April 15th, 2021 | 10:40 CEST
The Very Good Food Company, Unilever, Kraft Heinz Company - People always eat!
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Born in Munich, he first studied economics and graduated in business administration at the Ludwig-Maximilians-University in 1995. As he was involved with the stock market at a very early stage, he now has more than 30 years of experience in the capital markets.
The Very Good Food Company - Vegan is hip
The Canadian Company The Very Good Food Company Inc. (VERY) began specializing in plant-based meat alternatives three years ago. The Company's vision is to build a taste experience that resembles meat consumption in appearance and color but is produced on a 100% plant basis. In Germany, Veganz follows similar approaches but is not listed on the stock exchange. The Very Good Food Company's products are intended to stand out and encourage repeat purchases, yet the supply is so tiny that VERY shelves are often quickly sold out. The leading brand so far is the label "The Very Good Butchers".
The Very Good Food Company Inc.'s product sales were higher than ever in March 2021, exceeding the CAD 1 million mark. Increased sales in both e-commerce and wholesale were primarily responsible. People are using digital marketing efforts to deepen brand awareness and drive customer traffic to the online store. Furthermore, a new website was launched in the US in the fall of 2020, which is already generating real traffic. VERY uses product promotions and subscription discounts to increase the number of hits and the value of customer connections.
Canadian retail shipments are up due to new, previously announced retail agreements with Quality Foods, part of the Jim Pattison Group, and additional distribution points with Sobeys Inc. through its Safeway retail network. VERY is demonstrating the excellent scalability of its business with these collaborations. Canadian distribution points have grown from 275 at the end of 2020 to 301 at the end of March. The distribution presence is permanently being increased as continued momentum drives orders and corresponding sales volumes. Last week, production at the Rupert facility in Vancouver started up with one product line. The second is to follow in Q4. With the two production lines, up to 37 million pounds of food products can be produced annually. This figure represents an increase of approximately 2,690% over the Victoria facility's expected annual production capacity of 1,375,000 pounds per year.
VERY shares had a perfect start on the stock market in June 2020, and the price today is still 12 times higher than the initial listing. The share, which is also traded in Germany, currently has a market capitalization of CAD 470 million, and the growth potential is considerable.
Unilever - Large producers control the market
VERY's concept is not unheard of; brand-name manufacturers have also discovered the gap in demand. Plant-based nuggets are one dish introduced at Burger King in Poland in response to growing interest among Poles in plant-based diets. The new item on the menu, just like the plant-based Whopper, was developed in collaboration with "The Vegetarian Butcher" (A Unilever brand). It recently debuted in all Burger King restaurants in Poland.
Burger King's new offer was created in response to the desire for more plant-based options on the restaurant menu. In line with consumer trends, manufacturers are striving to match the taste, texture and nutritional value of familiar meat products. Unilever's Dutch brand "The Vegetarian Butcher," which has been working on plant-based meat substitutes for years, continues to expand its presence in Poland as well - the trend itself has long been running globally with growth rates of over 50% per annum.
Unilever is one of the top 5 consumer brand manufacturers in the world. With a turnover of GBP 46 billion, the Company achieves an annual pre-tax profit of GBP 7-8 billion. The stock is a member of the FTSE100 index with a market capitalization of GBP 115 billion.
Kraft Heinz Company - Moving forward again with old tradition
The Kraft Heinz Company is a US food company formed in 2015 from the merger of Kraft Foods Group and HJ Heinz Company. The Company has dual headquarters in Chicago and Pittsburgh. Kraft Heinz claims to be the fifth-largest food producer in the world. The merger finally seems to be bearing fruit, as the group's value has smoothly doubled since March 2020.
Under Miguel Patricio's leadership, Kraft Heinz has decisively changed its strategy: While co-owner 3G Capital used to focus on aggressive acquisitions, the CEO is now trying a new recipe by primarily boosting internal growth. In 2013, Brazilian investment group 3G Capital was the driving force behind the merger of ketchup maker Heinz with food group Kraft. Four years ago, the group even tried to take over Unilever, but that attempt was thwarted.
Things have changed since then: sales plummeted in 2016-2018 and the Company fell into disrepute for accounting fraud and alleged insider trading. As a result, Kraft Heinz had to write off about EUR 14 billion in 2019. Currently, 3G Capital still owns 17.65% of the food company, making it the second-largest shareholder. Departed CEO Patricio has everything firmly in hand, having completely turned Kraft Heinz around strategically since taking office in 2019. He was left with few other options, as the group suffered from a massive mountain of debt and several product launches had failed.
Patricio, therefore, shifted the focus to internal growth. The Covid Crisis came at just the right time for this change of course: last year, many people had to eat at home, which led to the American Company's sales growing by 6% in 2020. In 2019, sales were still down 2.2%. The marketing budget was increased by 30% to bring the old favorites back into the spotlight. The former blockbusters are now offered as "healthier versions," with lower sugar and fat content, an approach that should appeal to more health-conscious consumers. Let us see if the stock can return to its old strengths.
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