at all options carefully to fuel our ambitious plans, especially with oatmilk and plant-based products,” Chobani founder and CEO Hamdi Ulukaya said in a statement. “An IPO is definitely one exciting direction but whether or not we’re public, we’ll keep disrupting and making things better.”
Hoopp Capital Partners, the private investment arm of the Healthcare of Ontario Pension Plan, has owned a minority stake in Chobani since 2018, when private equity firm TPG Capital exited its own investment.
Chobani’s IPO could pit it against Oatly, the Swedish company that helped popularize oat milk. CNBC has rep
Chobani leans into demand for healthier foods with no-sugar yogurt
The dairy giant has expanded its portfolio during the past few years to include offerings that cater to hot trends in the food space such as probiotics and protein.
https://www.fooddive.com/news/chobani-leans-into-demand-for-healthier-foods-with-no-sugar-yogurt/601491/?utm_source=Sailthru&utm_medium=email&utm_campaign=Newsletter%20Weekly%20Roundup:%20Food%20Dive:%20Daily%20Dive%2006-19-2021&utm_term=Food%20Dive%20Weekender
Chobani is rolling out a Greek yogurt without sugar as the food maker doubles down on healthier offerings in demand with consumers who are more closely watching what they eat and drink.
The company said Chobani Zero Sugar, shipping to retailers this month, is the first nationally distributed product in the U.S. yogurt aisle that has no trace of sugar. Each serving has 60 calories, uses only natural ingredients, is lactose-free and contains six live and active cultures including probiotics.
"This was a gap in our portfolio. It's a segment we weren't competing in directly," Niel Sandfort, chief innovation officer at Chobani, said of the more than $1 billion diet and reduced sugar yogurt category. "We have very high hopes that it's going to not just take share, not just premiumize and trade up the consumer, but bring in new consumers who may have walked away from the yogurt set because of sugar."
To create Chobani Zero Sugar, the Greek yogurt maker used milk that’s been filtered to reduce naturally occurring sugar. Chobani then uses what it calls "cutting-edge" natural fermentation methods that allow yogurt cultures to fully consume the remaining sugar. It then adds monk fruit and allulose to give the yogurt a sweet taste. Chobani Zero Sugar comes in four flavors: Vanilla, Mixed Berry, Strawberry and Blueberry.
Sandfort said Chobani's no-sugar offering was a "very challenging product" to develop and was subjected to the most amount of testing in the company's history for a new launch. Unlike other low-calorie, low-sugar options that use artificial ingredients and create an off-putting flavor, Sandfort said Chobani stuck to its mantra by using only natural ingredients.
"We didn't walk away from any of the things we believe in," he said. "To get to [zero sugar] there's lots of easy ways to do that. And there's only one really hard way, which is doing it naturally through fermentation."
The food maker has "been on this path" to no sugar for much of its history, Sandfort said. When Chobani debuted, its yogurt had fewer than 15 grams of sugar compared to the 30 or 40 grams in its competitors' products. It has since launched a reduced-sugar yogurt and a zero-sugar oat milk.
Chobani established its dominance in the Greek yogurt space not long after it launched. But in recent years, it has moved aggressively to tailor its product portfolio to cater to many of the hot trends in the food space. Chobani launched a probiotic yogurt line in January and last summer introduced its protein-laden Chobani Complete. In late 2019, Chobani made its first foray into plant-based dairy with Non-Dairy Chobani made from coconuts.
"We are consciously being more overt with the functionality of the food," Sandfort said.
The New York-based Chobani has not only focused its innovation prowess in dairy but also ventured outside the category with the launch of cold brew coffees.
The suite of new product launches should help Chobani expand its presence in grocery stores and increase its revenue, which totals more than $1.5 billion annually.
The sales growth would undoubtedly be looked upon favorably by perspective investors as Chobani is reportedly considering an IPO later in 2021. The Wall Street Journal reported in February Chobani is looking at a listing that it hopes would value the company at $7 billion to $10 billion.
Chobani’s latest product roll out comes as the company further expands its presence in the yogurt category. In the last 52 weeks ended May 29, total yogurt sales have increased 2.5% as the category benefited from people spending more time at home snacking, while Chobani’s growth during the same period was 7.4%, according to Nielsen U.S food channels data shared by the company.
Chobani's Zero Sugar offering will further intensify pressure in the ultra-competitive yogurt space, where companies have been racing to lower the sugar content of their products.
General Mills has introduced YQ by Yoplait where the plain variety has one gram of sugar, and the flavored options have 9 grams. In April, the food manufacturer introduced a high-protein yogurt to its keto-friendly Ratio product line that contains 3 grams of sugar. It joins the original line of Ratio yogurts, which contain 15 grams of protein and 1 gram of sugar per serving.
Dairy and plant-based food giant Danone boosted its presence in the low-sugar space with the introduction of Two Good, a Greek low-fat yogurt with two grams of sugar, in 2019. The offering from the French company has proven to be a hit. Sales more than doubled in 2020, and the brand posted $111 million in revenue during its first 16 months on the market, according to Danone.
olson Coors' CEO has a bold plan to 'fundamentally change' the beer maker. But will it work?
Snippet:
As consumers turn to other beverages, Gavin Hattersley has moved into energy drinks, diet soda and tequila to revive his company's portfolio — all while combating outside challenges.
https://www.fooddive.com/news/molson-coors-ceo-has-a-bold-plan-to-fundamentally-change-the-beer-maker/600276/
Mother’s prenatal gut microbiota may predict child behavior: Study
Snippet:
Increased diversity of a mother’s gut microbiota during the third trimester of pregnancy may influence a child’s brain development and behavior, says a new study from Australia.
https://www.nutraingredients-usa.com/Article/2021/06/10/Mother-s-prenatal-gut-microbiota-may-predict-child-behavior-Study
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JM Smucker Co | SJM | 8.03% |
Tyson Foods Inc Class A | TSN | 7.67% |
Archer-Daniels Midland Co | ADM | 7.53% |
General Mills Inc | GIS | 7.48% |
Bunge Ltd | BG | 7.44% |
GrowGeneration Corp | GRWG | 4.47% |
The Hershey Co | HSY | 4.16% |
PepsiCo Inc | PEP | 4.14% |
Darling Ingredients Inc | DAR | 4.07% |
Mondelez International Inc Class A | MDLZ | 4.06% |
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Corteva Inc | CTVA | 5.64% |
Givaudan SA | GIVN | 5.02% |
Nutrien Ltd | NTR.TO | 4.91% |
Mowi ASA | MOWI | 4.90% |
International Flavors & Fragrances Inc | IFF | 3.33% |
Symrise AG | SY1.DE | 3.22% |
Kerry Group PLC Class A | KYGA | 3.16% |
FMC Corp | FMC | 3.11% |
Zoetis Inc Class A | ZTS | 2.82% |
Deere & Co | DE | 2.71% |
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