Removing SAM from our Shortlist
Nearly a year ago, we added Boston Beer to our Best Ideas shortlist. We outlined our concerns that hard seltzer was a COVID-19 beneficiary, that product shortages would lead to excess supply, and that competitive intensity would increase. As a result, we are now removing Boston Beer from our shortlist. We see the risk/reward as evenly balanced from here.
The hard seltzer category had been the biggest game-changer to beer since craft beer decades ago. What took craft beer three decades to reach, hard seltzer did in a little over three years. The growth has been phenomenal, but is it over? Was it a fad? Or is it a pause before resuming further growth? We will provide an update to our hard seltzer Black Book from a little over a year ago, the competitive landscape, and our future projections.
Fresh meat price increases impact volumes (TSN)
US consumers spent $14.38 per grocery trip on fresh meat in the first nine months of 2021, down 0.7% YOY. According to the September CPI report, retail prices for beef and veal were up 17.8%, pork was up 12.7%, and the chicken was up 7.6%. As a result, 98.1% of US households purchased fresh meat at retail stores at some point during the first three quarters of 2021, down 0.5% points. The most substantial sales were in fresh pork sales, up 9.9% and 23.1% on a two-year stack. Beef sales were up 6.1%, while fresh poultry sales were up 6.6% and 27.7% on a two-year stack.
Real Good Foods (RGF)
Real Good Foods is expected to go public on Friday, offering 5.3M shares between $14 and $16. Real Good Foods develops, markets, and manufactures comfort foods that are high in protein, low in sugar, and made from gluten and grain-free ingredients. The products are sold in the wellness section of the frozen food department of grocery stores. CEO Gerard Law was previously the SVP of the Snack Foods division at J&J Snack Foods. The float will be roughly 20% of the shares. The IPO comes at an early stage as the company is still reporting operating losses. It does not mean the shares are coming at a discount either 6.6x sales
