Call Replay (STKL GO)
We hosted our Research Roundup call on Grocery Outlet and SunOpta yesterday. Our investment themes for Grocery Outlet were:
Our investment themes for SunOpta were:
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For the replay and materials, CLICK HERE. |
Starbucks seeks to reduce dairy’s carbon emissions (SBUX STKL)
Starbucks and Arla are collaborating on a three-year test to create a framework for sustainable sourcing for the dairy industry. Arla Foods is a co-op made up of 9,400 dairy farmers and claims to produce milk with half the global average emissions. Dairy comprises 22% of Starbucks’ global carbon emissions. In the UK, the two companies will work with 14 Arla farmers to identify new farming practices and methods to reduce carbon emissions associated with dairy production. The Nature Conservancy will also support the test. Starbucks set out a sustainability goal to reduce carbon emissions by 50% by 2030.
Methane is a significant contributor to the greenhouse gases associated with dairy production. Increasing plant-based milk is a much easier way to achieve the carbon goals, but the dairy industry has to do something. Consumers are increasingly shifting to plant-based milk for environmental reasons. We explored this topic and what Starbucks was doing in oat milk in our SunOpta call yesterday.
California grape harvest (VWE)
With most of the grapes harvested, California is estimated to produce 3.7 million tons this year. It is a smaller than average crop but larger than the prior year. There are shortfalls in some varietals, and the Napa region was light on the production. Bulk wine inventories are approximately where they were last year. Grape quality appears to be excellent throughout the state. This year’s California wine harvest should be a relief for the industry compared to prior bumper crops or smoke-tainted crops. Increasing costs and more capital entering the industry may lead to further consolidation. Vintage Wine Estates’ growing wine club business is positioned well for the vagaries of harvests. The wine club can promote other areas when the grape harvest is poor or small in quantities in one region.
