Restaurants
CMG
Chipotle is adding smoked brisket to its menus nationwide following a successful test conducted last year. The company said it's one of the most requested menu items and will go on sale Thursday. However, members of the chain's growing rewards program can get it two days early — beginning Tuesday — if they order through its website or on the app. Chipotle described the brisket as "smoked to perfect tenderness" and seasoned with a blend of spices and a Mexican pepper sauce. It's also topped with a new sauce made with smoked chili peppers. The company said it took two years to develop a recipe that's "uniquely Chipotle."
Pandemic weight gain among children (DNUT)
According to a CDC report published on September 17, the Body Mass Index (BMI) for people aged 2 to 19 years old approximately doubled during the pandemic. The CDC examined the medical records of 432,302 individuals for the study. People in the age group gained weight at a rate of 8 pounds a year more than a healthy weight. People who were overweight before the pandemic and younger school-aged children experienced the most significant increase in BMI. Children aged 6 to 11 years old experienced the most significant increase in their BMI. The portion of 5 to 11-year-olds classified as overweight or obese is now 45.7%, up from 36.2% pre-pandemic. Obesity is a serious health concern affecting more than one in every six children. The CDC notes that obesity is tied to type-2 diabetes, hypertension, and depression. The CDC website discloses the mortality rate from COVID-19 for children between 0 and 19 years old is .0006%. Earlier in the month, Krispy Kreme ran a promotion offering two free donuts to anyone who can show their vaccine card. Maybe rewarding vaccinations with free donuts is not the way to go?
Consumer Staples
Postponed earnings (VWE)
Yesterday, Vintage Wine Estates postponed its FQ4 earnings report scheduled for Wednesday, a day later. The company now plans to release earnings on September 29. Vintage Wine Estates cited personnel shortages and turnover for the need for more time. The CEO said, "While we had an excellent Q4 with strong demand in each of our three major market channel platforms, we have had to address personnel shortages." On Monday, the company announced the retirement of COO Jeff Nicholson, who Russell Joy will succeed. Russell Joy was most recently the General Manager of Napa Wine Company. In addition, the company announced preliminary sales of $57M in FQ4, $10M above consensus expectations. A delay in earnings is not particularly unusual for smaller, recently public companies.
Higher Robusta grounds (SJM)
Robusta, the cheaper coffee bean used in instant coffee, prices have doubled since last summer. Robusta coffee prices have been surging since a cold snap in Brazil's coffee-growing regions damaged crops in July and August. This was compounded by droughts in other areas damaging Arabica beans. Vietnam is the second-largest producer, but the shortage of shipping containers, higher freight costs, and port congestion has made it more difficult to source beans. J.M. Smucker, a large buyer of Robusta beans, owns coffee brands including Folgers and Dunkin'. On the last conference call, J.M. Smucker took up its expectations for inflation from mid-single digits to high-single digits.
Alcohol platform reaches a $750M valuation.
Provi announced that it raised $100M in two funding rounds in 2021. Provi is an online alcohol ordering platform that connects retailers and wholesalers. It enables the restaurants and bars to quickly order all of their alcohol needs on one platform and manage inventory. A Series B funding round raised $25M earlier this year. In addition, the company raised $75M in a Series C funding round, valuing the company at $750M. The company noted that the valuation increased 3.5x over the past six months. The new capital is marked for scaling the platform and hiring more staff. Provi's platform services 10% of bars and restaurants in the U.S. and is on pace to grow its share to 25% by the end of next year.
