U.S. beer shipments flat (BUD)
U.S. brewers shipped 169.2M barrels of beer in 2021, down 0.1% YOY according to the Beer Institute citing tax payments from the Alcohol and Tobacco Trade Bureau. Shipments in December decreased 4% to 13.9M barrels. Shipments were up each month in the first half of 2021 and declined in each month in the second half except for November.
Walmart invests in Plenty (APPH)
Walmart participated in Plenty Unlimited’s $400M Series E financing round. Walmart will join Plenty’s board of directors. The companies signed a long term commercial agreement that will allow Walmart to source Plenty’s leafy greens for all of its California stores starting later this year. Plenty is building a vertical, indoor farm in Compton, California which is expected to supply Walmart.
The press release said Walmart is the first large U.S. retailer to significantly invest in vertical farming. With the amount of supply coming on having a long term commercial agreement is probably more valuable to the vertical farm startups. Walmart’s equity investment is recognition that it understands the benefit of its commercial agreement for the startup. A number of grocers and distributors have made commercial agreements. The question is whether Walmart shoppers are willing to pay the premium for produce grown from indoor farms. Plenty, like most other vertical farm companies, has chosen the path of producing close to demand rather than in a central facility like AppHarvest.
Kroger’s digital usage (KR)
Kroger’s Monthly Average Users (MAU) of its app have been declining since anniversarying the pandemic. MAUs are down 18.5% YOY so far in January, a similar decline as in December. Kroger said on its last conference call that digital sales were up triple digits on a two-year stack and that 84% of its shoppers said they would continue to shop the same amount online in the future. Kroger launched three new digital offerings last quarter including Boost by Kroger, Kroger Delivery Now, and a strategic collaboration with Bed Bath & Beyond and buybuby Baby that do not appear to have changed the trajectory of usage declines. Kroger's investments into digital need to continue to grow beyond the pandemic usage in order to have a positive return.
Oatly’s ad slap (OTLY)
The U.K.’s Advertising Standards Authority published its findings on an investigation into Oatly’s “Help Dad” advertising campaign. The regulator ruled that four claims in the ad relating to its environmental impact vs. dairy milk were misleading and breached advertising rules. The ad included statements such as “Oatly generates 73% less CO2 vs. milk, calculated from grower to grocer,” and “The dairy and meat industries emit more CO2e than all of the world’s planes, trains, cars, boats, etc combined.” Since the ad is a year old it will have no direct impact on Oatly. Oatly’s current campaign of carton puppets reflects less direct environmental claims. Better for the environment or greenwashing may be a matter of opinion, but Oatly has been effective in its branding and claims while the dairy industry has been unable to respond successfully. It’s much like the political axiom, “If you’re explaining, you’re losing.”
