May 14th, 2021 | 08:28 CEST
The Very Good Food Company, Anheuser-Busch InBev, HelloFresh - Reopening in the Food Sector
Table of contents:
The Very Good Food Company - Good news non-stop
The Very Good Food Company is dedicated to providing customers with plant-based food alternatives. Three years ago, the Company launched with plant-based meat alternatives that look and taste like they were bought at the butcher. The response has been tremendous, with one sales record after another. In March, sales exceeded CAD 1 million for the first time.
The product portfolio is being expanded through the acquisition of "The Cultured Nut." So The Very Good Food Company now also offers plant-based, dairy-free cheese under the new brand "The Very Good Cheese Co." with five different flavors. This new division can significantly increase overall sales, as the plant-based cheese market is growing 42% per year in the US and stood at USD 270 million in 2020.
To secure a share of this cake, the Company announced almost simultaneously with the launch of the new cheese line that United Natural Foods will now also take over distribution in the USA. Last year, United Natural Foods had already taken over the distribution for Canada, and due to the excellent experience, the distribution partnership has now been extended. The Company's retail presence is thus to be further increased significantly.
Sales figures are rising steadily, online sales are to start in the UK in the third quarter, and the EU will also enjoy the plant-based products in the fourth quarter. As sales increase, work is also underway to expand production, both in Vancouver and in California. The Californian plant is scheduled to come on stream at the end of the year.
After the furious start on the stock market, the stock has consolidated and offers a fascinating perspective to investors who want to bet on the emerging plant-based food market. Management is pursuing a clear strategy, and once the bottleneck of production has been enlarged, nothing will stand in the way of long-term growth.
Anheuser-Busch InBev - Strategy change successful
Due to the Corona pandemic, sales at the breweries dropped significantly. Some were even forced to simply dump their beer. There were no pubs, restaurants, stadiums or festivals. As for what happens when Corona restrictions fall, one could see it in the land of pubs. Beer became scarce when pubs reopened.
As the world market leader, Anheuser-Busch InBev had to report a 3.7% drop in sales in February, but the overall result was better than expected. Since then, the share price has been climbing. Good figures for the first quarter and sales in the UK have attracted further buyers. It now benefits the Company that it has bet on Beyond Beer. In recent years, consumer behavior has changed with increased consumption of craft beer, cider, alcopops, and non-alcoholic beer.
The Beyond Beer division expects mid-double-digit growth in the coming years. In addition, the CEO was changed at the beginning of May; Carlos Brito had to take his hat off after his aggressive acquisitions, which led to a high level of debt. The strategy is now more towards premium brands and Beyond Beer to grow outside of the beer business. The outlook for further growth is very good with the prospect of the restaurant industry reopening.
HelloFresh - What is next?
HelloFresh is one of the beneficiaries of the Corona Crisis. The Company was able to increase its sales by over 100%. The share price has climbed from EUR 16 to over EUR 77 since March 2020. The first quarterly figures of this year also surprised positively. The trend continued and sales more than doubled again compared to the same period last year. The number of active users of the service grew by 74.2% compared to the same period the previous year.
Following the figures, management adjusted revenue growth expectations for the current fiscal year from 20-25% to 35-45%. Currently, Corona is not yet defeated, and in this market environment, HelloFresh's business model is working exceptionally well. However, despite these good growth prospects, the stock did not manage to form a new high.
Two factors seem to be worrying shareholders. First, will the interest of HelloFresh cooking box users remain when the pandemic is over? Second, the question remains open whether Amazon Fresh will enter HelloFresh's market. In this case, there would be a price war that HelloFresh cannot win. Currently, we should wait and see how a reopening will affect HelloFresh's figures.
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