Flexitarian — IncogMeato, KFC’s Finger Licking Vegan, Huang Chi Huang , Gardein and so forth
There’s so many brands in the alternative meat space — we’ll just discuss Kellog’s Incogmeato here. Other strong ones are Tyson’s Raised and Rooted, Impossible Foods , Nestle’s Awesome Burgers and so forth.
Industry: Today, 32% of Americans identify themselves as flexitarian.
As a result of this change in consumer tastes, companies have invested a total of $16 billion in plant-based meat, egg and dairy products. The “vegan wave” is now the flexitarian wave.
70% of the people who eat Beyond Meat burgers are meat-eaters. Sustainable foods are the wave of the future.
Kellogg (NYSE: K), which already sells the №1 veggie burger in the U.S. under its MorningStar Farms brand, plans to go after Beyond Meat, Impossible Foods, and the rest of the plant-based meat alternatives market in 2020 with a new line of products.
Around three out of four Americans are open to eating plant-based alternatives, but only one out of four people actually make a purchase.
The low purchase rate could be a function of bad-tasting products, but Kellogg hopes to stand out by offering the “amazing taste, texture and sizzling qualities of meat” in a product that represents a “better alternative for themselves and the planet.”
MorningStar Farms — a 30B dollar gem inside Kellogg
Kellogg has owned a vegetarian food brand called MorningStar Farms since acquiring the business in 1999.
The company sells over 90 million pounds of faux meat (burgers, chicken, sausage, etc.) every year, with a third from fake burgers and the remaining two-thirds from its other products. Estimates suggest that MorningStar generates $450 million in annual revenue, about double the amount Beyond Meat sells in a year.
Beyond Meat is valued at 64 times sales. If MorningStar Farms were given the same valuation, it would be worth $29 billion to Kellogg, about 50% more than the company’s current market cap.
It is clear that Kellogg is aware of MorningStar Farm’s potential
1.) The company announced on September 4 that it is launching its plant-based meat, Incogmeato, in early 2020.
2.) Diversified: In addition to its foray into the plant-based food space, Kellogg has pivoted away from its legacy cereal-first approach with it shifting focus towards the snack segment of its business. In January, the company started selling Cheez-It Snap’d as well as launched Pop-Tart Bites and Rice Krispie Treat Poppers in 2018.
(Read the link about the frankenfood -pizza with a lot of cheez)
Not to mention the company already added protein bars to the product lineup with its $600 million acquisition of RXBAR in 2017.
3.) Goldman Upgrade to 72 : While some analysts think K’s upside has already been factored into the share price, Goldman Sachs analyst Jason English argues that these positive developments could drive a profit margin improvement as well as stronger organic sales. “A number of changes have occurred at the company in recent years that we believe will sustain a faster growth trend at K than the company has been able to historically achieve; primarily a strategic pivot to snacks (vs. its legacy cereal-first approach) and completed M&A (albeit at lofty valuations) which has bolstered its EM exposure,” he explained. As a result, he upgraded the stock from a Hold to a Buy while raising the price target from $58 to $72 on September 6. The new price target demonstrates his confidence that shares could surge 12% over the next twelve months.
Try the public taste test of Kfc burgers. Saying no to Kentucky Fried Cruelty and serving Kentucky Fried Compassion!
About Conagra Brands
Conagra Brands, Inc. (CAG), headquartered in Chicago, is one of North America’s leading branded food companies. Guided by an entrepreneurial spirit, Conagra Brands combines a rich heritage of making great food with a sharpened focus on innovation. The company’s portfolio is evolving to satisfy people’s changing food preferences. Conagra’s iconic brands, such as Birds Eye®, Marie Callender’s®, Banquet®, Healthy Choice®, Slim Jim®, Reddi-wip®, and Vlasic®, as well as emerging brands, including Angie’s® BOOMCHICKAPOP®, Duke’s®, Earth Balance®, Gardein®, and Frontera®, offer choices for every occasion. For more information, visit www.conagrabrands.com.
Impossible Foods will go to the groceries
The Impossible Burger will make its retail debut at 27 Gelson’s Markets locations in Southern California before expanding its retail presence in the fourth quarter and in early 2020, the company said in a statement. The product will arrive in additional unnamed stores, including on the East Coast, later this month.
The product has already multiplied across restaurant menus, including Burger King locations nationwide, after starting at New York City’s Momofuku Nishi in July 2016, but until now it hasn’t been available as a raw product to consumers.
- Yum China Holdings, Inc. YUMC is gaining momentum on the back of accelerated store openings, robust performance at KFC, menu innovation and increased focus on technology. Evidently, the stock has gained 30.1% year to date compared with the industry’s 29.7% rally. However, factors like increasing costs and shrinking margins raise concerns. Let’s delve deeper.
- Key Catalysts
- In a bid to drive incremental sales, Yum China has been focusing on increasing store counts. Last year, the company opened 819 restaurants, which exceeded the target of opening 600–650 restaurants. In second-quarter 2019, it opened 178 restaurants and remodeled 238. Over 80% of the company’s current portfolio has been remodeled or built over the past five years.
- For 2019, Yum China expects to continue driving unit growth, with 600–650 new restaurants. Moreover, it has ample potential to expand the restaurant base, given the consistent rise in the middle-class discretionary spending.
- Furthermore, the company is banking on steady menu innovation to boost top-line growth. KFC’s extraordinary performance is attributable to solid sales from menu offerings like crayfish burger, stuffed chicken wing and spicy chicken burger. Apart from such consumer-preferred food items, the company offers signature menus for the Chinese New Year.
- Yum China is also serving coffee across its restaurants and enhancing the dessert category. In 2018, the company recorded double-digit growth, sold over 90 million cups of coffee and became one of the largest coffee retailers in China.
SHANGHAI, Aug. 22, 2019 /PRNewswire/ — Yum China Holdings, Inc. (“Yum China”) (YUMC) today announced that it has entered into a definitive agreement to acquire a controlling interest in the Huang Ji Huang group, a leading Chinese-style casual dining franchise business. Subject to the satisfaction of closing conditions and regulatory approvals, the transaction is expected to close in early 2020.
Founded in 2004 and headquartered in Beijing, Huang Ji Huang has over 640 restaurants in China and internationally. The group operates primarily under a franchise model and its brand portfolio consists of “Huang Ji Huang,” an industry-leading simmer pot brand, as well as “San Fen Bao,” a newly launched Chinese fast food concept in China.
Yum China is the largest restaurant company in China, with over 8,700 restaurants as of June 30, 2019. With the addition of Huang Ji Huang, Yum China aims to gain a stronger foothold and enhanced knowhow in the Chinese dining space, which represents a significant share of the dining market in China. In addition, with Yum China’s scale and system capabilities, and Huang Ji Huang’s track record of product R&D and brand management, the acquisition is expected to create synergies.
(personally: I’m looking at K and YUMC; QSR and BYND were previous holdings I’ve had but sold already. )
