Food & Beverages

Luckin investors are short America, long lunacy

17 May 2019

An unprofitable Chinese coffee chain that didn’t exist two years ago was valued at $6 bln within minutes of its New York IPO. Luckin is well placed if frosty Sino-American relations ping back on U.S. rival Starbucks. Beyond that, the debut is every bit as irrational as it sounds.

Amazon-Uber food fight means empty bellies for all

17 May 2019

The web giant is backing a $575 mln investment in Deliveroo, which ferries meals to time-poor urbanites. It means the UK-based group can continue its assault on rival Uber Eats in Europe. Thin margins and deep-pocketed investors are the perfect ingredients for perpetual losses.

Budweiser’s Hong Kong IPO may pop open more M&A

10 May 2019

AB InBev has filed documents to float its Asian business. It will fetch a higher valuation multiple than its parent, and could be worth some $60 bln, helping to pay down some debt. The shares also give deal junkie boss Carlos Brito a currency to shop for more.

Uber has recipes to avoid delivery indigestion

9 May 2019

The ride-hailing giant hopes a $795 bln global takeout market can offset slowing growth in its core business. For now, generous incentives are gobbling profit. But the likes of Europe's Takeaway.com suggest there are ingredients for success, starting with market dominance.

AB InBev’s debt belly needs more than fizzy growth

7 May 2019

Pricier beer helped the brewer’s first-quarter sales rise faster than expected. Yet AB InBev still has an unsightly debt pile and is battling falling volumes in key regions. An IPO of its Asian operations sooner rather than later would help investors breathe more easily.

China’s Luckin Coffee roasts a rich IPO

7 May 2019

The chain is seeking to raise up to $590 mln as it races to overtake Starbucks. Luckin is growing fast, but burning cash to do so. Although its strategy diverges from that of its Seattle rival, on a comparative revenue-per-store basis the implied $4 bln valuation is high.

Beyond Meat IPO flips into FOMO territory

2 May 2019

The plant-based burger firm’s stock almost tripled on its market debut. The desire for food that’s tasty, green and ethical is real, and investors are clamoring for a bite. But such big first-day pops are often driven by a fear of missing out that longer-term returns cannot sate.

Beyond Meat’s green IPO could still burn buyers

30 April 2019

The plant-based burger maker is seeking a $1.5 bln valuation after raising its IPO target price by 20 pct. The eco-friendly business has developed a following among consumers. But with former investor Tyson entering the alternative-meat space, investors may have tastier options.

Yum China plays proficient game of deal chicken

26 April 2019

Boss Joey Wat and her board rejected an $18 bln buyout approach led by Hillhouse last summer. After detailing KFC expansion plans and a Pizza Hut turnaround, the shares are now flirting with the offer price. That puts pressure on Yum China to fully justify a standalone strategy.

China’s wannabe Starbucks brews a muddy IPO

23 April 2019

Luckin Coffee is rushing to deliver a New York listing before its business plan leaks. Its prospectus argues fair value doubled in three months, and an April round put the company’s worth at nearly $3 bln. Its money-losing model and murky corporate structure leave a bitter taste.

Kraft Heinz new boss is a good palate cleanser

22 April 2019

Miguel Patricio is not an entirely fresh ingredient for the food company – he ran marketing at AB InBev, created by Kraft’s second-largest shareholder. Both companies have underperformed in recent years. That said, his focus on marketing may break the company’s holding pattern.

Unilever could use a few Nestlé diet tips

18 April 2019

Decent first-quarter revenue growth at both consumer giants means their 2020 margin goals can live another day. But Unilever’s foods business expanded just 1.5 percent organically compared to 3.4 percent overall at Nestlé. The Anglo-Dutch group needs to overhaul its pantry.

Apollo’s grocery-store double dip looks digestible

17 April 2019

Leon Black’s buyout shop is buying niche food retailer Smart & Final for the second time in 12 years. The chain’s earnings have come under pressure of late. But at $1.1 bln Apollo isn’t paying a fat multiple. And its knowledge of the firm and the industry should serve it well.

Viewsroom: Wells Fargo searches for a leader

11 April 2019

The U.S. bank may be tempted to recruit from splashy peers like Goldman Sachs. But there are better reasons to poach from smaller firms. Meanwhile, the $170 bln Chinese liquor maker Kweichow Moutai is worth more than Diageo. Breakingviews columnists discuss the firewater’s draw.

Holding: Investors ignore law of “stuff happens”

11 April 2019

Using fiascos like oil-well blowouts and tainted burritos to claim stock fraud is increasingly common in the United States, but misguided. Companies have a duty to disclose significant risks, not warn of unlikely mishaps. Arguing otherwise enriches lawyers at investors’ expense.

China’s firewater punch diluted by a political put

9 April 2019

The $170 bln Kweichow Moutai is now worth about as much as Diageo, Pernod, Campari and Remy combined. Eye-popping earnings and foreign interest have fuelled a 50 pct stock price surge this year. But officials in Beijing keep its valuation from reaching maximum intensity.

AB InBev shareholders get more smoke, less 3G

20 March 2019

The brewer nominated former Altria CEO Martin Barrington as chairman. Though he’s not linked to the Brazilian investment firm that jointly controls the $143 bln company, the Marlboro maker is a shareholder. Investors who want a more radical shake-up have an opportunity to say no.

China’s Starbucks rival pushes its luck

13 March 2019

Lu Zhengyao, Luckin Coffee’s chairman, wants a $200 mln personal loan in exchange for a role on the upcoming IPO, Reuters reports. Such hubris suggests the delivery-focused chain, which faces intensifying competition, is overheating. Investors should beware getting scalded.

Meituan Dianping drives itself to distraction

12 March 2019

The $42 bln Chinese super-app operator grew fourth-quarter sales by a robust 89 pct. Meituan’s entire valuation is reflected in the strength of its food delivery unit against Alibaba-owned Ele.me. That raises fresh questions about costly ride-hailing and bike-sharing diversions.

Cox: Unilever can’t help but mull a Kraft pounce

7 March 2019

The tables have turned since the Cheez Whiz maker bid for its rival. At $40 bln Kraft is worth a quarter of its erstwhile prey. Unilever can afford a deal, export its culture and reap synergies. But Kraft’s portfolio may be a poison pill unless used as a prelude to exiting food.