Campeones! Campeones! Oatly, Oatly, Oatly!

Food on the Move: FFF’s weekly roundup of listed FoodTech’s movers & shakers

Good week for FFF’s listed FoodTech space, at least in terms of breadth - risers outnumbered fallers by almost 2.5 to 1.  In all, there were 33 risers, 14 fallers and two non-movers by Friday 11 November.

Last week’s pacesetters, the food deliveries, were at it again: DoorDash (DASH) +22%; Delivery Hero (DHER) +27.6%; Ocado (OCDO) +28%; Just Eat Takeaway (TKWY) +16%; Deliveroo (ROO) +7.7%; and MissFresh (MF) +1.2%.  Boxed (BOXD) was the exception that proved the rule with a 0.7% loss for the week, but hey anything sub-1% could be down to a rounding error and therefore worthy of a recount – well if it works in US elections…

Once again, OCDO led the way and that was despite broker JPMorgan slapping a 500p price target on the online grocer’s shares – a third lower than the 11 November closing share price of 812p.  And that was not all the shares had to contend with. As reported in the Financial Times, “Marks and Spencer is expecting a substantial discount on the final price of its investment in Ocado Retail after performance at the online grocer deteriorated.”  So, what’s going on?  No news out, so perhaps still basking in the glow of the previous week’s tie-up with South Korean retailer Lotte Shopping.  Or maybe the answer lies elsewhere in the sector…

Suspect#1: DASH. The shares reacted positively to the delivery company’s agreement with leading beauty omni-retailer Sephora “…to offer on-demand delivery from over 500 Sephora stores across the U.S. and Canada. Consumers can now shop Sephora's expansive selection of makeup, skincare, haircare, beauty tools, fragrances and more directly on the DoorDash app and website for delivery in under an hour, on average.” Hmmm…a little DASH of lippy may account for DASH’s share price gains but surely not for the rest of the sector.

Suspect#2: DHER.  As Reuters reported: “Delivery Hero shares jumped…after the Berlin-based company forecast a positive core profit margin for next year as it said it focuses on reaching profitability over growth”.  Now, TKWY and ROO made similar noises last month, as reported by FFF’s Food on the Move, ‘The delivery heroes!’. One by one it appears companies in the sector are saying things investors in this market at least are keen to hear.  Can only be good for sentiment towards the wider food delivery sector.  Case closed, your Honor?

Elsewhere, HelloFresh (HFG) continued its strong run - the shares, which put on 32% over the week, have been on a hot streak ever since the meal kit co. published a strong set of Q3 results at the end of October.   At the time, CEO Dominik Richter had this to say: “Over the past years we have succeeded in building a very resilient business model. While the cost for food is impacted by the inflation worldwide, HelloFresh has been able to remain very affordable.” That may be true for HFG’s food kits but, at €31.6 a pop, the shares, which are now up 50% since the end of Oct, are not as “affordable” as they once were.

One wonders what fellow meal kit co. Blue Apron (APRN) would give for HFG’s share price performance after its shares closed off 43%.  As Bloomberg reported, the week got off to a bad start after APRN revealed it hadn’t “…received expected funding from affiliates of one of its top investors…as a result of the funding delay, it entered into a pledge agreement with one of the affiliates to secure payment of $56.5 million the company is owed. Blue Apron is allowed to take action under the agreement if the money isn’t paid by Nov. 30. If it doesn’t get funds or negotiate relief from its lenders, the company expects it will breach its minimum-liquidity covenant as early as later this month.”  The uncertain funding outlook prompted APRN “to pull its revenue guidance for 2022” and a few days later to unveil a possible US$30 million dollar equity raise.  No wonder the shares had a bout of the blues.

Finally, Oatly shares caught the eye with a gain of 20%.  No press release out, but the results of a study commissioned by the oat drink co. on the “Performance of Footballers on Plant-Based Diet” were covered by the Vegconomist: “18 footballers from German regional league team SV Babelsberg 03 took part in the research, with some adopting a plant-based diet and others continuing with their ordinary eating habits. The players’ athletic performance was assessed before and after the eight-week trial, with no changes found.” Let’s call it a draw then.

But what’s this? A last-minute breakaway?  The report goes on to say: “Footballers who adopted a plant-based diet also cut their carbon footprint by an average of 30%, as calculated by the ifeu Institute.” Last-minute winner for Oatly. Campeones! Campeones! Oatly, Oatly, Oatly!