Insider secondary (NAPA)
The Duckhorn Portfolio announced that its controlling shareholder will sell 5.75 million shares including the overwrite at $19.50 per share in a secondary offering. The secondary represents ~5% of outstanding shares and slightly below 8% of the insider ownership. There is more to sell, a lot more.
Truck rates (UTZ)
Refrigerated truck spot rates fell 1.1% in June compared to May and were down 1.5% YOY. National weekly truckload volumes of produce are at the lowest level since 2017. This has altered the typical seasonality for reefer spot rates. In non-pandemic years reefer rates typically increase by $.18 per mile during June, but this year they have dropped by $.07 per mile. Van spot rates decreased 0.8% in June compared to May and were up 0.6% YOY. So far this year van spot rates have fallen 10% while contract rates are up 11% as seen in the chart below. Spot rates will impact contract rates in the future, but several unknowns including diesel prices and truck/driver capacity have kept contract rates elevated.
NY wine matchup (VWE)
The New York State Liquor Authority is considering changing a rule that would save money for independent restaurants and small liquor stores. The two companies most opposed to the rule change – Southern Glazer and Empire Merchants North, the wine distribution 800-pound gorillas, are significant contributors to the New York Governor’s campaign. The rule change being considered is split case fees. It allows distributors to charge additional fees if a customer does not want a full case of wine. Fees have risen in recent years and now can reach $30 to $40 per case. The Liquor Authority is considering limiting the fees at $7.39 per case, representing a savings up to 85%. It’s David vs. Goliath with the variety of wine at stake in New York.