Return to the office (ACI)
According to Kastle Office Systems, the average office occupancy of the top ten cities in the U.S. was 37.8% for the week ended November 3. The average occupancy increased 1.0% points from the previous week, as seen in the chart below. The New York metro area had the most significant week-over-week increase of 3.8% to 33.9%. A survey of major employers by the Partnership for New York City said that only 28% of Manhattan workers are in the office on an average weekday. The survey said 54% of workers are fully remote and 46% range some number of days during a week while only 8% are back in the office five days a week. By the end of January, the employers' expectations are for 57% of employees to be back in the office at least three times a week, while 21% will stay remote only.
No city saw a sequential decrease, but Washington D.C. and Dallas were flat. The Texas cities of Austin, Houston, and Dallas have the highest occupancy levels of roughly 50%. The lowest occupancy levels continue to be in the California cities of San Francisco and San Jose.
Wine in the capital markets (VINE)
Fresh Vine Wine filed a $15M IPO on Friday. The company is a producer of low-carb, low-calorie wines. The company has targeted the "better for you" category of wines. Fresh Vine Wine's bottles are priced between $15 to $22, at the premium end of the category where growth has been strongest. Actresses Julianne Hough and Nina Dobrev founded the company.
The Fun Wine Company has closed a $6M financing round, valuing the company at $90M. Fun Wine Company is said to be seeking an IPO in 2022. Fun Wine is a growing brand in the "better for you" category of wines. The company's namesake brand is targeting 150,000 cases this year, representing a growth of 194%.
Sycamore is exploring the sale of Stag's Leap Wine Cellars for roughly $1B just one month after purchasing it from Altria. The winery was part of the Ste Michelle Wine Estates portfolio that was purchased for $1.2B. High net worth family offices and private equity firms are said to have expressed interest in the winery.
2021 is the most active year for M&A and capital markets for the wine industry in many years, if not decades. Fresh Vine Wine would be the fourth wine IPO this year.
Event Invite (STKL & GO)
We are hosting a Research Roundup on Thursday, November 18, at 2 PM ET. We will revisit our investment thesis for SunOpta and Grocery Outlet. SunOpta (STKL) and Grocery Outlet (GO) are both on our long list. Both company's share prices have underperformed this year, with SunOpta down nearly 40% and Grocery Outlet down nearly 30%. We will review what happened during the year, what went wrong, and what went right. 2021 was still primarily driven by macro factors for the consumer staples sector, with more elements out of the control of management than what they can be held accountable for. We will also hold ourselves accountable and assess what thesis creep is or what part of the investment thesis remains the same.
More importantly, we will look out to 2022 and project what could improve or worsen the companies. We will examine the headwinds and tailwinds. Both companies are positioned to outperform in 2022 from a competitive as well macro perspective. The valuation of both companies also sets them up well to outperform when the headwinds subside.
Grocery Outlet is a grocery discounter that should have benefited from the shift to at-home meal consumption but not in 2021. The company's Q3 results show the light at the end of the COVID tunnel. Grocery Outlet remains one of the consumer sector's best square footage growth concepts in the digital era.
SunOpta is one of the largest suppliers of plant-based beverages, one of the best secular growth categories in how we will consume in the future. The company should have benefited from the growth of plant-based foods and the high-profile IPO of Oatly, a competitor, but the opposite happened. SunOpta's topline and margin visibility is not reflected in the current valuation.
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CLICK HERE for the webcast and materials at the time of the event. |
