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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
Avocado consumption hits record highs, driven by health trends
https://www.fooddive.com/news/avocado-consumption-hits-record-highs-driven-by-health-trends/600858/
Dive Brief:
Monthly shipments of avocados to the U.S. set a new record in January 2021 at nearly 320 million pounds, representing a 33% year-over-year increase, according to research from Rabobank. Demand is also growing year-round, with shipments in March 2021 up 20% compared to the same time in 2020.
While Rabobank does not expect prices to hit the same levels as 2019, it anticipates average avocado prices to remain higher than in 2020. The report estimates shipments for 2021 and 2022 to be up 12% compared to the three-year average for 2018 to 2020.
Per-capita consumption has more than doubled between 2010 and 2020 to hit more than 8.5 pounds per year, and could surpass 11 pounds per person by 2026. Interest in healthy eating is driving demand along with restaurant reopenings and a boost in economic activity as pandemic restrictions lift, but issues around sourcing and sustainable cultivation pose challenges, Rabobank noted.
Dive Insight:
Sometimes referred to as a superfood, avocados pack a serious punch with high levels of monosaturated fat as well as potassium, fiber, folate, essential vitamins and minerals. Consuming the green fruit instead of refined carbohydrates can also boost satiety in adults with weight gain and obesity, according to research from the Illinois Institute of Technology’s Center for Nutrition Research.
Avocados have also proven to be highly versatile, making their way into everything from guacamole to ice cream. The upcycling startup Hidden Gem Beverage Co. even makes beverages from avocado pits. Indeed, the seeds have much potential value. At Pennsylvania State University, researchers have developed a range of natural food colorings in the red-orange-yellow spectrum from avocado seeds, and the pits may even have the ability to fight listeria.
However, as demand soars, sourcing remains a challenge for the avocado industry due to the regional nature of cultivation, the Rabobank report notes. Mexico is the main provider of avocados to the U.S. market, with Peru and California also among the biggest in the world. California will have a slightly lighter avocado crop this year compared to recent years, according to Rabobank. This could create supply challenges when California and Peru’s crop seasons end and Mexico transitions to a new season.
And the avocado industry needs to keep an eye on sustainability to ensure that the fruit's "green gold" reputation remains. The Sustainable Food Trust has called attention to what it describes as the detrimental impact of the ongoing “green gold rush” around avocados. It cites research from Carbon Footprint Ltd that finds two small avocados in a packet has a carbon footprint that is twice the amount of a kilo of bananas, for example. Avocados are a challenging crop to cultivate, requiring specific conditions and a high number of inputs in some cases.
The several thousand miles they often travel to reach consumers is another factor that drives avocados’ carbon footprint along with land management policies in countries that incentivize production without accounting for deforestation.
This scrutiny comes as foods' environmental and sustainable credentials become more important to consumers. Eleven percent of consumers recently shifted their purchasing decisions to include more products with environmental claims between 2019 and 2020, according to research from Kearney.
There are a few efforts to improve avocado sustainability. Finding a way to upcycle avocado seeds could also boost the carbon footprint of avocado production and provide food manufacturers with an opportunity to market their upcycled products to sustainability-focused consumers.
Yes, the Pet/Animal sector seems like one of the best for long term buy/hold. I actually have an I-Hub board for the sector (link below). I got a little carried away creating these sector boards, but it's a great way to store relevant articles and stock lists -
https://investorshub.advfn.com/Animal-Sector-38285/
The ProShares Pet Care ETF (PAWZ) seems especially good. CHWY is in there, along with FreshPet (FRPT), and a bunch more. Also, Pet/Animal healthcare is a great area. I owned the ETF (PAWZ) last year and it was on fire, but I took profits late in the year figuring it was due for a pullback (along with a lot of the 'theme' sector ETFs). It did have a decent pullback in February, but I didn't re-enter in time so am waiting for another pullback. Probably best to just buy/hold this sector since pets and livestock will always be with us :o)
CHWY - "The Amazon" for pet food. Free 1-3 day shipping with a $49 order.
Spinoff from PetSmart about 2 years ago. It had a nice opening rally and corrected to current levels.
Products
https://www.chewy.com/b/dog-288
Spin off story>>>
https://www.petproductnews.com/news/what-petsmart-s-split-from-chewy-means-to-the-industry/article_eee7bb16-1942-11eb-b72c-dba94f5f466c.html
info>>
https://www.barchart.com/stocks/quotes/CHWY/overview
https://finance.yahoo.com/quote/CHWY/key-statistics?p=CHWY
This is a great board. I am on All Things Food, but it is more information than investing. I will spread the word on all three.
https://investorshub.advfn.com/All-Things-Food-25432/
>>> Reed’s Inc.® Announces Expanded Distribution With CVS Pharmacy
Reeds, Inc.
May 4, 2021
https://finance.yahoo.com/news/reed-inc-announces-expanded-distribution-143000098.html
Six New Beverage Multipacks From Reed’s® & Virgil’s™ Roll Out At Over 1,000 Stores
NORWALK, Conn., May 04, 2021 (GLOBE NEWSWIRE) -- Reed’s Inc.® (Nasdaq: REED), maker of the nation’s leading portfolio of handcrafted, all-natural beverages, announces further distribution with CVS Pharmacy as the company’s best-selling varieties expand into over 1,000 stores.
The increased distribution brings more better-for-you beverage options from Reed’s®, America’s #1 ginger company, and Virgil’s™, a full line of handcrafted sodas, to CVS Pharmacy consumers. The expansion builds on the tremendous response the retailer received for the existing availability of Reed’s® Extra and Zero Sugar Extra Ginger Beer, which is crafted with REAL fresh, organic ginger root in a Jamaican-inspired recipe.
Moving more prominently into CVS Pharmacy stores, in addition to Reed’s® Ginger Beer, the all-natural beverage multipack options now include Reed’s® REALLY REAL Ginger Ale™ Original and Zero Sugar, the only ginger ale on the market made with 2,000 mg of REAL, fresh-pressed organic ginger, as well as Certified Ketogenic sodas from Virgil’s™ in Zero Sugar flavors like Root Beer, Cream Soda and Cola, that are handcrafted with a proprietary natural sweetener system and no artificial preservatives.
“Over the past year, Reed’s Inc. has been rapidly expanding our distribution across all channels, and we are excited to increase availability of Reed’s and Virgil’s beverages at CVS Pharmacy locations across the country,” said Norman E. Snyder, CEO of Reed’s, Inc.® “Growing from just two of our Ginger Beers at CVS Pharmacy, to now retailing multiple varieties from Reed’s and Virgil’s, shows our company’s unstoppable momentum to meet the demand from consumers and retailers alike for more all-natural alternatives.”
Reed’s® and Virgil’s™ also retail at grocery and convenience stores nationwide, and online at the Reed’s® and Virgil’s™ Amazon Storefronts, as well as the Reed’s® and Virgil’s™ Online Stores.
For more information about Reed's Inc.®, please visit the Reed's® website and the Virgil’s™ website or call 800-99-REEDS. Follow Reed's® on Reed’s® Twitter, Reed’s® Instagram, and Reed’s® Facebook (@drinkreeds), and Virgil’s™ on Virgil’s™ Twitter, Virgil’s™ Instagram, and Virgil’s™ Facebook (@drinkvirgils).
About Reed's, Inc.
Established in 1989, Reed's is America's number 1 name in Ginger and America’s best-selling Ginger Beer brand and innovator for decades. Virgil's is America's best-selling independent, full line of natural craft sodas. The Reed's® portfolio is sold in over 40,000 retail doors nationwide. Reed's core product line of Original, Premium, Extra and Strongest Craft Ginger Beers, along with the Certified Ketogenic Zero Sugar Extra Ginger Beer are unique due to the proprietary process of using fresh ginger root combined with a Jamaican inspired recipe of natural spices and fruit juices. Reed’s recently introduced Reed’s Real Ginger Ale in both full and zero sugar versions that contain 2,000 mg of fresh ginger. The company uses this same handcrafted approach in its award-winning Virgil's™ line of great tasting, bold flavored craft sodas and Certified Ketogenic Zero Sugar Varieties.
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>>> E-Commerce Continues to Boost Grocery Sales: 4 Solid Picks
Yahoo Finace
by Ritujay Ghosh
April 20, 2021
https://finance.yahoo.com/news/e-commerce-continues-boost-grocery-101910051.html
E-commerce has played a major role in helping the retail sector recover from a total collapse during the pandemic. While shops remained closed during the peak months of the pandemic, more people shopped online. This in a way changed the shopping habits of many who now prefer shopping online.
This has seen online grocery sales surging during the pandemic. Given that there are no signs of the coronavirus subsiding, e-commerce is likely to play a major role in the coming days.
Online Grocery Sales Grow
According to Brick Meets Click/Mercatus Grocery Shopping Survey, online grocery sales surged 43% in March on a year-over-year basis. Online grocery sales in March totaled $9.3 billion compared to $6.5 billion a year ago, as the second round of stimulus checks reached millions.
Moreover, the survey shows more than 69 million households placed 2.8 orders on average in March. Over 69.3 million households placed at least one or more online orders during March 2021 compared with 74.5 million a year ago, when stay-at-home orders were imposed and shops and businesses had to be temporarily shut down.
This is a slight loss in the number of people shopping online from last year’s figures but that was primarily because many households are also making grocery purchases that are shipped to the home through common or contract carriers.
In fact, the curbside pickup segment gained 12%, and the delivery segment gained 23% in March, which proves that people are more comfortable shopping online.
Coronavirus Driving Online Sales
Although online grocery sales somewhat declined in February, it has once again bounced back as people spent more freely after the second round of stimulus checks started reaching them. In fact, that has helped the entire industry, with retail sales surging 9.8% monthover month in March to hit a 10-month high.
Moreover, despite three vaccines being rolled out, the COVID-19 crisis is far from over, with new cases hardly subsiding. Also, many who are hesitant to shop at a physical store but at the same time don’t want to pay for certain online grocery items have been going for curbside pickup, which is driving online sales further. Hence, online shopping will remain the preferred choice for most despite the COVID-19 vaccine being already rolled out.
Our Choices
Fears of the virus continue to exist irrespective of the vaccination drive. Preventive measures to keep the virus at bay are likely to see people ordering for all household necessities, including grocery, online. Given this situation, it would be prudent to watch out for these five stocks thatare likely to rally on a sharp rise in demand for online grocery in the near future.
United Natural Foods, Inc. UNFI is the leading distributor of natural, organic and specialty food and non-food products in the United States and Canada. The company carries more than 1,10,000 high-quality natural, organic and specialty products, consisting of national, regional and private label brands in six product categories.
The company’s expected earnings growth rate for the current year is 29%. The Zacks Consensus Estimate for current-year earnings has improved 8.7% over the past 60 days. The company carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
J & J Snack Foods Corp. JJSF is a manufacturer, marketer and distributor of branded niche snack foods and frozen beverages for the food service and retail supermarket industries.
The company’s expected earnings growth rate for the current year is 88.3%. The Zacks Consensus Estimate for current-year earnings has improved 2% over the past 60 days. J & J Snack Foods holds a Zacks Rank #2.
Sprouts Farmers Market, Inc. SFM which operates in a highly fragmented grocery store industry, has a unique model that features fresh produce, a foods section, and a vitamin department focused on overall wellness.
The company’s expected earnings growth rate for next year is 10.2%. The Zacks Consensus Estimate for current-year earnings has improved 5.1% over the past 60 days. Sprouts Farmers Market has a Zacks Rank #2.
Performance Food Group Company PFGC markets and distributes food and food-related products. Its operating segment consists of Foodservice, Vistar, and PFG Customized.
The company’s expected earnings growth rate for the current year is 85.7%. The Zacks Consensus Estimate for current-year earnings has improved 1.6% over the past 60 days. Performance Food Group carries a Zacks Rank #2.
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>>> McCormick CEO: 'We've been hard-pressed to keep up with' Old Bay Seasoning demand
Yahoo Finance
Brian Sozzi
April 19, 2021
https://finance.yahoo.com/news/mc-cormick-ceo-weve-been-hard-pressed-to-keep-up-with-old-bay-seasoning-demand-180702023.html
McCormick's Old Bay Seasoning appears to be the continued flavor of choice for home chefs amid the COVID-19 pandemic.
"Oh my gosh, the demand for Old Bay has been extraordinary, and we've been hard-pressed to keep up with it. And even now, it's one of those items that we are still struggling with to keep in stock. The demand is just high for favorites like that," McCormick Chairman and CEO Lawrence Kurzius told Yahoo Finance Live.
Kurzius said McCormick (MKC) is working hard to bring back supplies of products it decided to cut at the height of the pandemic in 2020, when it focused on getting its top-selling items such as Old Bay seasoning to grocery-hoarding customers.
"We hired 1,400 additional people mostly in our supply chain and we have added roughly the equivalent of an entire new factory by changing shift patterns and bringing in human resources. And so today, we are finally beyond the worst of the allocation time, and are rapidly closing in on the remaining 50% of all the items that we had on suspension. You should see that shelf position really accelerate," Kurzius explained.
Despite people beginning to venture outside post vaccination, McCormick hasn't seen a drop off in business at its key consumer solutions segment. First quarter sales for the segment surged 35% from the prior year on the back of demand for spices, French’s mustard and Frank’s Red Hot sauce.
"Demand from consumers has really been strong through the entire pandemic, and really still is," Kurzius said.
Meanwhile, the flavor solutions segment — which supplies products to restaurants — remained under pressure in the quarter. Sales for the segment only rose 4% from a year ago.
For 2021, McCormick sees sales up 8% to 10%. Earnings are pegged at 5% to 7% growth from last year.
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Mission Produce (AVO) - >>> COVID-19 won't disrupt people from consuming this popular Super Bowl food
Yahoo Finance
by Alexis Christoforous
January 31, 2021
https://finance.yahoo.com/news/covid-19-wont-disrupt-people-from-consuming-this-popular-super-bowl-food-164108240.html
Super Bowl celebrations may look a lot different this year because of COVID-19, but guacamole will still be the star player off the gridiron.
The dip’s main ingredient — the avocado — has become a central component of the Super Bowl party spread, and not even a global pandemic is expected to change that.
“I think you’ll see more parties, smaller sizes,” Stephen Barnard, founder and CEO of avocado distributor, Mission Produce, told Yahoo Finance Live. “We sure haven’t seen any slowdown in the pull through on orders leading up to the Super Bowl. It’s been very good.”
Some 13.2 million pounds of avocado are typically consumed in the U.S. during the Super Bowl, making it the biggest avocado day of the year — bigger than even Cinco de Mayo and the 4th of July.
With their heart healthy fats, avocados have become a popular addition to salads, sandwiches, even omelets. However you choose to eat them, avocados are enjoying their moment in the sun.
“People are conscious of what they’re eating more so now during the pandemic than they ever have been,” said Barnard.
2020 was a record year for avocado consumption in the U.S. That helped Mission Produce (AVO) post quarterly revenue of $205 million in its first earnings report as a publicly traded company. Strong consumer demand at the stores has helped to offset a drop in orders from the restaurant industry, which has suffered because of coronavirus-related dining restrictions in cities across the country. Barnard said the exception is fast-casual restaurants, like Chipotle (CMG), which typically goes through 450,000 avocados a day.
While the revenue result was enough to beat expectations, it was still down 11% from a year ago, thanks to lower avocado prices.
Americans’ love for avocados and rising prices for the highly exportable fruit are fueling the deforestation of central Mexico’s pine forests as farmers rapidly expand their orchards to feed demand.
“Supply is plentiful,” said Barnard, who notes that is the main reason why prices for the fruit are so low. “Mexico is shipping 10 million pounds a week more than they were just a year ago.”
Barnard expects prices to remain low through at least the spring.
The decline in avocado prices comes at a time when prices for many other food items are going up. Global food prices in December were the highest for any month in the last six years, according to the FAO Food Price Index. Meat prices rose by 1.7% and dairy shot up 3.2% as coronavirus-related supply chain disruptions put upward pressure on prices.
Consumers’ buying patterns at the supermarket have also changed because of the pandemic. “They’re shopping less, but buying more,” said Barnard. Instead of buying loose avocados, he said bagged purchases of the fruit have become popular.
Avocado hacks
If you’re looking to get a longer shelf life from your bag of avocados, Barnard recommends tossing an already ripe avocado in the refrigerator, where it can last a week to 10 days.
The best way to prevent your sliced avocado from turning brown? Simply brush a little lemon or lime juice on the fruit and seal it in an airtight container. That should delay the browning process for about a day.
To quickly ripen an avocado, Barnard says, put it in a paper bag with a banana, which gives off ethylene, a hormone that speeds up the ripening process.
With those hacks, you’ll be ready to make a killer guacamole — for the big game!
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>>> J&J Snack Foods Corp (JJSF) Q1 2021 Earnings Call Transcript
JJSF earnings call for the period ending December 26, 2020.
Motley Fool
Jan 26, 2021
https://www.fool.com/earnings/call-transcripts/2021/01/26/jj-snack-foods-corp-jjsf-q1-2021-earnings-call-tra/
J&J Snack Foods Corp (NASDAQ:JJSF)
Q1 2021 Earnings Call
Jan 26, 2021, 10:00 a.m. ET
Contents:
Prepared Remarks
Questions and Answers
Call Participants
Prepared Remarks:
Operator
Welcome to the J&J Snack Foods First Quarter Earnings Call. My name is Richard and I'll be your operator for today's call. [Operator Instructions]
I will now turn the call over to Gerry Shreiber. Mr. Shreiber, you may begin.
Gerald B. Shreiber -- Chairman of the Board, Chief Executive Officer and Director
Thank you, Richard. Good morning, everybody, and welcome to our first quarter conference call with J&J Snack Foods. I am Gerry Shreiber, I should be familiar with -- you should be familiar with my name and whatnot as I've been in the same position now close to 50 years much to my pleasure privilege. We have two new attendees here, Dan Fachner who has been running our ICEE business, and I'd say it very, very well, has not been in the formal shareholders meeting. He recently located from the West Coast and is now living in Tennessee. And as you may know, Dennis Moore, who was our CFO for 30 some odd years has retired and Ken Plunk, who was certainly well qualified, he had a stellar career with Kmart -- I'm sorry with Walmart and Ken has been with us now, is it Ken four months?
Ken Plunk -- Chief Financial Officer
Roughly, yeah.
Gerald B. Shreiber -- Chairman of the Board, Chief Executive Officer and Director
Okay. Let me begin with some commentary for the first quarter and I'll begin with our forward-looking statements. Forward-looking statements contained herein are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected in the forward-looking statements. You are cautioned not to place undue reliance on these statements, which reflect management's analysis only as of the date hereof. We undertake no obligation to publicly revise or update these forward-looking statements to reflect events or circumstances that arise after the date hereof.
Results of operations. Net sales were $241 million for the quarter, a decrease of 15%. Sales continue to be challenged by the impacts of COVID-19 especially in our Food Service and Frozen Beverage business segments. Despite this environment, we are seeing gradual improvements in sales trends since quarter four 2020, where sales were 19% worse than last year. Our retail business responded well driving 33% growth this quarter. Operating income was $578,000 for the quarter, a decrease of $21.1 million as declining sales pressured production efficiency and expense leverage.
Now I'd like to review the results of each of our business segments. And let me add just one comment, our Food Service business, which represents about 70% of our total sales, was significantly impacted during the past year because of the sports and leisure cancellations and sales reductions, movie theaters and to a lesser extent schools.
Food Service: sales to food service customers decreased 13% for the quarter, an improving trend when compared to quarter four 2020 that declined 21% versus the prior year. Key customer venues and channels like theme parks, schools restaurants, sports and leisure and theaters continue to operate at limited capacity impacting food service sales. Soft pretzel sales decreased 35% and frozen juices and ices decreased 11%.
Churros and funnel cake sales were down 30% and 49% respectively. Sales of bakery products declined 8% as the virus impacted traffic, purchase choices and frequency in this part of our business.
Our handheld business had a strong sales quarter exceeding last year by $10.4 million or 145% and was driven by a new product developed for one of our wholesale club customers.
Operating income in our Food Service segment decreased $11.9 million in the quarter due to the sales shortfall and lower growth.
Retail Supermarkets: our retail grocery business continues to perform well as sales increased 33% for the quarter. Sales were led by our SUPERPRETZEL brands with an increase of 41% in the quarter. Frozen juice and ices sales were up 52% and sales of biscuits increased 10%.
Handheld sales were up 1% for the quarter. Operating income increased $2.5 million or 113% in the quarter driven by higher sales and operating income margins of 12%, over 400 points better than last year. Sales for the Frozen Beverage business segment were down 41% in the quarter. Beverage related sales were down 55%, driven entirely by a 56% decline in gallons as traffic in theaters, amusement park and retailers faced continued impacts from COVID-19. These venues rely on incremental seasonal sales in December, which were significantly affected by reduced operating capacity and consumers staying home. Service revenue declined 16% almost entirely from cancellation of a key customer's maintenance program. Machine revenue decreased 46% due mainly from lapping a $5 million non-recurring sales from last year.
Our Frozen Beverage segment incurred an operating loss for the quarter of $10.3 million as the COVID-19 restrictions continued to pressure sales. These sales challenges impacted gross margin mix and efficiency.
Consolidated: Gross profit as a percentage of sales was 20.8% this quarter, down from 27.5% last year. Gross profit percentages decreased because of the previously mentioned COVID-19 sales pressure on our Food Service and Frozen Beverages customers. Total operating expense as a percentage of sales was 20.6% in the quarter, up from last year's 19.9%. Total expenses were $6.6 million below last year but still deleveraged against the significant drop in sales. Net earnings for the quarter was $1.8 million, down from $17.1 million last year.
Our cash and investment securities balance was $285 million as of December 26, 2020, an increase of $7 million from our September year-end. We continue to drive positive cash flow and our balance sheet and liquidity remained strong in this challenging environment. We continue to look for acquisition opportunities and remain focused on the long-term growth opportunities of our business. Our capital spending was $9.7 million in the quarter as we continue to invest in plant efficiencies and growing our business. We estimate our spendings for the year to be about consistent with prior years.
A cash dividend of $0.575 per share was declared by our Board of Directors and paid on January 12, 2021. We did not buy back any shares of our stock during the quarter. Our investment income this year was $416,000 less than last year due to decreases in the amount of investments and lower interest rates. I want to thank you again for your continued interest.
I will now turn the meeting over to Dan Fachner, who was named President of the J&J Snack Foods total group about six months ago and Dan will have a few additional comments before we open up the meeting for Q&A.
Dan Fachner -- President
Great, thank you. Good morning and thank you for joining us on our first quarter conference call. We are thrilled to have you listening in and we thank you for your interest in J&J Snack Foods. With us today in the room, in addition to myself and Ken Plunk, who were announced earlier, we also have Marjorie Roshkoff, our Vice President and General Counsel; we have Bob Pape on the line, our Senior Vice President of Sales and we have Bob Radano, our Senior Vice President and COO.
I'd like to make just a few more additional comments before we open it up for questions. But as many of you know, we are living in some unprecedented times. Our lives have been impacted not to mention our business this past year. How we work, how we communicate, our shopping habits, how we entertain ourselves and just simply how we stay connected with one another such as the Zoom calls we're all going through. I believe our company has done an excellent job working through the challenges; it's been a consistent daily focus on the basics of our operating and our business.
I have to tell you I'm so proud of our employees and their unwavering commitment to serve our customers each and every day. We continue to make progress despite the challenges of COVID-19. In this first quarter, traffic and in key Food Service revenues that comprised of two-thirds of our sales continue to operate at substantially reduced or limited capacity. This was even more pronounced during the holiday season where many of these venues rely on seasonally higher traffic and sales. Consumers just simply stayed at home during this time.
Our retail business though continues to thrive with another 33% growth this quarter. Unfortunately, that wasn't quite enough to overcome the impact on our food service and frozen beverages but we're just delighted with the way that group is performing. As Gerry mentioned, we still improved our sales relative to prior year, we were down 19% in the fourth quarter, down 15% the prior year in the first quarter. I'm extremely proud again of what we are doing considering the environment we are in. Even with the COVID-19 sales headwinds, our balance sheet is strong and we have the funds and resources to invest in growing this business. We will remain aggressive in making strategic capital investments and driving innovation and efficiencies. We appreciate your interest in our company and I'll now turn it over to any questions that you might have. Thank you very much.
Questions and Answers:
Operator
And thank you. [Operator Instructions] And our first question online comes from Rob Dickerson. Please go ahead, your line is open.
Rob Dickerson -- Jefferies -- Analyst
Hi. Great, thank you. Good morning.
Gerald B. Shreiber -- Chairman of the Board, Chief Executive Officer and Director
Good morning, Rob.
Rob Dickerson -- Jefferies -- Analyst
Thanks, good morning. So I guess my first question is, I guess, around sort of cadence of the quarter. I think last quarter you had said maybe in the, kind of, let's say first four weeks, it looks like sales were down approximately 25%. Well, maybe they improved a little bit in November-December given the total Q4 results. However, you are saying there is some pressure in the holidays -- during the holidays. I'm just curious if you could just provide some color, if you saw things maybe improve a little bit or maybe improved less than you had thought and kind of like where things stand now versus kind of where you thought they could have stood just a few months ago?
Gerald B. Shreiber -- Chairman of the Board, Chief Executive Officer and Director
Right. Rob, your statement was really accurate. We did see a continual improvement as we came into the quarter and October and November held up pretty strong. And then we got into the holiday season and some of our key customers that we have that really count on that holiday times such as theaters or some of the mass merchandisers just did not perform as well as we anticipated during that particular time. And, of course, as you know, we also had another spike in COVID during these times as well and that didn't help in any way. But we're confident that that shopper will come back as those locations open back up and we think that this quarter will continue to improve again.
Rob Dickerson -- Jefferies -- Analyst
All right. Great, thanks. And then I guess secondly, I will admit, I was actually in a movie theater this past weekend with the family.
Gerald B. Shreiber -- Chairman of the Board, Chief Executive Officer and Director
Thank you. Rob, did you buy an ICEE and a pretzel? That's all I want to know.
Rob Dickerson -- Jefferies -- Analyst
Yeah, actually -- well, that was my question, is there a big beverage kind of top up that's in the store now, so it's easier to actually order and you can buy these massive ICEE frozen drink and I was just thinking, OK, well, obviously we've seen the news coming out of AMC the past couple days in terms of financing. There is still demand for movie theaters overall kind of longer term but then I think is there any way that you can adjust the strategy in terms of your offering, not just in some of these higher traffic areas, but just kind of overall, right, like hopefully movie theaters come back, hopefully traffic picks back up again, that's the expectation kind of across the board, but, yes, we've been in the cell long enough that I would assume as you sit down and think about kind of go-forward strategy and what some of your product offerings could be, you have to ask yourself a question, is there a way to adjust the offering somehow or just the strategy somehow? I don't know, maybe not. So I'm just curious as you think about that, are there ways that you can either adjust the strategy, maybe you can do bolt-on acquisition to kind of position in a more diverse way or maybe it's just a -- just sit it out, and basically wait for the traffic to come back. [Speech Overlap]
Gerald B. Shreiber -- Chairman of the Board, Chief Executive Officer and Director
No, you're kind of reading from our playbook, Rob. You're absolutely right. We are adjusting to look at other avenues outside of the theaters and are having some success with that. That's not a -- it's not a particularly quick fix because there is a period of time where you got to sell and then install and test. But we have some really good tests going on in the ICEE business right now. And that group and that sales group are really focused on other channels to grow our business within. And we think that we'll have success doing that, and along the way we believe these theaters will continue to open. But you're right, we can't sit back and wait for that, we have to go do something about it and that's exactly what we're doing.
Rob Dickerson -- Jefferies -- Analyst
All right. Great, thank you so much. I'll pass it on.
Gerald B. Shreiber -- Chairman of the Board, Chief Executive Officer and Director
Thank you.
Operator
And thank you. [Operator Instructions] Our next question online comes from Ryan Bell. Please go ahead.
Ryan Bell -- Consumer Edge Research -- Analyst
Hi.
Gerald B. Shreiber -- Chairman of the Board, Chief Executive Officer and Director
Good morning. Ryan.
Ryan Bell -- Consumer Edge Research -- Analyst
Hi, everyone. Good morning. Could you provide maybe a little bit more color about your assumptions and thoughts with the cadence of the improvement for the food service as we see the vaccines being distributed more? And then also, is there any way you could give a quarter-to-date sense for the performance improvement?
Gerald B. Shreiber -- Chairman of the Board, Chief Executive Officer and Director
No, Ryan, I didn't quite understand the last section of your question, it faded out a little bit, can you repeat that?
Ryan Bell -- Consumer Edge Research -- Analyst
Sure. The last part that I was asking was, quarter-to-date, how are the parts of your business doing? Is there maybe any number you could provide about the actual size of the improvement or how the decline is going quarter-to-date for the food service and the ICEE business?
Gerald B. Shreiber -- Chairman of the Board, Chief Executive Officer and Director
Quarter-to-date meaning quarter two?
Ryan Bell -- Consumer Edge Research -- Analyst
Yeah, through January?
Gerald B. Shreiber -- Chairman of the Board, Chief Executive Officer and Director
Ken, you want to touch on it?
Ken Plunk -- Chief Financial Officer
Interesting question. I think probably the right answer to that, Ryan, is, yeah, it's about the same. Think about food service was about 13% less than last year, that was an improvement versus Q4 where Q4 was 21% below last year. It's so early in Q2. I think in terms of your -- the way to think about it, your modeling, I'd probably still think around that 13% to 15% below the base year until we start to see more widespread access to the vaccine and a recovery of that. But it's still a bit early to say kind of gauge the entire quarter right now.
Gerald B. Shreiber -- Chairman of the Board, Chief Executive Officer and Director
This is Gerry. I'd like to comment, I assume a lot of you are -- may be most of you are sports fans but you remember the year 1994 when suddenly all of baseball went on strike and it did not recover until two years later, we're not having quite that impact in there. But basically so many of our venues were completely shut down and now they're opening up. Now we fully expect they will be back to last year's level in the next year or so.
Ryan Bell -- Consumer Edge Research -- Analyst
Okay, that's helpful. Would you maybe be able to provide some broad guidance or insights about the expectations for cost management throughout the balance of the year? I know that we're going to be lapping some significant declines last year, where the closures are being felt more poignantly. So is there any way we can think about the trajectory of gross margins throughout the year?
Ken Plunk -- Chief Financial Officer
Yeah. I mean, we point this out I think in the press release, particularly around gross margin. Those margins get challenged when the biggest contributors to your sales declines are soft pretzels, and ICEE beverages, both of which have some of the healthier gross margins. So when that mix changes, that has an impact on gross margin and until we see those businesses turnaround or continue to have a similar mix impact. The other thing, particularly as you look at Q1, Ryan, is, again, as we think about the magnitude or the impact of COVID, obviously, the more that heightens, the more that impacts our labor force. And when it does that -- and people are concerned about coming to work, we have to often look at ways to manage that labor in a different way and sometimes that's a little bit more expensive, whether that's temp labor over time just because of the concerns of ours is creating.
Dan Fachner -- President
Ryan, that certainly had an impact in our first quarter and it's something that we're working really hard at the remainder of the year to get a better handle on. But just as Ken has said, the labor shortage as we're all aware of out there, and then when COVID spikes again that increases. We're still certainly dealing with that issue and hope that some of those issues will go away as the vaccine gets more and more in place.
Ken Plunk -- Chief Financial Officer
Yeah. And then I'll also add, I mean, we spent $730,000 roughly on various health and safety matters around COVID that actually heightened from mid-November to the end of December with the virus getting worse. So that's what, $0.035 a share impact on expenses. And if you were to take that $730,000 out of our expenses compared to last year, we're much closer to leveraging. So I'm actually quite proud of the way we've pulled back on expenses as sales have come back, we actually took $6.6 million of expenses out in Q1, needed to take roughly $7 million out to stay leveraged with the prior year. And so you look at that as kind of a COVID impact. I think a way to think forward is as long as the virus is in the state as that, we're going to continue to spend probably roughly $150,000 to $200,000 a month on all the health and safety matters.
So that will be kind of a lingering impact on expenses until we kind of move past that. Otherwise, we're always sharpening our pencil, Ryan. When you look at the way business comes in, the way margins come in, Dan and I and the team are talking about kind of every rock that we can blow open to continue to get precise on where we can dial expenses back a bit more. But it gets complicated, when you have sales loss of that magnitude to calibrate down sales, still stay true to our long-term vision for the company and the unknown with the virus, dialing that perfectly is a challenge. But -- so I'd say short term for Q2, I expect us to get better expenses but it's going to be marginal I think as we continue to figure out how to manage through this COVID period.
Ryan Bell -- Consumer Edge Research -- Analyst
Thanks for all the color. And I think one last one from me, when you're thinking about capital allocation now, has anything changed maybe thoughts about acquisitions in food service versus in retail? And then maybe just a broader thought process about the M&A, it's landscape now versus prior to COVID?
Dan Fachner -- President
That's a great question, Ryan. We are working really hard at understanding capital allocation probably I think better than we ever have. And we've put together a good group that is evaluating each one of our plans and where we can best invest in ourselves to get the right kind of return and the right kind of savings from it. And so we're going to continue to do that and have done some things this past quarter that, again, I am really, really pleased with and I'm pleased with this group that we have put together and the way that we go about looking at it.
In regards to M&A, we're going to continue looking, we're looking today. We've had several conversations with different people, we're going to be careful about how we do it, but when we find the right one we're going to be ready and prepared, that's part of the advantage we have with the strong balance sheet and cash that we have is that we can be in a position to do that, and yet we want to do it wisely. And so we're doing that. And there's been some opportunities brought to us and we're going to continue to look until we find the right one. It may cause us -- to the second half of your question, it may cause us to take another look at retail where in the past, maybe, we didn't look at that as strong and we might look at that even closer now with some of the opportunities that are being brought to us. But, yeah, we're going to continue to be aggressive there.
Gerald B. Shreiber -- Chairman of the Board, Chief Executive Officer and Director
What I might add is part of the retail surge was due to the closures across the board in the Food Service group when you consider there was no sports, there was no leisure, the amusement parks basically shut or slimmed down, movie theaters. So that was a major, major impact. Fortunately, some of that spilled over because our franchises with SUPERPRETZEL and ICEE and whatnot are not only the leading brands but the leading brands with significant barriers to entry against anything that may be considered competing. We're going to continue to emphasize that and build on it.
Ryan Bell -- Consumer Edge Research -- Analyst
Great. Thanks for the question. That's it from me.
Dan Fachner -- President
Thank you, Ryan.
Ken Plunk -- Chief Financial Officer
Thanks, Ryan.
Operator
Thank you. Our next question online comes from Jon Andersen. Please go ahead, your line is open.
Gerald B. Shreiber -- Chairman of the Board, Chief Executive Officer and Director
Hey, Jon.
Dan Fachner -- President
Good morning, Jon.
Jon Andersen -- William Blair & Company -- Analyst
Hey, good morning everybody. Gerry, and congratulations. Dan and Ken. It's good to hear your voices on the call.
Ken Plunk -- Chief Financial Officer
Thanks, Jon.
Dan Fachner -- President
Likewise, yours too.
Jon Andersen -- William Blair & Company -- Analyst
A few questions. I'll start with just the sales cadence, I know it's been asked a couple of times, but I'll come at it from a different angle, I guess. As you look to the balance of fiscal 2021, we've had two quarters now both the fourth quarter of 2020 and the first quarter of 2021, where we've seen some sequential improvement in the -- the down trend has gotten more moderate. As you look forward through the balance of the year, do you expect that trend to kind of continue at the same kind of pace, kind of where do you or where do you expect maybe to kind of end the fiscal year coming out of the year? Any kind of color you can help us with there? And I know it's a very difficult question, in some ways an unfair question, but just looking for your impressions right now of how the next two or three quarters go with respect to sales trends?
Dan Fachner -- President
Jon, it's a great question and I'm glad you asked it. Our sales have continued to grow even during this COVID time as a percentage against prior year and we did that during this quarter as well and I would expect at this point that you'll see similar to where we're at right now on a go-forward basis. We have a lot of really good things going on underneath that I believe will continue to grow and boost up those sales. And then if we can get a lift from COVID, which is that great crystal ball, but if we can get a lift from that, the vaccination and some of the locations of food service both on the ICEE and the J&J side to open back up, we might even beat where we're at today. But we feel good about -- I mean, we also feel good about where we're at right now and what we think the rest of the year could look like.
Jon Andersen -- William Blair & Company -- Analyst
Okay.
Ken Plunk -- Chief Financial Officer
I'm sorry, Jon, I would second that. I think we're very optimistic on improvements and I think part of it, Jon, is you know customers and consumers are figuring out the best they can how to survive and manage and entertain themselves in this environment. So I think part of what we all see is people figuring out whether it's the mask wearing or the shields or whatever and people fighting for business, you see people gradually getting better and better and better at managing within that environment. So even if the virus doesn't respond quickly, I still think that people are going to continue to do that because I think they are tired of sitting at home and they're trying to figure out ways to do that and you've still got schools that -- a little over 50% who are still studying from home, but that is better than it was a few weeks ago. So more kids are going to school, but still a number relative is still not even 50%.
Dan Fachner -- President
And there really is that pent-up demand for people to get out and they're learning how to do that and we saw that even down at Universal Studios over the holidays where they had to shut the doors down because they maxed out their people three or four different days during that time of the year. So there is a pent-up demand and people are learning how to do it and we think that will get better throughout the year.
Jon Andersen -- William Blair & Company -- Analyst
Makes sense. You mentioned Dan earlier some of the things you're doing to maybe reorient the portfolio and take advantage of some opportunities given the kind of the backdrop, ICEE being one of them and finding new use occasions for ICEE, can you talk a little bit more about that specifically? What you're doing there and then also more broadly some of the new product activity that you're seeing and excited about? There is the handheld product, which sounds like it's performing quite well is one example, but just talk a little bit about some of the repositioning you're doing and maybe some new product activity or white space that you're going after in channels like healthcare or other areas you might be focused on?
Dan Fachner -- President
Yeah, I'd be happy to do that. So a few different angles there. First, I just want to reiterate how proud we are of the retail group that again had sales increase of 33% and one of the really promising things about that as you kind of recalibrate a little bit, is that our SUPERPRETZEL brand increased 41% in the quarter in the retail side. So that was just good to see, as well as our frozen juice and ice is up 52%. So we're doing some things within those areas that are growing to continue to see that growth continue to grow I guess. And then on the ICEE side when you ask about that, so certainly we have concerns about how long would this take for the theater group to open back up. We've had lots of conversations with them. We believe that it will open back up, but it's going to be slow and we believe there is a pent-up demand just like Ryan was saying earlier that he went this week. And I think there's people who want to get out there and see the movies. We just don't know how quickly that will happen. And so we really have tried to shift and put our focus on new sales and new channels. One of the areas that we believe is a natural for ICEE that is, in my opinion, a little bit underdeveloped is the whole fast casual or QSR side and so our guys are out there knocking on doors each and every day. And we have some tests in place that we hope that will come through. We have a lot of really good things going on on that side, we're making sure that we're redeploying any equipment that we have, trying to keep our capital down there so that we can use that capital to gain efficiencies on the J&J side, and so those are just some of the things when you ask about how we're pivoting. Those are some of the things that we're doing to pivot there. We also are working extra hardware, you've seen our service on the ICEE side grow quarter-after-quarter for a long, long time and much of that is just through word of mouth and reputation. And so we're actively now going out knocking on doors and trying to grow that business. We have a couple of really good things in the hopper there too. So it will be a long haul with that, but we're going to get there.
Product activity, as you mentioned, we're really happy with some of the new things that we have going on, we have that growth with the handheld, that was $10.4 million or 145% growth in the quarter. We see that continuing and in fact that's exceeding our expectations. We have a couple of other products that are going to be coming out in a couple places. We've seen good activity around the ICEE brand in our frozen novelty piece, we had talked about that before, where we now have the ICEE brand nationwide. And so how can we leverage that we're able to now leverage that in the frozen novelties and we think that will continue to grow. We've had some good interest in our core brand like CHURROS that we think might continue to have a boost throughout this year and so we're seeing some really good things. Jon. I look forward to it.
And then you asked, your final question was on the health side, and our food service in J&J is heavily focused on that. I think we had mentioned that we've shifted from several brokers to one broker on the food service side of the J&J business and in a call that I was in just two weeks ago getting a recap., that's the area that we identified as a potential hot growth in the J&J food service side and so we're working really hard on that health.
Bob Pape, you're on the line? Do you want to touch on that for a minute?
Bob Pape -- Senior Vice President, Sales
Yeah, I think really, I mean, we've been working on the data that we're now receiving to be able to pinpoint where our biggest opportunities are and as a result in the healthcare segment, for instance, we are now targeting the places that we know through our new information that we have the highest degree of success or volume that we can secure. And we've already had products that are tailored to that business and also our healthcare setting depending on what it is, are hospital. There are multiple opportunities within those hospitals to sell our products. So we feel very comfortable about that. Our healthcare business grew by 10% last year and we think that that could continue to grow.
Jon Andersen -- William Blair & Company -- Analyst
Great. That's terrific color. Thanks both of you. A last question I have is with the COVID impacting earnings over the last year or so, your dividend has gone flat after a long history of growth. So I'm just wondering, do you think -- is the Board -- is management and the Board at a point where they'll feel comfortable raising the dividend again? Will it be a year, will it be sooner? Do you have any thoughts on the dividend and when we could see hikes again?
Dan Fachner -- President
Yeah, Jon, I think that's a fair question. We had lots of conversation about it when we kept it at $0.575 and in a lot of ways we are proud to even keep it at that number as opposed to lowering it in some ways. There was discussion about whether we should continue to increase it, and I am sure that there'll be more discussion around that. I don't know that we have drawn any line in the sand that that's where it's going to stay. Is the potential for that to happen and increase? Yes. Can I predict exactly what the Board will think on that? No, but I do know there'll be lots of discussion around it and if we end up thinking that's the right thing for us to do as a company, that's what we'll do. We're continuing to build cash. And so that's certainly a way to use some of that.
Jon Andersen -- William Blair & Company -- Analyst
But would it be fair to say, and I don't know if Gerry might have a thought on this too, that as your business recovers from COVID, as earnings recover that your dividend policy, which has been to increase the dividend consistently year-to-year that that policy is still intact?
Dan Fachner -- President
Yeah, I'll let Gerry comment on that.
Gerald B. Shreiber -- Chairman of the Board, Chief Executive Officer and Director
Nothing is certain, of course, but we first started our dividends about 10 or 11 years ago, and we increased it every year for nine straight years, and I would use that as a benchmark for the future. We believe we're going to recapture the sales loss and we believe that in accordance with that, our earnings will grow. So you guys are smart. You guys have been following us, you know that we generally do what we say we're going to do. So I would put that in your models. It's not a for certain, but it's something that you can relax with.
Jon Andersen -- William Blair & Company -- Analyst
Okay and I kind of lied. I have one more question if I could squeeze it in, Gerry. I think there has been some inflation in certain input costs, maybe certain Ag inputs, maybe distribution, what are you seeing and how are you thinking about that and is pricing going to be necessary? If so, are you in a position to get pricing that kind of thing?
Dan Fachner -- President
I'll touch on the pricing and then I'll let Ken touch on the, the commodity pricing. In regards to the pricing, we're watching it really closely and what we can and can't do with the customers and, of course, we're in this COVID environment. So in some cases, you can take some price, in some cases it's really difficult. It's never an easy thing. We are taking some pricing on the ICEE side of our business and feel that we can do that. We are evaluating it really closely on the J&J side and we'll continue to work on it. And then, again, we are watching commodities closely. We've put together a group to do that and I know Ken just reviewed that. And Ken, I'll let you just touch on that.
Ken Plunk -- Chief Financial Officer
Yeah. I mean, I am sure you are seeing the same thing, Jon. And to Dan's point, it's something you have to monitor very closely and really look at kind of, I would say, consistency and is it up for a month and then back down. So it's something we monitor over time, and, yeah, there's areas where we are seeing those increases. We are also trying to look forward out even the next quarter. And depending on kind of the trend of how that plays out, we'll have to step back and decide what's the right thing to do in terms of passing that on. But we have got teams and resources, that's what they do every day. So I would just say, yeah, there's some increases, we are monitoring it closely and I think we are going to have to kind of make a call on it based on what we think is going to be the more longer term trends in some of that.
Jon Andersen -- William Blair & Company -- Analyst
Okay. Thanks so much for all the time and we'll talk soon. Good luck, guys.
Dan Fachner -- President
Thank you, Jon.
Ken Plunk -- Chief Financial Officer
Thanks, Jon.
Operator
Thank you. Our next question online comes from Todd Brooks. Please go ahead.
Dan Fachner -- President
Good morning, Todd.
Todd Brooks -- CL King & Associates -- Analyst
Hey. Good morning, everybody. Great to talk to you. Appreciate it.
Dan Fachner -- President
Likewise.
Gerald B. Shreiber -- Chairman of the Board, Chief Executive Officer and Director
Todd, this is Gerry. You are currently with?
Todd Brooks -- CL King & Associates -- Analyst
I am with CL King & Associates. Yes.
Gerald B. Shreiber -- Chairman of the Board, Chief Executive Officer and Director
You are researching so much closely and I want to congratulate you on not only understanding our business but developing some of the story lines too.
Todd Brooks -- CL King & Associates -- Analyst
Well, Gerry, I appreciate that. Thank you for that. Few questions this morning if I could. One, I was pleasantly surprised by the sequential improvement in the Food Service segment. And you did speak about some of the food service end customers in what's traditionally a strong holiday period seeing a drop off in December as COVID flared. And I am wondering if we can look at food service and talk about the growth or the sequential improvement that you saw, is this a sign that you are gaining market share with your existing customers or is it more a function of what Bob was kind of highlighting as far as new verticals, new customer doors being opened or a combination of both?
Dan Fachner -- President
Yeah. I think it's a good combination of both, Todd, and I think we are seeing -- I know we are seeing some good new customers come on and you highlighted it. It was encouraging to see us at 13% as opposed to 21% before. And so we're hopeful with that piece of the business that it's coming back maybe quicker than what might the ICEE side be coming back because it's not as heavily related into the theater group. And so, yeah, we are seeing an uptick in the business that we are doing business in and we are also gaining some ground in other areas.
Todd Brooks -- CL King & Associates -- Analyst
And Dan just to follow up there, where you are seeing market share gains with existing customers, is there any function of survivor bias that you are seeing in your industry or maybe smaller players are falling by the wayside or couldn't keep the service levels as high as they've traditionally seen and you guys are swooping in and grabbing that share?
Dan Fachner -- President
You know, what I think that's keeping up with the demand as the mix change is a challenge for everybody. I do like to think that our company might be stronger on that than others. We were fortunate -- and I am just going to highlight this one more time, we are fortunate that the business has been run so carefully in the past that we have a strong balance sheet that we didn't have to cut so deep that we are not able to keep up with the demands that are out there. And so I think that does play to our advantage, Todd.
Todd Brooks -- CL King & Associates -- Analyst
Okay. Great. Second question I had is, since we've all last gotten together on an earnings call, we've, obviously, had the announcement and approval to vaccines, the pace that they are giving in arms, we can all debate that. But once you got some color and your customers got some color around the certainty of vaccines and the approval, was there any change in your discussions with your customers as far as, OK, we don't know if this is going to be six months or eight months but this is what we want you to be ready to do. Did you see a change in kind of customer behavior and their ability to look forward planning-wise once the vaccines were released?
Dan Fachner -- President
Yeah. Sure, we did. And, again, fortunate that we didn't have to cut so deep that we couldn't have these sales people out in front of customers and they have been really good at doing that and getting in front of the customers and having strong conversations. And, sure, as the vaccine starts to get announced and people start to see some hope, that gives everybody some encouragement, which is exactly why we are where we are at today. We want to be careful that we don't make steps that prevent us from being able to gain that market share that we are doing today and in the future, and so, yeah, we are encouraged by it.
Todd Brooks -- CL King & Associates -- Analyst
Okay. Great. And then two questions on ICEE to wrap up my queries for the day. One, if we can talk about the -- you called out the loss of a service customer in the quarter and that that was the majority of the decline in revenues year-over-year on the repair and maintenance side. Is it just a periodic loss where you lost a business for this one quarter or was this a customer where that loss will carry forward now and we need to account for it for the next -- go ahead, sorry.
Dan Fachner -- President
No. I am sorry. I interrupted you. But I'll just repeat it. I'll just go forward anyhow. We probably didn't define that well enough. It was really the loss of a preventative maintenance program with a customer. So as we go through this COVID time in our service side of the ICEE business, some of our service is preventative maintenance contracts that we have. And one of the ways that customers have saved some costs during this time is to cut back on that preventative maintenance. Now at some point, I think that will tick back up and I also think that at some point they'll potentially get more service work because of the non-service business or PM maintenance.
Todd Brooks -- CL King & Associates -- Analyst
And Dan, just to follow up there. Sorry. Go ahead, Ken.
Ken Plunk -- Chief Financial Officer
I was just -- Todd, just to add, and the predominant impact of that was in the Florida region for this customer. So it's not nationwide. It's really in the Florida region they have made those decisions, and not a national impact.
Todd Brooks -- CL King & Associates -- Analyst
And these preventive maintenance contracts, are they annual contracts so all that impact hit here in the December quarter?
Dan Fachner -- President
They are typically a quarterly preventative maintenance program, right? And one of our major customers have shifted to a biannual preventative maintenance program.
Todd Brooks -- CL King & Associates -- Analyst
Okay.
Dan Fachner -- President
We have some preventative maintenance that we do through the theater groups and one of the larger theater groups are shut down at this point.
Gerald B. Shreiber -- Chairman of the Board, Chief Executive Officer and Director
Yeah. This is Gerry. And that might fall out, if we are providing service to a customer on a non-contractual basis, they are going to pay an hourly rate plus the time. Basically when we enter into a service agreement, it's to meet their needs so that they can project with their cash flows and whatnot.
Todd Brooks -- CL King & Associates -- Analyst
Okay. Great. And then the final question on ICEE and thanks for letting me get four in here. As you have been obviously COVID impacted in that business and running it in a tough volume environment, I guess have you found efficiencies or ways to run the business where as you think about what it takes from a revenue base to rebound back to kind of break even? Is it still in that kind of mid-$60 million range or what are you thinking for break even in the Frozen Beverage business?
Dan Fachner -- President
Yeah. I don't know if we have it defined quite like that. I will tell you we are continuing to find efficiencies and create reductions wherever we can in that piece of business. We are heavily focused on it. Ken and I sat down with that group last week and went through the numbers with a fine-toothed comb, and we are going to continue to do that. We -- our operational people, I would just say this, I am really proud of our operational people because they are working hard at reducing every spot that they can and I think they are doing a nice job with it. It's hard to keep up with the sales decline on that side and so we are continuing to watch that very, very closely. I don't know if we've defined the exact dollar amount though, and which it is to break even and when we do I hope that I can lower it, right?
Ken Plunk -- Chief Financial Officer
Yeah. And we really look at that from a P&L standpoint across the business. I mean, it's not just a ICEE isolated thing. I mean, we've got to look at the way our business model is structured. How do we kind of leverage expenses and manage those to an efficient level across the board. And I would just go back to the point I made, while we are continuing to kind of dig into everything we can. We did bring expenses down just under $7 million and that included an incremental $730,000 of COVID expenses. So, the team responded and as long as sales stay where they are at, we got to continue to work that muscle but I am actually quite proud of some of the responses I have seen.
Todd Brooks -- CL King & Associates -- Analyst
Okay. Great. Thank you all and I look forward to getting to the backside of this pandemic.
Dan Fachner -- President
Yeah. As do we, Todd. Thank you.
Operator
And thank you. Our last question online comes from Robert Costello. Please go ahead. Your line is open.
Robert Costello -- Asset Management Inc. -- Analyst
Hello.
Gerald B. Shreiber -- Chairman of the Board, Chief Executive Officer and Director
Hi, Bob. This is Gerry. How you been?
Robert Costello -- Asset Management Inc. -- Analyst
Good. Good. I have a couple of questions on the manufacturing facilities. One of your big C-store customers is building down in Florida, are we any closer to servicing them with on the bakery side?
Gerald B. Shreiber -- Chairman of the Board, Chief Executive Officer and Director
We are not. We are servicing them up here in the Northeast for all their bakery needs plus pretzels, plus frozen beverages. We are in constant communication with the group in that southeast region in here and we are looking forward to continuing those discussions. And basically what do we do, we grow our sales. We have been growing across [Technical Issues]. So we expect that area to fall in line over the next few years.
Robert Costello -- Asset Management Inc. -- Analyst
Right. On the number of facilities, you talked about rationalizing your costs and you got 18 warehouse in your annual report and 177 on the frozen foods -- to the frozen beverage side. Going forward, is that number expected to go down as you do this evaluation or do you think it's going to stay pretty much the same?
Dan Fachner -- President
I think it's pretty much the same as it is today, Bob. You know that we shutdown a plant up in the Chicago area earlier in 2020 and we have consolidated much of that into the plants that we are making today. So we are still making the same product that we were making before, but in the plants that we have now. I would not see that changing much in the near future.
Robert Costello -- Asset Management Inc. -- Analyst
Right. One other question. On your retail customers, is there any closures or any that you can highlight or you -- just not the name, but in general with the -- I was driving to work today and one pizza chain announced bankruptcy. Is there anything out there that we have to be aware of with regards to the customers' financial situation?
Dan Fachner -- President
Nothing than other what you would be aware of already. We feel pretty comfortable with our customers and who we've talked to. And if there was one channel that we have our biggest concern about that would be the theaters. And you are probably reading the same thing I am. AMC got some additional funding and I know their CEO was announcing last night that they believe that they are good through 2021. And so that would have been our biggest concern and it feels like that's cleaning up.
Robert Costello -- Asset Management Inc. -- Analyst
Right. Last question, on the bakery side I saw the pricing went up like on the doughnuts about 11%, 10% in the last three months to six months. Is that something you feel comfortable going for with higher commodity costs, you still have flexibility if the costs go up?
Dan Fachner -- President
Yeah. As Gerry's saying and I agree with him, yeah, that's typically the retailer who makes that decision not us, and so I can't really speak for them. We talked to commodities earlier and we are watching that really closely and we will continue to do that. But what you are referring to there was not our decision that was the retailers'.
Robert Costello -- Asset Management Inc. -- Analyst
All right. Thanks again.
Dan Fachner -- President
Thank you.
Gerald B. Shreiber -- Chairman of the Board, Chief Executive Officer and Director
You are welcome.
Operator
And we have no further questions at this time.
Dan Fachner -- President
Thank you very much, Richard. And thank you, everybody, for joining our call today. We really appreciate your interest in our company and look forward to getting back together with you in another three months.
Gerald B. Shreiber -- Chairman of the Board, Chief Executive Officer and Director
Take care, everybody.
Duration: 54 minutes
Call participants:
Gerald B. Shreiber -- Chairman of the Board, Chief Executive Officer and Director
Ken Plunk -- Chief Financial Officer
Dan Fachner -- President
Bob Pape -- Senior Vice President, Sales
Rob Dickerson -- Jefferies -- Analyst
Ryan Bell -- Consumer Edge Research -- Analyst
Jon Andersen -- William Blair & Company -- Analyst
Todd Brooks -- CL King & Associates -- Analyst
Robert Costello -- Asset Management Inc. -- Analyst
<<<
>>> J & J Snack Foods Corp. announces that SVP COO Robert M. Radano will Retire
Yahoo Finance
January 12, 2021
https://finance.yahoo.com/news/j-j-snack-foods-corp-211500223.html
PENNSAUKEN, N.J., Jan. 12, 2021 (GLOBE NEWSWIRE) -- J & J Snack Foods Corp. (NASDAQ-JJSF) today announced that Robert M. Radano, Senior Vice President and Chief Operating Officer will be retiring effective March 31, 2021 as Senior Vice President and Chief Operating Officer. Mr. Radano will remain with the Company for the remainder of the 2021 fiscal year. The Company has begun a search for a new Chief Operating Officer.
“The Company is thoroughly indebted and grateful to Bob for his many years of dedication and service to J & J. Shortly after graduating from Villanova University, Bob joined J & J in 1972 as a part-time truck driver and quickly rose through the ranks of the organization. Everyone within the Company is thankful to Bob for his contributions in building and growing the company. Naming all of his accomplishments would be impossible. Simply stated, Bob was integral to the business that J & J is today,” stated Dan Fachner, J & J Snack Foods Corp.’s President.
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, its 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. For more information, please visit http://www.jjsnack.com.
*MINUTE MAID is a registered trademark of The Coca-Cola Company
**SOUR PATCH KIDS is a registered trademark of Mondelez International group, used under license.
<<<
>>> McDonald’s Corporation (NYSE:MCD)
Ray Dalio - >>> 10 Best Growth Stocks To Buy Now According To Ray Dalio
Yahoo Finance
Sorina Solonaru
November 26, 2020
https://finance.yahoo.com/news/10-best-growth-stocks-buy-220447261.html
Next in the list of the best growth stocks held by Dalio’s Bridgewater Associates is McDonald’s Corporation (NYSE:MCD). It is a new addition to Bridgewater’s 13F portfolio, worth $77.02 million and consisting of 350,908 MCD shares.
Other hedge funds that see growth potential in MCD, currently trading at a trailing P/E ratio of 33, are Citadel Investment Group and D E Shaw with stock worth $205.7 million and $205.5 million, respectively at the end of September 2020. This is in contrast with the overall bearish sentiment towards MCD, as 14% less hedge funds tracked by Insider Monkey hold positions in the stock in Q3 compared to the previous quarter.
<<<
>>> Starbucks Corporation (NASDAQ: SBUX)
Ray Dalio - >>> 10 Best Growth Stocks To Buy Now According To Ray Dalio
Yahoo Finance
Sorina Solonaru
November 26, 2020
https://finance.yahoo.com/news/10-best-growth-stocks-buy-220447261.html
Next is Starbucks (NASDAQ: SBUX), the giant chain of coffeehouses and roastery reserves, valued at $115.3 billion. Dalio’s SBUX position was worth $47 million at the end of September after an incredible increase in holdings of 4524% in Q3. Clearly, Dalio has a tiny position in SBUX in Q2 and decided to build this into a full position.
Pershing Square Capital Management, which repurchased its stake in Starbucks in March, underlines the stock’s swift adaptation to the pandemic given its dominant position in the Chinese market. Here is what they had to say in their Q2 2020 Investor Letter:
"Despite short-term sales headwinds from Covid-19, Starbucks remains one of the world’s best businesses, which we believe will emerge even stronger from the current crisis. Starbucks results reported since we re-established our position have demonstrated that the company’s recovery plan is working. The company’s stock price has begun to reflect its business progress generating a total shareholder return of 39% from our average cost to repurchase our stake in the company.
Given the company’s leading presence in China, Starbucks was well-prepared for the arrival of Covid-19 in the U.S. After an outstanding start to the calendar year with same-store sales growth between 6% and 7% through mid-March, the company rapidly shifted to a drive-thru and delivery-only model. With 44% of the store base open, April same-store sales declined and bottomed at negative 65%. As management steadily reopened both locations and in-store ordering, same-store sales improved to negative 14% in July, with 96% of stores open. The sales recovery has been driven by store re-openings and underlying sales momentum, with same-store sales of stores open throughout the year improving from a low of negative 25% in April, to positive 2% in July. The recovery path in the U.S. closely parallels what Starbucks has achieved in China, albeit with a lag of about one quarter given the later arrival of the virus in U.S."
<<<
>>> McCormick to Acquire Cholula Hot Sauce
The $800 million deal will add to its Frank's and Old Bay brands.
Motley Fool
Howard Smith
Nov 24, 2020
https://www.fool.com/investing/2020/11/24/mccormick-looks-to-acquire-cholula-hot-sauce/
Spice and flavorings maker McCormick & Co. (NYSE:MKC) announced Tuesday will acquire the Cholula hot sauce brand. Known for its signature wooden bottle cap, Cholula has been owned by private equity firm L Catterton since April 2019.
McCormick said it will buy the parent of the Mexican-made hot sauce for $800 million in cash, adding to its lineup of well-known sauce brands. The company bought Frank's RedHot with its acquisition of Reckitt Benckiser's food division in August 2017. It also turned its Old Bay seasoning into a limited-edition hot sauce earlier this year.
Cholula is made in Jalisco, Mexico, and was introduced into the U.S. in 1989. It is now a global brand that comes in six varieties. The sauce has a relatively mild flavor with a heat rating of between 1,000 and 2,000 Scoville units -- a "Scoville heat unit" is a measure of the chemical in peppers responsible for their heat. By comparison, the well-known Tabasco brand delivers between 2,500 and 5,000 Scoville units.
McCormick said Cholula is projected to have sales of $96 million in 2020. McCormick chairman, president, and CEO Lawrence Kurzius said in a statement that "hot sauce is an attractive, high-growth category" that will add to the company's growth opportunities. He added that he expects Cholula sales to grow in the mid- to high single digits, which outpaces the overall category's growth rate.
The company said it expects the purchase will be accretive to earnings in 2021, while also bringing higher margins.
<<<
>>> Coca-Cola Moves Ahead With Big Strategic Reset
Many jobs, 200 brands, and the beverage giant's marketing strategy are all on the chopping block.
Motley Fool
by Rhian Hunt
Nov 25, 2020
https://www.fool.com/investing/2020/11/25/coca-cola-moves-ahead-with-big-strategic-reset/
Big beverage maker Coca-Cola (NYSE:KO) is advancing its plans for a major strategic makeover, first initiated in 2017, according to a report by The Wall Street Journal this morning. In an interview, CFO John Murphy said the economic conditions created by the COVID-19 pandemic amplified the need for the planned changes, which are now being implemented at a faster pace.
Coca-Cola intends to slash its total number of brands by 40%, reducing the lineup from the current 500 brands to approximately 300. This, the company asserts, will let it move resources to more profitable brands. New brands better tailored to current preferences and conditions will come online as the old ones are retired, though it seems likely the company will maintain a leaner brand profile going forward.
The enterprise is also continuing its job cuts, including the approximate 4,000 North American layoffs announced in August and an unspecified number abroad. It will also reduce its marketing spend, which, driven by digital advertising in particular, climbed to $4.24 billion in 2019. Murphy says the remaining changes should be rolled out in the next six months.
Coca-Cola has not rebounded as well from the March to April COVID-19 trough as many other companies have. Its third-quarter results showed a 9% year-over-year slump in revenue. The company is also likely to have to pay approximately $3.3 billion in taxes after alleged improper use of tax havens.
While Coca-Cola's restructuring efforts may clear away the deadwood and allow it to move forward with renewed growth next year, its future profitability and performance remain uncertain as it ventures into unknown territory.
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McCormick - >>> 5 Dividend Stocks That Have Had a Great Run and Are Just Getting Started
https://www.fool.com/investing/2020/10/29/x-dividend-stocks-that-had-a-record-year-and-are-j/
McCormick
Spice and flavorings leader McCormick is in a unique position to thrive in any consumer environment. With just over 60% of 2019 net sales coming from the consumer segment, and the balance from its flavor solutions group, the company has shown the ability to navigate the pandemic-driven economy with the help of its diverse customer base.
In its recently reported third quarter, the consumer segment continued to thrive from stay-at-home trends, with sales jumping 15%, while it also showed a recovery in its flavor segment, which supplies restaurants and packaged-foods makers. And investors can count on the dividend continuing to grow from its current level, too. McCormick is also a Dividend Aristocrat, having increased its dividend for 34 consecutive years.
<<<
>>> Nestle buys U.S. meal delivery group Freshly
MarketWatch
October 30, 2020
https://finance.yahoo.com/news/nestle-buys-u-meal-delivery-023916437.html
ZURICH (Reuters) - Food group Nestle on Friday said it had bought U.S. meal delivery company Freshly in a deal valuing it at $950 million, with further potential payments or "earnouts" of up to $550 million.
The purchase marks another deal for Nestle boss Mark Schneider, who has bought and sold around 50 businesses since taking over in 2017.
Under Schneider, the world's largest packaged food group has been moving into faster-growing areas like premium coffee and pet food and away from slower categories like mass market candy and bottled water.
Freshly is a weekly subscription service delivering cooked meals that can be heated in three minutes. Nestle said Freshly's 2020 sales were forecast at $430 million and it ships more than one million meals per week.
"Consumers are embracing ecommerce and eating at home like never before. It's an evolution brought on by the pandemic but taking hold for the long term," Nestle USA head Steve Presley said in a statement.
Nestle acquired a minority stake in Freshly in 2017, as the lead investor in a $77 million funding round.
Other players in the food delivery market include meal kit companies HelloFresh and Blue Apron Holdings and takeaway food groups Delivery Hero and Just Eat Takeaway.
The Freshly transaction was closed on Friday, the Swiss food group said.
<<<
>>> Is Brown-Forman Stock a Buy?
The maker of Jack Daniel's has stayed resilient throughout the COVID-19 crisis, but is there too much growth baked into its stock price?
Motley Fool
by Leo Sun
Oct 15, 2020
https://www.fool.com/investing/2020/10/15/is-brown-forman-stock-a-buy/
Brown-Forman (NYSE:BF.A) (NYSE:BF-B), one of the largest spirit and wine makers in America, has been a resilient long-term investment. Its Class A shares are thinly traded and mainly owned by the Brown family, but its non-voting Class B shares have rallied more than 80% over the past five years as the S&P 500 rose 75%.
In fact, after factoring in reinvested dividends, Brown-Forman generated a total return of nearly 100%. The stock also easily weathered the COVID-19 crisis, rising about 15% this year against the S&P 500's 8% gain. Let's see why Brown-Forman continues to outperform the market, and whether or not the stock is still worth buying.
How does Brown-Forman make money?
Brown-Forman's diverse portfolio of brands includes Jack Daniel's whiskey, BenRiach scotch, Finlandia vodka, Herradura tequila, Chambord liqueur, and Korbel wine.
It sells its products in over 170 countries, but 50% of its revenue came from the United States in fiscal 2020, which ended on April 30. No other country generated more than 5% of its total revenue last year.
Jack Daniel's is the company's largest brand, but it doesn't regularly break down its revenue by brand. Instead, it only reports each brand's year-over-year growth in sales and shipments.
How fast is Brown-Forman growing?
Brown-Forman's sales, minus excise taxes, rose 1% to $3.36 billion in 2020. Its sales decelerated significantly in the fourth quarter as the COVID-19 pandemic closed down restaurants, bars, and other businesses. Nonetheless, its underlying sales in the United States, which excludes estimated inventory shifts, rose 5% for the year. Its domestic resilience offset the broad weakness of its overseas business, which only generated higher sales in Germany, Japan, Russia, and Poland.
Its underlying whiskey sales rose 2%, thanks to the strength of Jack Daniel's and Woodford Reserve; and its tequila sales also grew 2%, led by El Jimador and Herradura. That growth was partly offset by weaker sales of wine, vodka, and other products.
Brown-Forman's gross and operating margins also contracted in 2019, due to higher tariffs in Europe, higher agave costs, and COVID-19 expenses. As a result, its net income dipped 1% to $827 million, or $1.72 per share.
In the first quarter of 2021, Brown-Forman's sales, net excise taxes, declined 2% year-over-year to $753 million. Its underlying sales rose in the United States and other developed markets, but declined across most emerging markets.
Its gross margin declined year-over-year, mainly due to lower sales of higher-margin products and high agave costs, but its operating margin expanded after it sold its Early Times, Canadian Mist, and Collingwood brands; reduced its expenses; and benefited from a favorable tax rate. As a result, its net income surged 74% to $324 million, or $0.67 per share.
Brown-Forman hasn't provided any guidance, but analysts expect its revenue and earnings to rise 1% and 12%, respectively, for the full year. Those are steady growth rates, but the stock isn't cheap at 40 times this year's earnings estimate. Its forward dividend yield of 0.9% also doesn't offer much downside protection.
Should you pay a premium for Brown-Forman?
Investors are likely paying a premium for Brown-Forman because it's remained stable throughout the pandemic, and its growth will likely accelerate after the crisis ends. However, Brown-Forman still remains richly valued relative to companies like Constellation Brands (NYSE:STZ) and Diageo (NYSE:DEO), which both sell beer, spirits, and wine.
Constellation, which is expected to generate less than 1% earnings growth this year, trades at 21 times forward earnings and pays a forward yield of 1.6%. Diageo, which is expected to post a 1% earnings decline, trades at 25 times forward earnings and pays a forward yield of 3.1%.
In short, Brown-Forman is a solid company trading at a wobbly valuation. Its P/E ratio is historically high, its dividend yield is historically low, and its near-term recovery remains uncertain due to a recent resurgence in COVID-19 infections. Therefore, I wouldn't buy this stock until it cools off to more sustainable valuations.
<<<
Hormel - >>> Worried About Another Coronavirus Sell-Off? Buy These 3 Safe Stocks
The pandemic is back in the headlines. Here's how to protect your portfolio.
MarketWatch
John Bromels, Scott Levine, And Lee Samaha
Oct 11, 2020
https://www.fool.com/investing/2020/10/11/worried-about-another-coronavirus-sell-off-buy-the/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
Last week ended with the concerning news that President Donald Trump had tested positive for COVID-19. This week began with the grim news that the U.S. had hit its highest daily coronavirus infection rate in two months.
As case numbers across the country continue to rise, investors are smart to be concerned. For those who are worried about how a second coronavirus sell-off might impact their savings, we asked three of our Motley Fool contributors which safe stocks they'd recommend. They came back with Hormel Foods (NYSE:HRL), Brookfield Infrastructure (NYSE:BIP) (NYSE:BIPC), and Ormat Technologies (NYSE:ORA). Here's why.
A conservatively run food company
Lee Samaha (Hormel Foods): This food company is definitely not your average publicly listed corporation. In fact, it appears to be run more like a private company. The Hormel Foundation -- a nonprofit organization set up by Hormel Foods founder George Hormel and his son -- owns 48% of the stock, with institutional shareholders holding 43%. The aims of the foundation are to preserve the company's independence, support the local community, and provide for the welfare of the heirs.
That means the consumer-staples company tends to be conservatively run, with very little debt. And it has a progressive dividend policy: Hormel is a Dividend Aristocrat, having raised its dividend for 54 consecutive years. However, the "safe stock" aspect to its attractiveness doesn't stop at the way the company is run, because Hormel's end markets are relatively stable too.
Slightly over half of its sales go to the U.S. retail market, with 31% to the U.S. food-service market, 10% to U.S. delis, and 7% to the international market. It's a good mix and has given the company resiliency during the COVID-19 crisis. For example, in Hormel's fiscal third quarter, strong growth in retail sales more than offset declines in its food-service sales (as restaurants were forced to close because of COVID-19), leading to 2.2% organic sales growth.
Thinking longer-term, Hormel is hoping its food-service sales will improve as the economy opens up again. In addition, management has made significant acquisitions and capital investments in recent years in order to boost growth. Meanwhile, the long-term case for the stock as a play on demand for protein remains: Pork products (including SPAM, Hormel brand, and Black Label) contribute 50%-55% of sales; turkey (Jennie-O) 18%-22%; non-meat (Skippy) 16%-18%; beef 8%-10%; and chicken and other products 2%-4%.
All told, Hormel is a useful stock for risk-averse investors looking for a dividend yield of nearly 2%.
Infrastructure: The gift that keeps on giving
John Bromels (Brookfield Infrastructure): Generally speaking, the more essential a business is, the "safer" its stock is likely to be. Hormel, above, was a good example: Regardless of what the stock market or the economy are doing, people have to eat. People also have to heat their homes in the winter, keep the lights on, and -- especially during a quarantine -- stay connected with the outside world. And Brookfield Infrastructure helps people around the globe do just that.
Brookfield Infrastructure is part of the Brookfield Asset Management (NYSE:BAM) family, and focuses on four areas: utilities, energy, data infrastructure, and transportation. It's no surprise that the first three of those four areas have not only managed to perform well during the pandemic, they have actually outperformed. The funds from operations (FFO) generated by those three businesses in the first half of 2020 were 8.3% higher than in the first half of 2019.
As you can probably guess, the company's transportation segment -- which owns toll roads, ports, and rail lines -- didn't do so well, as global travel ground to a halt during the height of the pandemic. Management expects this side of the business to recover in 2021. Investors can hop along for the ride by buying the company's shares of stock, with the ticker symbol BIPC, or units of its master limited partnership (MLP), with the BIP ticker. Either one will not only add some safety to your portfolio, but also provide a healthy yield of about 4.9%.
Sleep soundly with this low-risk energy stock
Scott Levine (Ormat Technologies): As global coronavirus cases rise dramatically and leaders implement lockdowns to curb the spread of the pandemic, it's unsurprising that investors are having flashbacks to the volatility which rocked the market last spring. Likewise, the interest in conservative stocks is equally understandable, as investors look to fortify their portfolios against future market turmoil.
For those who find themselves in this situation -- on the lookout for safer stocks -- Ormat Technologies is a name that's well worth considering. A leading global provider of geothermal solutions, Ormat has clear foresight into its future finances, as it often signs long-term power purchase agreements with customers.
In addition to geothermal energy, Ormat is also committed to expanding into the energy-storage market. Last April, for example, Ormat commenced operation of a 10-megawatt (MW) storage facility, Rabbit Hill, in Texas. More recently, in July, Ormat announced the acquisition of its first battery-energy storage facility, Pomona, in California.
While the company's past performance doesn't guarantee future performance, it's worth noting that over the past five years Ormat has provided investors with a total return of 97%, outpacing the 72% gain in the S&P 500.
In terms of its financials, Ormat has succeeded in steadily growing revenue over the past five years -- a period during which it has also increased EBITDA (earnings before interest, taxes, depreciation, and amortization) and operational cash flow:
Like many businesses, Ormat expects the impact of COVID-19 to adversely affect its top line this year. While its 2020 revenue forecast of approximately $718 million (which would be a year-over-year decline of about 4%) may give some investors pause, it's hardly an indication that the company is in peril. In fact, on Ormat's recent Q2 2020 earnings conference call, CEO Doron Blachar stated that the company is "on track to meet [its] 2022 megawatt growth goals" and it's "laying the foundation to enable us to continue our growth path in 2023 and beyond."
Besides its steady revenue and cash-flow generation, the company's circumspect approach to the dividend should appeal to cautious investors. While the modest forward dividend yield of 0.64% may not be much to write home about, the stock's average annual payout ratio over the past five years -- 19.3% -- suggests that management isn't willing to jeopardize the company's financial health in order to attract dividend investors.
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