Adding Stryve Foods as a new long
We are adding Andina Acquisition Corp. (ANDA) to our long list. Andina Acquisition Corp. is merging with Stryve Foods in a SPAC transaction. Stryve produces and sells biltong, an air-dried meat snack. Stryve’s product checks several boxes in current growth categories in food including snacking, better-for-you, no sugar, no carbs, and Keto/Paleo diets.
- Secular growth category. Snacking has secular growth drivers as more Americans consume a greater share of their calories from snacking.
- Stryve has nutritional advantages. Stryve’s biltong products are in the better-for-you category with no preservatives or nitrates, more protein per ounce, and no sugar (carbs). Traditional beef jerky has up to 10 grams of sugar per ounce.
- Popular diets are a tailwind. Keto and Paleo are two of the more popular diets currently. Stryve’s meat product without sugar fits well with both diets. Consumers' weight gains during the pandemic and increased snacking while returning to pre-pandemic work routines will be tailwinds.
- Stryve has significant distribution growth ahead. Currently Stryve’s products are only distributed in ~10% of doors compared to competitor products at ~60%. This year Stryve is being added in Dollar General, Target, Costco, and Wawa among others.
- Styve has a competitive moat. Stryve has the only USDA approved large scale facility to produce biltong. Biltong can not be imported into the US providing Stryve significant barriers to entry for the category. The company’s current capacity is $100M.
Stryve is early in its product awareness and distribution growth, but past the proof of concept and infrastructure investments. At the current share price just slightly above the $10 merger price we see asymmetric returns. At $10, the 1.8x 2022 EV/Sales multiple represents a significant discount to peer “disruptive food” companies (CELH, FRPT, BYND, OTLY, SMPL, LSF, VITL, TTCF). That gap should narrow as the merger closes and management executes upon its growth plan.
The merger details are as follows:
