We are hosting our Consumables Q&A today, September 28 at 2 PM ET. Send in your questions ahead of the call to
California gas prices diverge (GO, SFM, ACI)
Gas prices have been falling nationally, down 25% from the peak this summer and 3% in the past month. However, gas prices are still 28% higher YOY. California on the other hand, has seen prices rebound to an average of $5.88 per gallon, $2+ more than the national average. The price gap between California and the rest of the country is the largest it has been in at least 22 years according to a Bay Area News Group analysis of AAA data. The reasons behind California’s increase are local. According to the California Energy Commission, price changes are being driven by significant unplanned refinery outages. California’s own special required blend of gasoline limits the state’s ability to import gas from other refineries. California drivers have seen average prices above $5 per gallon for seven months.
As Transportation Secretary Pete Buttigieg said, families that purchase electric vehicles will “never have to worry about gas prices again.” They may have to worry about brown outs in California though. While California leads the country in electric vehicles, they represent less than 2% of all vehicles on the road. High gasoline prices are impacting consumer behavior more in California than in other states.
Plant completion Nears (STKL)
SunOpta’s new plant-based beverage facility is nearing completion in Midlothian, Texas. The company expects to have its certificate of occupancy in early October and its first saleable production run at the end of the year. The aseptic manufacturing plant will be the company’s fourth producing a sterile product in sterile packaging, giving it a national network with the advantage of proximity over the competition. The process is not easy, as the recent product recalls at an Oatly co-manufacturer have shown. The Texas plant will have the capability to manufacture drinks in 330 ml bottles, the type popular with single-serve protein drinks.
SunOpta broke ground on the new facility in mid-September of last year. Equipment backlogs, a tight labor market, inflationary cost pressures, and shortages of materials conspire together to make the lead times longer and more expensive for future capacity in the future. Before the plant was completed SunOpta had sold about half of the new capacity. SunOpta planned the facility’s second phase of expansion into the facility design. The Texas facility and its future expansion are a prominent part of SunOpta’s stated plans to double the size of the plant-based business by 2025.
Grocery inflation differs by channel (BJ, KR, WMT)
Over the past year, grocery inflation has differed by retail channel with prices accelerating the most in the dollar store channel. A year ago, most channels had similar levels of price increases between 4% and 6%. In the four-week period that ended September 11, the dollar store channel had grocery inflation of 23.8%. In comparison, the mass channel has seen grocery inflation accelerate from 6% to 15%. Supermarkets saw grocery inflation accelerate from 6% to 12% over the same period. The club channel has seen the lowest rate of grocery inflation in the most recent four weeks at 10%. Consumers have noticed and the club stores continue to see healthy growth in new memberships.
