Oatly's new U.K. plant (STKL)
Oatly announced that it is planning to open its first factory in the U.K. in 2023. The facility will be able to produce 300M liters of oat milk when it opens. Capacity will be able to expand to 450M liters over time. The U.K. is currently supplied from Oatly's plants in Sweden. Oatly plans to use 100% renewable energy. The company also aims to decrease its energy and water consumption and waste by 75% by 2029. According to Nielsen, sales of plant-based milk in the U.K. have increased 16% in 2020 to $386M. Oat milk sales have more than doubled to $101M.
Oatly is expected to IPO in the coming months. We are excited about the IPO, but the rumored valuation is ~$10B. SunOpta is the best way to invest in the secular growth of plant-based milk.
Vertical Farms Get distribution (APPH)
Yesterday Kroger announced an expanded partnership with 80 Acres Farms. 80 Acres Farms is a vertical farm company with four robot-powered locations in the Cincinnati area. 80 Acres Farms will expand its distribution of farm-fresh produce from Kroger stores across Ohio to the Midwest. Next week, 80 Acres Farms produce will be sold at 316 Kroger supermarkets in Ohio, Indiana, and Kentucky. The products include various green salads, microgreens, herbs, snackable tomatoes, and baby cucumbers. 80 Acres Farms also has locations in North Carolina, Arkansas, and Alabama.
Not to be outdone, Albertsons announced that Plenty, a vertical farm grower, will now supply 17 additional supermarkets in the Northern California region, bringing the total to 53. The rollout is expected to reach 430 Albertsons supermarkets in California. Plenty's products include baby arugula, baby kale, crispy lettuce, and a mizuna mix. Plenty claims it is building the world's highest-output, vertical, an indoor farm in California. Last year Plenty raised $175M in a Series C round, bringing its total investment to $400M and valuation to $1.05B. Plenty is backed by Softbank, Jeff Bezos, and Eric Schmidt.
AppHarvest's valuation implies that it is the industry leader in vertical farms, is the only publicly traded vertical farm/greenhouse, or has a competitive moat. Of course, none of that is true.
Grocery sales begin to decelerate approaching the pandemic’s one-year anniversary (KR)
Grocery store sales decelerated at the end of February as we start to approach the one-year anniversary of the stockpiling that occurred in March. The peak of grocery store sales last year was the week ended March 15, 2020. Total CPG demand in grocery stores increased 4% YOY for the week ended February 28, decelerating from +11% in the prior week. The edible category decelerated to 6% growth from 13% in the prior week. Frozen category demand increased 12%, decelerating 10% from the prior week. The meat category decelerated to 8% growth from 14% in the prior week. Beverage alcohol sales decelerated to 12% growth from 15% in the prior week. Produce sales decelerated to 7% growth from 10% in the prior week. Last week Kroger guided ID sales to decline 3-5% this year and the two-year stack to be up 9-11%.
