UK grocery spend decelerates headed into the COVID-19 comparisons (NOMD)
CPG demand in the U.K. decelerated in the week ended March 6 to +4% YOY from +7% in the prior week. Frozen food demand remains elevated at +8% but decelerated from +15% in the prior week. Online grocery reached a record 17% of sales in February, up 1% from January. Total grocery sales grew 10.6% in February, according to Nielsen. The UK is Nomad Food's largest country by sales, representing 31% of overall sales. Nomad Foods has several growth drivers to help lap the pandemic comparisons. The shift to at-home consumption from away from home was not as pronounced in Europe because the food away from the home mix was lower pre-pandemic than in the U.S. Nomad Foods purchased Findus last year, increased its marketing budget, and is currently doing due diligence on Fortenova.
Treasury Wine Estates licenses low-priced brands (TWE.AX, TSRYY)
Treasury Wine Estates has agreed to license several of its US brands to The Wine Group for $100M. Treasury Wine Estates previously said it was looking to cut its volumes in the U.S. by half but have similar earnings over time. The deal comes amidst media reports that Pernod Ricard is considering an acquisition for Treasury Wine Estates. Pernod Ricard is unlikely to be interested in Treasury Wine Estates’ low-priced brand portfolio. The brands to be licensed contributed $92M in sales over the past six months and $13.5M in gross profit. The deal also includes the existing inventories of the brands to be licensed. The Wine Group, which owns about 60 popularly priced and premium wine brands, has been an active acquirer of lower-priced wine brands. There are several wineries for sale currently, providing Bespoke Acquisition a large list of acquisition candidates.
Blockchain tech for indoor grow (APPH)
Core Scientific builds an ag-tech center that will grow indoors, copack, distribute and sometimes process fresh greens, tomatoes, blueberries, and other produce in South Carolina. The $314M center is expected to be completed by the end of 2022. The center is a JV among Mastronardi Produce, Clear Water Farms, LiDestri Food and Drink, and the GEM Opportunity Zone Fund. Core Scientific is the largest asset mining infrastructure provider in North America. Core Scientific’s CEO is Kevin Turner, the former COO of Microsoft and Vice Chairman of Albertsons. The center will distribute in the Southeast from the 1,000+ acre site. It is the largest agricultural investment in a Federal Qualified Opportunity Zone that can provide investors with capital gains tax deferrals. The center will utilize blockchain technologies to track the produce.
