Oat Milk Consumption
Blue Bottle Coffee is trying an interesting experiment. The chain offers oat milk as a default option in its beverages to see if it helps slash its dairy-driven carbon footprint. Earlier this year, the chain piloted the oat milk initiative at three California locations and found that it was ordering 8% less cow's milk in three months. In addition, after five months, 75% of milk-based beverage orders at Blue Bottle's pilot cafés called for plant-based milk. The success of this pilot program has led Blue Bottle to expand the effort to all of its Southern California cafés, which make up more than 25% of the chain's total locations in the U.S.
"At Blue Bottle, we estimate dairy to be a leading source of emissions from our café operations. To lower these emissions, we sought the opportunity to go plant-based and reframe what it means for a choice to be 'alternative,'" the chain explained in a blog post. "Ultimately, we hope by providing more people the experience of oat milk, we might drive higher uptake [of the plant-based milk] both at our cafés and home with guests so together we can reduce our greenhouse gas footprint from dairy."
Burger King CMO Leaves
QSR is a SHORT
Burger King's North American CMO Ellie Doty has left the brand. Ms. Doty was the first person to hold the position when she joined the chain in June 2020. "Ellie made the personal decision to leave the Burger King brand," per a statement from parent company Restaurant Brands International (RBI), which Adweek first reported. "We appreciate her many contributions to the brand and look forward to seeing what she accomplishes in the next chapter of her career." Since July, Doty, who had been leading Burger King's U.S. and Canada business on an interim basis alongside Chief Operating Officer Tom Curtis, has become the latest marketer to exit the chain, which has seen its growth lag behind that of competitors. Yosef Hojchman, who has 15 years of experience with RBI, will become interim CMO.
The current marketing and promotional success that MCD is enjoying is not making life easy for Burger King.
U.S. Foods
U.S. Foods (USFD) is looking to hire a chief operating officer and replace its CFO as it gets pressure from an activist investor. Activist Sachem Head disclosed last month that it had acquired a 5.1% position in the company and intended to "engage in discussions" with U.S. Foods management about its business and future. Sachem Head said it is being advised by food industry veteran Bernardo Hees, who was until 2019 the CEO of the Kraft Heinz Co (KHC.O) - the stock is up 11% so far in November. Today, USFD is trading higher after posting a mixed Q3 earnings report that included a revenue beat and a slight EPS miss. Total case volume increased 18.5% during the quarter, and adjusted EBITDA was up 39.2% to $291M. The company says the increase in case volume and sales during the quarter was primarily driven by increased leisure and business travel and continued increased restaurant traffic. Food cost inflation of 11.5% also provided a benefit to USFD during the quarter. Adjusted gross profit improved to $1.3B vs. $1.0B a year ago, primarily driven by increased total case volume and product cost inflation. "While supply chain headwinds persist and are expected to continue into 2022, we're pleased to see tangible and enduring signs that the industry is recovering, which allows us to refocus our energy and resources on our Great Food. Made Easy" - CEO Peitero Satriano. On the balance sheet, USFD ended the quarter with net debt of $4.6B and a ratio of net debt to adjusted EBITDA of 4.8X vs. 7.6X a year ago.
We are heading into a seasonally weak period for USFD which might make for an interesting setup in 1Q22 to be LONG. More work to do.
