☕ Nestlé’s coffee climate crisis
Hey Snackers,
The Tesla bots are coming: Elon Musk debuted “Optimus,” a humanoid robot that he says could eventually do household chores and “be like a friend.” For now, the coolest thing it can do is pick up a watering can.
Yesterday was refreshingly green: the S&P 500 soared 3%, adding to Monday’s rally in its biggest two-day gain since March 2020 (up nearly 6% through Tuesday). Twitter surged 22% on reports that Elon agreed to buy it at his original offer price.
Nestlé commits $1B to saving coffee from the climate crisis as trouble brews for java crops
Love the smell of Nesquik in the morning… more like Nescafé. Nestlé (aka: the world’s largest food company) is famous for sweets like Kit Kats and Toll House cookies. But it’s also the world’s largest coffee company, with brands like Nescafé, Nespresso, and Starbucks’ at-home offerings (think: fridge Cold Brew). Now it wants to save the java beans:
- Nestlé committed $1B by 2030 to protect coffee from the climate crisis and extreme weather. The investment is meant to help its suppliers adopt more sustainable farming methods.
- Think: Replacing coffee trees with climate-change-resistant varieties and offering financial incentives to farmers who responsibly source beans. Nescafé has 500K farmers.
- Wild stat: 5.5K+ cups of Nescafé are sipped worldwide every second. Coffee and other non-milk bevs make up a third of Nestlé’s sales.
The world’s favorite jitter juice… is in trouble. Global coffee revenue is over $400B/year, but the market could lose steam. Coffee crops are grown near the drought- and hurricane-prone equatorial belt. Rising temps could reduce coffee-growing land area by as much as half by 2050. Meanwhile, severe frosts in Brazil already slashed last year’s crop.
- Caffeine crisis: The head of Nestlé’s coffee biz said, “We will not have viable coffee farms in 20 or 30 years if we don’t take action now.”
- With its $1B investment, Nescafé aims to have half of its coffee farmed with regenerative methods by 2030.
Coffee’s the tip of the iceberg… It isn’t the only crop facing climate threats. Corn-crop yields may decline by nearly 25% by this century, NASA says. Wine, almonds, peaches, and rice are also being affected. Companies may have to step in where governments have been slow to act to protect their products — and the world’s food supply.
Viral canned-water biz Liquid Death scores a $700M valuation as booze-less brands sparkle
Sounds like a metal band… actually a water brand. Liquid Death is on pace for unicorn status after taking the agua industry by storm. The canned-water brand launched in 2019 with mountain water in skull-adorned metal cans (so edgy). Tagline: “Murder your thirst.” It started with a website and is now sold everywhere from Whole Foods to tattoo parlors. This year Liquid Death is on track to triple its sales to $130M. Investors want a sip:
- Big backers: Liquid Death hit a $700M valuation thanks to its latest $70M cash infusion from investors like Science Ventures, Live Nation, and… Swedish House Mafia.
- H20-fluencer: Liquid Death is the most followed water brand on TikTok (nearly 3M followers) and the second most followed on Insta.
Bubbly water > boozy brews… Alcohol-free drinks have sparkled as more Americans shift to a more health-conscious lifestyle. Non-alcoholic-spirit sales (think: boozeless beer) 7X’d from 2020 to 2021, and bottled water has outsold soft drinks since 2016. Fun fact: 74% of people say they’ll turn to other packaged drinks if bottled water isn’t available (read: shunning the tap).
- Since Liquid Death launched flavored options like “Berry It Alive” in March, its online sales have grown 40%, helping it compete with La Croix and Pepsi's Bubly.
The brand is in the packaging… and sometimes that matters more than what’s in the package. Liquid Death took an extremely basic product (water) and made it cool. Similarly, Dollar Shave Club (also backed by Science Ventures) used viral videos and simple brown packaging to make razors trendy. Thanks to its novel strategy, it’s possible Liquid Death could even go public at a time when IPO thirst is dry.
What else we’re Snackin’
- Bitter: Elon Musk reportedly told Twitter late Monday that he'd buy the company at his original offer price of $54.20 per share. Musk had tried to get out of the deal — and was set to be deposed tomorrow.
- NYChip: Micron said it'll spend $100B (over 20 years) to build a computer-chip plant in upstate New York. The pledge comes after legislators passed the CHIPS Act, which aims to juice US chip making, in August.
- Fashun: Poshmark's on deep discount. The resale marketplace agreed to sell itself for less than half its IPO price. South Korean internet giant Naver is snapping up the biz, eyeing international expansion.
- Drive: Rivian's stock jumped yesterday after the electric-truck maker said it's on track to make 25K vehicles this year (as promised). The news calmed investor worries about industry-wide supply troubles.
- Finfluence: Ray Dalio, whose Bridgewater hedge fund manages $150B in assets, is stepping down after planning the move a decade ago. He'll stay on the company's board, serving as a mentor.
Wednesday
- Earnings expected from Lamb Weston and Helen of Troy
Authors of this Snacks own: shares of Tesla and Starbucks
ID: 2459216