Restaurants
Just EAT
After a very underwhelming analyst meeting, not surprisingly, Cat Rock Capital (holder of 13.8M shares or 6.5% in Just Eat Takeaway.com) sent a letter to the management/board pushing back on the company strategy. Cat Rock urges the announcement of a sale or spin-off of Grubhub by year-end to refocus JET's business and address the deep and damaging undervaluation of the Company's equity. Also, not surprisingly, the Company responded so that it could only make most shareholders angry. The Company has explained that, "while Grubhub has some specific challenges today, it is a large and growing business with good underlying profitability. The Company has a clear improvement plan to refocus Grubhub on key strongholds, expand new verticals, and is excited by Grubhub's potential." (We would ask where is that plan?)
Management also reiterated that it would be a participant in the consolidation of the broader US market as various players combine to optimize last-mile delivery. "The Just Eat Takeaway.com management team expects to be involved in this consolidation when it comes and intends to do so from a position of strength that reflects the strategic value of Grubhub."
What consolidation of the US market is the management team referring to, with UBER, DASH, and GRUB controlling 90% of the market?
Consumer Staples
Plant-based meat (TSN)
Danish Crown, Denmark's largest beef and pork producer and one of Europe's largest meat producers, admitted that it failed to recognize the importance of the plant-based trend. The Company's CEO, Jais Valeur, said that the Company would not make the mistake of overlooking vegan meat again. "It has become clear to me that the way one consumes and thinks about meat is going to change markedly in the coming years." The CEO believes beef, in particular, will be regarded as a luxury and only be eaten in small quantities in the future. As a result, Danish Crown will ramp up the production of plant-based meat as part of its goal to cut its carbon footprint by half by 2030. It's telling when the CEO is repudiating the Company's product. With seemingly every food manufacturer expanding their production of plant-based meat, it will be commoditized like animal meat. We are hosting a Beyond Meat flash call on November 2 at 10 AM ET.
Out of stock for Thanksgiving (KR)
IRI reported that its supply index continues to worsen ahead of Thanksgiving. Out-of-stock rates for five Thanksgiving-related food categories continue to worsen. The availability of whipped toppings, liquid gravy, frozen and refrigerated pies fell 5 to 11% points for the week ended October 19 compared to the prior year. Compared to the recent two-month average, the in-stock level is 1-9% worse. The lowest in-stock levels in the general food category were in cookies and crackers at 84%, baked goods at 84%, and snacks at 85%. Sports/energy drink in-stock levels in beverages were worst at 81%, juice at 82%, bottled water at 83%, and carbonated drinks at 84%. Higher out of stocks reduce promotions and are a benefit for conventional grocers. Retailers have 1-9% fewer promotions in the five Thanksgiving categories compared to the prior year. Prices for the categories are 3.6% higher YOY. We explained what is happening in the grocery stores in our Black Book update last week. CLICK HERE for a link to the replay and materials.
Co-CEO Resignation (SNAX)
Stryve Foods (SNAX) announced that Co-CEO and CMO Jaxie Alt would resign from her roles to pursue other career opportunities, effective November 17, 2021.
After November 17, 2021, Ms. Alt will be retained in an interim capacity working on key strategic initiatives for the Company to pursue its growth objectives.
Mr. Joe Oblas will continue to serve as the CEO going forward. Co-CEOs have not often worked out in our experience. However, it appears she is leaving on amicable terms. Stryve Foods is a small company that has been leading on marketing but has to prove that it can execute upon the opportunity in front of it.
