"How can we have beer breweries in the north? How can we produce beer for export? What are we exporting? Water. We don't have water in the north." - Comment from Mexican President AMLO yesterday.
Molson Coors reaffirms (TAP)
Molson Coors reaffirmed guidance for an MSD% revenue increase in 2021 and flat EBITDA YOY. Management expects the combined impact from the cybersecurity attack. The February winter storms in Texas will shift 1.8 to 2.0 million hectoliters of production and shipments from Q1 to the balance of the year. The later shipments will also shift between $120 to $140M in EBITDA from Q1 to the year's balance. This does not include the incremental one-time costs from the hacking. Last week we moved Molson Coors to the best idea short. The company is counting on refilling distributor inventory levels, but sales lost to current out of stocks are lost forever. In our conversation with a Molson Coors distributor, we spoke about the company’s missing inventory levels. CLICK HERE for event replay.
AeroFarms to come public (SV, ARFM)
Spring Valley Acquisition, a SPAC, announced an agreement to merge with AeroFarms. AeroFarms is an indoor vertical farm company. The company currently sells leafy greens under its Dream greens brand in the Northeast at 200 retailers, including Whole Foods, ShopRite, Amazon, and FreshDirect. AeroFarms has grown over 550 different varieties of fruits and vegetables. The company claims its productivity can achieve as much as 390x more than traditional field farming. Last year the company announced it was building a 90,000 square foot indoor vertical farm in Abu Dhabi. The company’s development pipeline is accelerating with the SPAC merger, as seen below.
The proforma equity value is expected to be $1.2B when it closes in Q2, bringing $357M in gross proceeds. A fully committed PIPE will bring in $125M. The proceeds will be used for expansion with new farms and new product categories. At $10 the valuation is 2.6x 2025 revenue and 10.4x EBITDA. 2025 is when management projects positive EBITDA. AeroFarms has a 15-year track record, but its financials are a start-up like AppHarvest. The company has recruited several notable executives, which differentiates it from its competitors.
One of the more recent hires has been ahead of sales. The farming/production side is where the company seems to have focused its efforts so far. AeroFarms appears to be less developed in branding and selling the products. With the number of vertical farms and indoor grow competitors, it is not enough to grow the product anymore. The company’s most recent indoor farm has capital needs of $52M and annual revenue of $25M.
Survey indicates the vaccines do not flip a switch (BUD)
Numerator conducted a survey of consumers’ comfort level with various activities. Receiving a vaccine did not cause a dramatic change in consumers’ comfort levels with various activities. The results are detailed below. The results indicated that 45% of respondents are extremely or somewhat uncomfortable eating inside a restaurant. 58% of respondents are uncomfortable going to a bar or club.
The findings indicate that those who plan to get the vaccine have higher levels of concern for various activities than those who do not. Those who are already vaccinated are slightly more comfortable than those who have not with most activities. Vaccinated people remain cautious. 48% of vaccinated people are still uncomfortable eating inside a restaurant, while 65% are uncomfortable going to a bar, as seen in the following chart. Those who are not planning to get the vaccine are most comfortable with most activities in the survey. One-third of those not planning to get the vaccine is extremely comfortable going to a bar or club or attending a concert.
The survey results suggest it will take time even after people are vaccinated for the majority of consumers to resume pre-pandemic activities.
