Flu monitor (PRGO)
The CDC estimates that there have been at least 13 million illnesses from the flu this season through the week ended December 3. The flu test positivity rate is now 24.8% compared to 3% a year ago. The flu hospitalization rate is the highest since 2010-11. The flu has surged since Thanksgiving. All but seven states are experiencing high or very high respiratory virus activity. About 80% of hospital beds nationwide are in use, up 8% points in the last two weeks. Hospital bed utilization has only been above 80% once since the COVID-19 outbreak and that was in January at the height of the Omicron surge.
Perrigo’s Q4 is mostly set for the cough & cold season as orders are already in and production is maximized, especially for liquid medicines. A larger or longer cough & cold season would be seen in Q1 results as retailers reorder more inventory.
November PPI (UTZ, LANC)
The PPI for food manufacturing reaccelerated to 11.8% YOY in November from 11.0% in October. The two-year average was flat sequentially.
The PPI for fats & oils reaccelerated to 14.1% YOY from 11.1% in October. Fats & oils, a key input in a variety of food products, have decelerated rapidly since March. Utz Brands and Lancaster Colony have seen significant margin pressure from higher input costs including from cooking oils. 2023 will see margin recovery from price increases and falling input costs.
Gorillas saved (KR)
Getir, a Turkish rapid grocery delivery service, announced the acquisition of Gorillas, a German competitor. Rapid grocery delivery services utilize dark stores to get items to customers in as little as ten minutes. Gorillas had been losing €1.50 for every €1 in revenue it generated. Getir plans to add $100M to help stabilize Gorillas.
Gorillas was reportedly valued at $1.2B while Getir said it reached a valuation above $10B earlier this year. Getir raised $800M in March at an $11.8B valuation followed by $550M more in a series D funding round in June. Gorillas had raised more than $330M in two funding rounds with the September 2021 valuation at $3B. Gorillas currently operates in New York City and several European cities. Several food delivery services have shut down after the rapid expansion and capital raises during the pandemic. Rapid grocery delivery is different enough of a business model from non-expedited grocery delivery that there have not been many combinations. Grocery delivery needs scale and the industry still needs fewer participants
