Restaurants
First Watch pre-IPO Black Book (FWRG)
We are hosting a pre-IPO Black Book call on First Watch today at 12:30 PM ET.
First Watch is a daytime restaurant concept serving made-to-order breakfast, brunch, and lunch using fresh ingredients. Long before "farm to table" became a culinary mantra, First Watch incorporated fresh, quality ingredients into elevated executions of classic dishes. The company plans to raise $175 million by offering 9.5 million shares at a price range of $17 to $20. First Watch Restaurant Group would command a fully diluted market value of $1.1 billion at the midpoint of the proposed range.
ON THE CALL, WE WILL COVER:
- The current setup for the restaurant industry
- Growth Drivers & Footprint
- First Watch's differentiated daypart focus
- Unit Economics
- Peer Comparison
- Margin Leverage
- Income statement/Balance Sheet/Cash flow (estimates)
- Valuation
Consumer Staples
Whole Foods delivery fee change
Starting on October 25, Whole Foods implements a $9.95 delivery charge for orders placed through Amazon Prime. Previously free grocery delivery was a perk for Amazon Prime members who spent more than $35 on order. Whole Foods had tested the new fee in six markets over the summer. Most grocers charge a fee for delivery, but it varies between express delivery and membership fees. The change for Whole Foods is a clear indicator of the costs involved in the delivery.
Comparing summers for beer (STZ)
Off-premise alcohol sales decreased 7.0% this summer compared to last summer (week ended May 8 to September 11). However, sales were still up 14.2% compared to the summer of 2019. Beer, FMBs, and cider sales were down 7.6% last summer and up 9% to 2019. Core beer sales decreased 9.2% to last summer but increased 0.6% to 2019. Premium regular beer decreased 12.3% compared to last summer and decreased 6.9% to 2019. Below premium decreased 13.9% to last summer and 12.7% to 2019. Premium light beer decreased 12.2% to last summer and 5.9% to 2019. Cider decreased 13.6% to last summer and 3.2% to 2019. Craft beer sales decreased 12.8% to last summer but increased 3.4% to 2019. Super-premium decreased 7.8% to last summer but increased 10.9% to 2019. Imports decreased 0.3% to last summer but increased 13.4% to 2019. Mexican imports drove the category with a growth of 1.3% this summer and 14.4% compared to 2019. This past summer, hard seltzer had 11.3% of the beer category sales, roughly the same share as below premium and craft beer.
Tomato research study suggests the poor outlook for U.S. growers (APPH)
A new research study from the University of Florida projected a problematic future for tomato growers in the U.S. The study said if imports of tomatoes from Mexico continue to increase by 50% in the coming years based on historical trends, American tomato growers could lose $253M annually, representing 27% of current revenue. U.S. farmers grew 1.3 billion pounds of fresh tomatoes in 2020, down more than two-thirds from the harvest in 2000. Mexico now dominates the U.S. tomato market with more than three times the share of U.S. farmers. Florida tomato growers are the most impacted by Mexican imports because it has the same harvest season. The Florida tomato industry had $400M in sales. Mexico has become the primary source for vine-ripened round and Roma tomatoes during the late fall, winter, and early spring seasons. In addition, rising labor rates in the U.S. have raised the cost of harvesting, improving the advantage of Mexican imports. AppHarvest is investing hundreds of millions believing it can beat tomato imports from Mexico.
