Staffing shortages (TSN)
"Labor shortages continue to be our most pressing issue... Staffing challenges, however, have hindered our ability to achieve the ideal product mix with efficient processes."
Cereal strike enters the 4th week (K)
Kellogg called for the union to resume negotiations and said it would consider new proposals as the strike entered the fourth week. Kellogg said it was willing to discuss the two-tier employment systems consisting of transitional and legacy workers, which has been a sticking point in negotiations. The union agreed to return to talks next Tuesday. All 1,400 workers at Kellogg's U.S. cereal plants are on strike. Workers who are on the picket line receive $105 a week from the union. Production at the plants has resumed with salaried employees and outside workers. The Nabisco strike by the same union lasted four weeks.
Dairy category sales (STKL)
In the year ended September 5, sales of the entire milk category increased 0.6%. The largest dairy segment – refrigerated low-fat milk sales declined 2.8%. Whole dairy milk sales increased 1.2%. The dairy category is seeing growth in specialty products. Fairlife milk, one of the largest ultra-filtered brands, grew 21.3%, while Lactaid, the largest lactose-free brand, grew 9.5%. Plant-based milk continues to take share. According to IRI, sales of almond milk in U.S. multi-outlets grew 2% to $1.5B over the same time frame. According to Mintel, approximately 40% of U.S. adults purchase almond milk, not far behind regular dairy milk. Oat milk sales reached $350M, up 95%. Soy milk, on the other hand, declined 8.4%. Refrigerated coconut milk declined 6.3%. In 2020 nearly half of non-dairy milk consumption was motivated by household allergies or intolerances. In 2021 that motivation fell to #5 while health perceptions and plant-based eating goals moved ahead. Oat milk is well-positioned to overtake almond milk as the number one plant-based milk, but it will take several years. Oatly is a crucial driver of that growth, but SunOpta is a better stock to invest in that future growth.
For a replay of our Oatly pre-IPO review, CLICK HERE.
Robusta coffee hits ten year high (SJM)
Robusta coffee prices have hit ten-year highs. Dwindling supplies are due to higher demand, poor weather conditions in Brazil (the largest producer), port congestion, and higher shipping costs in Vietnam (the second largest producer). Robusta coffee beans are generally used for instant coffee like J.M. Smucker's Folgers brand.
