Ending to-go cocktails (DEO)
New York Governor Andrew Cuomo ended the state of emergency on Thursday, which led to the expiration of delivery and to-go privileges granted to breweries, bars, and restaurants during the pandemic. In addition, on-premise businesses lost the ability to expand their service area to outdoor spaces beyond their licenses. Home delivery, to-go sales, and outdoor dining were often lifelines for bars, restaurants, and breweries during the pandemic. The sudden change caught the industry by surprise. The State Liquor Authority said, “The SLA understands the suddenness of this decision by the governor. You shouldn’t worry about a crackdown occurring immediately, but you should make plans to adjust accordingly.” Businesses can apply for on-premise licenses to keep delivering alcohol. Beer distributors in New York have concerns that a large shipping company like Amazon will ship beer directly to consumers. Packaged goods stores would like to see the on-premise laws revert to how they were pre-pandemic. Numerous states are deciding on whether to continue their on-premise alcohol laws that were changed during the pandemic. Roughly 38 states currently allow to-go cocktail sales. Colorado, Rhode Island, and Pennsylvania have recently made extensions of the pandemic laws or voted on it. According to the National Restaurant Association, 89% of restaurants in states that allowed it sold to-go alcoholic drinks. The Association estimates to-go sales add 5-10% to a restaurant’s overall sales.
Scratching the plant-based meat surface (BYND)
After disappointing sales of its plant-based burger, Burger King Sweden created a menu item that featured a plant-based burger or a meat burger. Customers had a 50% chance of getting either, but they had to scan the box to find out. 44% of customers were wrong about what they were served. Finding the right balance between taste, texture, aroma, and protein content is incredibly complex, but plant-based meat products have come a long way in imitating meat. Currently, commercially available plant protein ingredients come from 2% of about 150 plant protein species used for food supply. There are a myriad of startups researching different plants, proteins, and lab-cultured meats. Based on the number of new companies, the size and frequency of investments, and large companies redirecting R&D towards the sector, we are likely in the first or second inning of meat alternatives.
Return to the public markets (DNUT)
Krispy Kreme is returning to the public markets this week. In the five years it was private, the company repurchased franchisees, rolled out fresh doughnuts delivered every day to grocery and convenience stores, and swapped out the shelf-stable product previously sold in mass and grocery stores. The new snack product was rolled out to Walmart last year, where it has gained share. We are presenting our pre-IPO black book today at 12:30 PM ET.
CLICK HERE for a live webcast and materials at the time of the event.
