Potato harvest report (LW)
According to the USDA’s November crop production report, potato production is down slightly in 2021 compared to the previous year. The U.S. potato crop is forecast to be down 2% to 412 million cwt. The 951,000 planted acres are up 1% from the June estimate and up 4% YOY. The yield forecast is down 23 cwt. to 438 cwt per acre. The harvest forecast for Idaho is down 2% to 132.1 million cwt. with yields down 7%. The harvest forecast for Washington is down 6% to 99.7 million cwt. with yields 12% lower. The potato harvest for Idaho was mixed depending on the region. The western regions of the state were challenged by warmer weather and smoke drift. Warmer weather can cause some potatoes to sprout, breaking down some starches. The eastern regions of the state have reported better yield results that are more in line with the prior year. Lower yields are a gross margin headwind for the potato processors like Lamb Weston, which lowered gross margin expectations on its last earnings call due to the warm weather.
MaxDelivery acquisition (SVOK)
Boxed.com is acquiring MaxDelivery, a New York City pure-play online grocer. MaxDelivery launched in 2004 and was one of the City’s first on-demand grocery services. MaxDelivery’s average order size of $100 differs from the competition. Delivery is free for orders over $125. MaxDelivery offers delivery in less than an hour from a selection of more than 10,000 grocery items. Boxed.com’s plans are for MaxDelivery to adopt its proprietary e-commerce technology and services for more scalable operations and expansion into more markets over time. MaxDelivery operates a 10,000 square foot warehouse in midtown. Boxed.com is merging with Seven Oaks Acquisition Corporation, a SPAC. Boxed.com expects to be listed on the NYSE as BOXD when the merger closes in Q4.
Grocery traffic rebounds in October (ACI)
Visits to grocery stores increased on a two-year basis over the summer for most chains, hitting a peak in August. Albertsons’ ACME banner saw the most significant increase in visits, with a 32.7% increase in August and a 26.6% increase in September, according to Placer.ai’s customer traffic tracker. Amazon’s Whole Foods banner has had the weakest traffic, with visits still down compared to 2019, as seen in the following chart. Visits in October have rebounded from the drop seen in September for most chains.
