BLACK BOOK TODAY (MNST)
Energy drinks have the best secular growth prospects within the broad beverage category. Driven by lifestyle trends, health & wellness, taste preferences, and demographics, energy drinks have at least a decade of growth ahead. Behind the category's growth are caffeine and its spreading presence in beverages. Although it is less addictive and habit-forming, caffeine has become part of consumers' lives. As a daily consumption choice, consumers actively identify with their brands. Monster Energy is one of the leading brands in the energy drink market. Monster Energy has missed consensus expectations for the past four quarters. EPS has also declined for four consecutive quarters. We do not expect either to change this quarter. However, we see a coming inflection in margins and reasons to buy the shares before another re-rating in the multiple. Monster Energy has entered the beverage alcohol sector for the first time with the acquisition of CANarchy. A merger with Constellation Brands is off the table, but questions remain. The next move up for the share price does not need a successful entry into alcohol; it will be despite it.
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CMG - The pace of testing and rolling out new products in quickening
Chipotle Mexican Grill is rolling out the new Garlic Guajillo Steak on Wednesday at units throughout the U.S. and Canada. Last month, Chipotle said it had begun stage-gate testing the new Chicken Al Pastor, marinated in adobo, Morita peppers, and achiote with a splash of pineapple.
In yet another partnership with gaming site Roblox, Chipotle said it is the first restaurant chain to unveil a new menu item in the metaverse officially. They are starting at 7 a.m. Pacific on Tuesday, guests were able to use a Burrito Builder Simulator within the game to unlock a code to earn a free steak entree. Chipotle's 30 million Rewards members also had early access through the chain's app and website. Analog guests and those still stuck in Web2 had to wait another 24 hours. The Roblox simulator is designed to "enhance guests' tasting experience in real life," according to press materials. The simulator draws attention to Chipotle's cooking process and, hopefully, creates a craving by allowing guests to taste what the chain calls a "flavor aura virtually." It's not the first time Chipotle has tapped into the Roblox community. The chain brought its annual Boorito program on Halloween to Roblox for the past two years, hitting new records for digital sales and reportedly causing a two-day Roblox outage in 2021. And in April 2022, Chipotle launched a burrito building simulator on Roblox for National Burrito Day. "By launching Garlic Guajillo Steak in the metaverse, we are able to share our culinary traditions and real food proposition with Gen Z," said Chris Brandt, Chipotle's chief marketing officer, in a statement. Available for a limited time, Garlic Guajillo Steak was tested in Denver, Indianapolis, and Orange County, Calif., earlier this year. The steak is spiked with garlic and guajillo chiles and finished with fresh lime and cilantro. "We're listening to our guests' requests for intriguing new flavors," said Nevielle Panthaky, Chipotle's vice president of culinary, in a statement. "Garlic Guajillo Steak pairs the familiar craveability of garlic with the allure of guajillo into an awesome protein with a slight kick." The average price for the new LTO is $12.39. Chipotle offers $0 delivery on orders placed through the app and website from Sept. 17-25.
