Cheladas remain hot (STZ)
Bud Light launched a new Chelada flavor in stores last week; the Chelada Fuego depicted below. Cheladas are lagers mixed with tomato, lime juice, chile peppers, and salt with numerous varieties in Mexico. Bud Light partnered with Tapatio for a new flavor option for its Chelada family that packs an extra kick. Canned Cheladas sales reached $440 million in 2019.
Modelo added Chelada Mango y Chile to its Chelada family this year (depicted below). The ready-to-drink Chelada category has grown $76 million the past three years – with Modelo driving 95% of that growth. Modelo Chelada became the top-selling Chelada brand in 2019, unseating Bud Light. Constellation Brands has said Modelo’s demographics are 60% Hispanic and 40% non-Hispanic. The company has found that Modelo’s Chelada sales are in line with the rest of the brand's demographics. Women represent 60% of Modelo’s Chelada drinkers compared to 40% of beer drinkers overall. The drink has become popular in brunches, similar to the Bloody Mary.
A European organic food SPAC
Xavier Niel, a telecom billionaire, Matthieu Pigasse, a Centerview Partners banker, and Moez-Alexandre Zouari, the supermarket chain franchise partner Casino and co-owner of Picard, are creating a SPAC in the organic/more sustainable food category. They plan to raise €250-300M, which will be listed on the Euronext exchange. The SPAC is called 2MX Organic. Mr. Zouari said, “We want to build a European champion in organic food.” They plan to consolidate the fast-growing but fragmented organic food market and vertically integrate it. The shares are expected to start trading by mid-December. Mr. Pigasse said, “Our objective is to make the first acquisition as quickly as possible in 2021.” The first deal is targeted at around €2B. Mr. Niel said, “We have four or five targets in mind already and want to be quite ambitious for the first acquisition.” According to Bloomberg, SPACs have raised $64B in the U.S. this year compared to $786M in Europe. Mr. Pigasse and Mr. Niel created France’s first SPAC in 2015 in the tv production industry – Mediawan. Each of the founders will purchase at least €6M worth of shares and will collectively own 30% of the company after the listing. Mr. Zouari said he would separately seek to purchase up to €30M in the main rights offering, depending upon availability.
Grocery categories during the pandemic (STKL)
According to IRI and 210 Analytics, the strongest performing grocery categories during the pandemic have been fresh seafood and frozen, as seen in the following chart. Many consumers find seafood more difficult to prepare and therefore enjoy ordering at restaurants. During the pandemic, when restaurant trips have been curtailed, it would make sense that the category has seen a larger shift to food at home than other categories. The frozen category’s ability to store is likely behind its strength. Categories that were weak, floral, deli, and bakery, had interaction with store personnel as a commonality. The bakery and floral departments were also negatively impacted by fewer events/occasions for consumers. The deli department also includes soup, salad, and other prepared foods that have been closed in many stores. Within the general food or center store section, baking supplies had the most growth at +38%, followed by meals at +34%, and breakfast items at +17%. Oat milk was a top-performing category within beverages with a growth of 212% in the 31-week period ended Oct. 3. Oatmilk is one of the products that will likely grow off the large growth it experienced in 2020, while many of the stronger growing categories in 2020 will give up gains when vaccines are widespread. SunOpta is a leading supplier of oat milk and is currently expanding its capacity to keep up with market demand.
