“A lot of it [price premium] will depend on how consumers increasingly migrate to those alternative kinds of milk, not just in our business, but broadly in a way that supports increased production.” - Starbucks CFO Patrick Grismer on the Q4 call. As production capacity increases and prices per unit come down, Starbucks will reevaluate the premium it charges for plant-based milk. Lower prices, in turn, will lead to further market adoption. SunOpta is the supplier of plant-based milk for Starbucks.
Chobani plans for an IPO (STKL)
Several media outlets reported yesterday that Chobani is planning on an IPO later this year. The company is targeting a valuation of $7-10B. Revenues are said to be in the $2B range. The company that changed the yogurt category has been expanding into refrigerated coffees, creamers, and oat milk. After shaking up the yogurt industry for years, competitors have offered their own higher protein yogurts. (There are similarities in the Greek yogurt shift to what we see ahead for hard seltzer.) Chobani said its yogurt sales grew 12% last year, outpacing the broader category by 2x, as consumers ate breakfasts at home. Chobani hired Jody Macedonio as CFO in December. She was the CFO of Dean Foods most recently. Chobani should try to go public before Oatly, but either way, more attention will be drawn to oat milk growth. The only way to invest in the growth in oat milk is SunOpta.
Ingles Markets reports slight SSS and GM deceleration (KR)
Ingles Markets, a regional grocer with 197 stores in six southeast states, reported a 10.4% sales increase, decelerating from 11.3% the prior quarter. Perishable sales increased 14.4%, while gasoline decreased 20.6%. Excluding gasoline, comps increased 15.2%, with transactions down 4.3% and transaction size up 16.8%. Gross margins expanded 250bps YOY, slightly less than the 290bps in the prior quarter. Gross margin expansion was driven by less discounting and shrink and higher gasoline margins than the prior year. Online grocery sales were not called out as a headwind to margins. Unlike grocers like Kroger and Albertsons, Ingles Markets charges $4.95 for curbside pickup. Conventional grocers have benefited from the pandemic driven shift to at-home meal consumption, but investors’ comparison concerns prevented Southeastern Grocers from going public last month.
Texas on-premise alcohol beverage sales tick up (BUD)
Texas reports its alcoholic beverages sales tax receipts monthly. In January, alcoholic beverage receipts decreased by 27%. That represents a slight improvement from -29% in December, as seen in the chart below. On-premise trends were improving before some states passed restrictions on bars and restaurants again. In Texas, bars were shut down in mid-March, then allowed to re-open on May 22 with capacity limits. In late June, bars were shut down again, then allowed to re-open once again in October by county. Bars were also allowed to reclassify as restaurants since June as long as food sales exceeded alcohol sales.
