Wow, no cow (STKL)
For many Americans, Oatly’s “Wow no cow” commercial during the Super Bowl was the first time they have heard of the Swedish oat milk company. BuzzFeed said it was either the worst or the best thing they have seen. The company originally aired the ad in 2014 in Sweden. It was banned there, so the company had an idea of how it would be received. The earworm jingle is stuck in many people’s heads this morning. Oatly was already sold out of its t-shirt pictured below within minutes of the commercial airing.
On Friday, Bloomberg reported that Oatly is targeting a $10B valuation in its planned IPO. The listing could come as early as May. The company had also been considering a Hong Kong listing, but it is just planning on the U.S. listing. A Hong Kong listing would indicate prioritizing the China market. Like the commercial or hate it, Oatly will garner significantly more consumer awareness this year. What Oatly needs more than it did before the commercial is more supply of oat milk. SunOpta is a cheaper way to invest in oat milk growth (that doesn’t come with the jingle).
A turning point for restaurants? (PFGC)
A “dedicated grant relief program for restaurants” totaling $25B is included in the $1.9 trillion American Rescue Plan passed by the Senate. The plan is similar to last year’s RESTAURANT'S Act passed by the House but not voted on by the Senate.
The CEO of Performance Food Group said on Feb. 3, “While January is typically a seasonably softer month for PFG, we are encouraged by a modest acceleration in sales trends in recent weeks in our Foodservice business.” On Friday, Iowa’s Governor lifted all COVID-19 restrictions on bars and restaurants in the state. The Iowa Restaurant Association welcomed the relaxation of restrictions one day ahead of the Super Bowl. Statewide mask mandates are also removed. Michigan allowed indoor dining at 25% capacity on February 1. Massachusetts recently increased business capacity to 40% from 25%, including at restaurants. New York Governor Andrew Cuomo said that he would consider reopening indoor dining a day or two earlier than the anticipated return on February 14 for New York City. Indoor dining at 25% capacity will begin either February 12th or 13th. Other parts of the state are currently operating with 50% capacity. California lifted stay-at-home orders on January 25th. Investors should be positioned for the on-premise recovery well on its way.
Can shortage worsening for craft brewers (SAM)
Last week the Brewers Association wrote a letter to the Can Manufacturers Institute because the can shortage situation is deteriorating. “Our members report that the news on aluminum can supply is worsening, with some allotments representing as much as a 40% reduction in supply…. Some brewers are learnings their purchase orders for Q1 deliveries have been canceled. Others are being told that they will not be able to get cans until the second quarter of 2021.” The craft brewing organization urges the can manufacturers to ensure the availability of supply for small and independent craft brewers. Craft brewers have shifted a significant percentage of their volumes to cans in recent years. In 2015 cans accounted for 18.9% of the craft beer volume sold in the off-premise channel. In 2020 cans accounted for 52% of volume. Pre-pandemic kegs accounted for about 10% of volumes. Dollar sales of slim 12-ounce cans preferred by hard seltzer brewers grew 92% in 2020. Craft brewers typically get their can supply from brokers because their orders are too small for the large can manufacturers like Ball Corp. and Crown Holdings.
