Milk and cookies and Star Trek baddies

By Frank Buhagiar on Monday 20 November 2023

Milk and cookies and Star Trek baddies
Image source: Milk and cookies and Star Trek baddies
CommentaryFoodTech Investment

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

Question incoming:

  • Week ended Friday 03 November 2023 – US Treasury yields down; Nasdaq up; share price RISERS in FFF’s listed foodtech outnumber fallers
  • Week ended Friday 10 November 2023 – US Treasury yields steady; Nasdaq up; share price FALLERS in FFF’s listed foodtech outnumber risers
  • Week ended Friday 17 November 2023 – US Treasury yields down; Nasdaq up; share price RISERS (24) in FFF’s listed foodtech outnumber fallers (18) (four non-movers)

The question: how come listed foodtech doesn’t always follow the Nasdaq’s lead? No doubt multiple answers. Perhaps among them, US Treasury yields need to fall and not just remain steady. When US Treasury yields do fall then, as Star Trek baddies the Borg would say, “Resistance is futile!”  The pull of general market sentiment just too much for the listed foodtechies to resist and so share price risers gain the upper hand.

Another reason to consider though - positive news at the individual stock level. Take Farmer’s Edge – shares finished the week up 140%.  Title of the agtech’s press release gives the game away: ‘Farmers Edge Announces Fairfax Privatization Offer’. According to the release: “its board of directors…has received a non-binding proposal from its majority shareholder, Fairfax Financial Holdings Limited…by which Fairfax would acquire all of the common shares of the Company it does not already own for $0.25 per share.  Fairfax’s proposal is subject to, among other things, negotiation and finalization of definitive documentation in respect of such proposal.” Shares closed just shy of the mooted offer price at $0.24 per share. Always good to leave something on the table for the next person.

Elsewhere, Burcon Nutrascience bucked the trend of those companies whose share prices go on a pre-results run only for the ground gained to be all but handed back on release of the numbers.  As reported by Food on the Move’s LISTED FOODTECH AND THE CINDERELLA SYNDROME, Burcon’s share price tacked on 30% the week prior to the numbers.  Cue Q2 results on 14 November and a…15% rise in the share price. Nothing to see here for the old adage “better to travel than to arrive”.

Interesting to note that in the accompanying press release, the company refers to itself as Burcon 2.0 – a nod to the recently adopted ‘capital-light partnership approach’.  According to the announcement “Burcon expects that it can rapidly develop the market, begin commercial production and achieve sales in 2024, bringing the world’s first high purity 95% hempseed protein isolate to market.” And speaking of the market, management believes it could prove to be a big one for Burcon 2.0: “According to Research and Markets, the global hemp-based food market is projected to double in the next five years, growing at a rate of over 15%.  Based on market data and internal estimates, there is potentially a multi-billion-dollar addressable market for our hempseed protein with over $100 million potential for Burcon.” Investors, believers too, for now at least.

Finally, Oatly’s rollercoaster of a ride continued.  Shares were off 14% following the publication of the oat drink co.’s Q3 Report on 9 November. Talk of “full year 2023 constant currency revenue growth to be near the low end of our 7-12% range” not helpful. One week on and it’s come back Oatly all is forgiven after the shares soared 52.5% higher. Only news out, ‘Oatly Announces Nationwide Availability at Insomnia Cookies’.  The oatie has struck “a new foodservice distribution arrangement in the US with Insomnia Cookies, the beloved brand known for serving warm cookies all day and late into the night. Available at all 250+ locations throughout the US, Oatly 11oz Original and Chocolate Oatmilks are now offered as a great-tasting beverage option alongside Insomnia Cookies’ range of signature warm, delectable cookies, desserts, and ice creams.”

Oatly North America President Mike Messersmith adds: “Among the most quintessential of food combinations has to be milk and cookies…Insomnia Cookies has built an amazing brand and reputation for providing fantastic cookies and more, whenever people are craving them, and we know that our Oatly oatmilks will be a perfect complement to any order. We’re delighted to continue building our foodservice footprint in the US with such a sweet partner.” Ah, the lure of “milk and cookies”. As the Borg would say “resistance is futile”.