Restaurants
MCD/BYND
BYND is a SHORT
According to Restaurant Business, McDonald's plans to run a small operations test of the Beyond Meat (BYND) McPlant burger at eight locations in different parts of the U.S... The test is expected to run until the early part of December. The test locations are Irving, Texas; Carrolton, Texas; Cedar Falls, Iowa; Jennings. Louisiana; Lake Charles, Louisiana, El Segundo, California and Manhattan Beach, California. It will be the first test by McDonald's (MCD) in the U.S. of plant-based burgers. So what is in the McPlant? "The patty for the McPlant is made from ingredients like peas, rice, potatoes, and beets. It is served on a sesame seed bun with tomato, lettuce, pickles, onions, mayonnaise, ketchup, mustard, and American cheese."
The sandwich will not be vegan since it will be made on the same grill as meat burgers and cheese. Therefore, operational issues will arise as MCD has no choice in this matter and will limit the burger's success.
Consumer Staples
Return to the office (KR)
Kastle Systems' ten city occupancy average increased to 36.1% for the week of October 6 from 35.0% in the prior week. Kastle's occupancy barometer reflects access swipes to the office; it provides control systems to 2,600 buildings in 138 cities. Occupancy levels have steadily improved since the Delta variant in August, surpassing the highs of the summer. All ten cities had a sequential increase in occupancy rates. The largest improvement came from one of the cities with the highest occupancies and the lowest occupancy. Austin had a 2.5% improvement over the prior week to 51.1%, and San Francisco had a 1.9% improvement to 24.4%. JLL reported that office leasing volume increased 7.8% sequentially in Q3.
The New York metro area had a 0.7% improvement to 29.6%. Office leasing activity in Manhattan improved to its highest pandemic level in Q3, according to CBRE. Leasing activity increased 70% over Q2 but was 5% lower than the five-year quarterly activity average. In Midtown, financial services companies are driving the leasing activity. Class A net effective rents decreased 9.2%, boosting leases. The availability in Midtown, Midtown South, and Downtown range between 17.7% to 20.9%. Asset prices are also 16.2% lower than in 2019.
UnSPACing (SV)
AeroFarms and Spring Valley Acquisition Corp. have mutually agreed to terminate their business combination. Neither party will have to pay a termination fee since it was a mutual agreement. Spring Valley intends to pursue another merger candidate. We are removing Spring Valley Acquisition Corp. from our position monitor since the merger is not going forward. We view its termination, and the poor investor interest in another indoor grow company as a negative for AppHarvest.
Private placement (COCO)
Through an affiliated entity, plans to purchase $20M in shares of Vita Coco at the IPO price from Verlinvest Beverages in a private placement. Next week, Vita Coco plans to go public, offering 11.5 million shares (9 million from existing shareholders) between $18 and $21. 5% of the shares are reserved for customers of Robinhood. Keurig Dr. Pepper is Vita Coc's largest distributor customer at 19% of sales. While Vita Coco effectively competed against much larger entrants like Coca-Cola, the coconut water category was still below the peak in 2016.
