Texas On-Premise Inflects (BUD)
Texas reports its alcoholic beverages sales tax receipts monthly. In March, alcoholic beverage receipts increased by 1.8% YOY, improving from -1.2% in February. It was the first month of growth after three months of declines. Beer CPI increased 4.1% YOY in February, implying unit declines exceeding 2% in the on-premise channel.
Protein bars (BRBR)
Aloha is receiving a $68M investment from Semcap Food & Nutrition. The investment firm has made minority investments in better-for-you brands, including Purely Elizabeth and Good Culture. Aloha bars contain 14 grams of protein in a variety of flavors. Two-thirds of the company’s sales are digital. Aloha expects to reach $100M in sales in 2024. BellRing Brands discontinued the PowerBar business in North America but still operates it internationally. The company’s focus is on protein powders and RTD shakes. PowerBar had $150M in sales when Nestle purchased it for $375M, but tastes and nutrition label priorities have changed. Only one of the top six nutrition protein bars on Amazon has more than three grams of sugar. RTD shakes often have higher protein and fewer calories than protein bars. We recently added BellRing Brands, the owner of the Premier Protein brand, to our Best Idea long list.
Bird flu lingering (CALM)
Cal-Maine Foods reported that in its quarter ended February, 1.5M laying hens and 240,000 pullets were culled due to bird flu. Since the end of the quarter, another facility tested positive for the virus, and another 1.6M laying hends and 337,000 pullets were culled. That represents 3.6% of the company’s total flock and production at the facility has been temporarily ceased. Conventional egg ASPs fell 41.5% in the quarter, while specialty egg prices fell only 7.7%. Feed costs fell 20% in the quarter. Supply decreases from the bird flu are not over which is supportive of higher egg prices. The last egg price spike seemed to have a larger psychological effect on the consumer than its overall impact.
