đ¶ Pet profit-palooza
Hey Snackers,
New thing: joint commercials. Super Bowl spoiler alert: GM has teamed up with Netflix for a commercial starring Will Ferrell that melds Chevys with âSquid Gameâ and âStranger Things.â
Stocks fell yesterday as mixed earnings kept investors on their toes. Meanwhile, some traders are predicting that the Fed will raise its peak rate to 6% â higher than consensus.
As Americans keep spoiling their pets, companies invest in the fast-growing category
Itâs a dog-eat-dog-food world⊠and weâre all just living in it. The human economy isnât doing too hot, but the pet economy is still thriving: Jam icon J.M. Smucker struck a deal to sell its pet-food brands to cereal company Post for $1.2B. Smucker said that the brands (which include Rachael Ray Nutrish and Kibbles ân Bits), will make $1.5 billion for the fiscal year. But Smucker isnât shedding pets: itâll focus on its fast-growing Milk-Bone dog snacks and Meow Mix cat food.
Grass-fed lamb for Fluffy⊠while you eat frozen peas. The pet-food biz is growing fast as Americans keep showering their fur babies with premium treats, despite inflation. NestlĂ©, aka: the worldâs largest food company, makes pretty much anything that begins with "Nes" (presso, quik). But its biggest growth driver isnât Nes-treats â itâs pet treats.
Net-pet-so: In the first nine months of last year, NestlĂ©âs Purina PetCare unit was once again the largest contributor to organic growth.
One two pet: Petco has had 16 straight quarters of year-over-year sales growth as âpet parents continue to prioritize the health and wellness of their pets.â
Cereal pet lover: In 2018 General Mills splurged $8B to buy Buffalo Pet Food, and last year it bought Tysonâs pet-treats biz. It expects pet-related sales to accelerate this year.
Chewy chow: In its last reported quarter, Chewy delivered accelerating double-digit sales growth and said itâs âa clear indication of the resiliency of the pet category.â
Skimping on your (fur) babies is hard⊠While many Americans have been cutting back on personal purchases, theyâre not trading down on their dependents, which is why the pet category has been so resilient. North American pet-food sales are expected to hit $64B+ in 2027, up from an estimated $49B last year.
Binance now controls over half of crypto spot trading as the industry struggles with centralization
One exchange to rule them all?⊠As FTX died, Binance thrived. The crypto exchange saw its share of global crypto spot trading grow by 7 percentage points after the November collapse of its onetime rival. As of last month, Binance reportedly controlled 55% of all crypto spot trading (think: buying and selling of crypto at market price). And at the end of last year, it oversaw a whopping 92% of all bitcoin spot trades. It's not just spot: last month Binance's share of on-exchange derivatives trading hit 61%. Now US-based exchanges are fighting over the scraps:
2nd (coin)place: Just 6.5% of crypto spot trading takes place on Coinbase, the second-largest exchange by trading volume.
Showing kraks: Crypto.com's and Kraken's spot trading market share has actually declined since FTX's collapse.
The bigger they are⊠Binance may be the world's largest crypto exchange by volume, but that doesn't mean itâs all smooth sailing. This week, the exchange said it would suspend deposits and withdrawals of US dollars through bank accounts. And while Binance published a "proof of reserves" in December, the exchange said that an actual audit (aka: reserves + liabilities) wouldnât happen for some time. Just last month it said it mistakenly mixed customers' crypto with token collateral.
Crypto risks putting many eggs in one basket⊠At its core, crypto's about decentralization (picture: DAOs, DeFi). But as Binance's share of the market continues to grow, the industry is growing more concentrated along with it. That centralization creates crypto market risk, because if one big player falls (like: FTX), it could take large chunks of the industry down with it.
The Crypto Catch-UpâŠ
đ° Spendy⊠The SEC said Kraken would close up its crypto-staking program and pay a $30M fine. The regulator said the exchange had failed to properly register its program, which advertised up to a 20% yield.
đȘ Coins⊠One of the longest-running crypto exchanges, LocalBitcoins, said it's shutting down. The 10-year-old biz initially grew to prominence by facilitating face-to-face meetups where traders swapped $$ for BTC.
đž Flashy⊠Revenue from dark-net markets plunged by half last year, to $1.3B, a new report said. A main driver: last spring authorities shuttered Hydra, a Russian-language market for drugs and money laundering.
What else weâre Snackinâ
Cold: Unilever, which makes everything from Dove soap to Lipton tea to Axe spray, reported dropping sales volumes as higher prices hurt demand. Ice creams like Ben & Jerryâs were the biggest losers.
Equity: The percentage of Black American homeowners rose to over 45% last year, up from nearly 43% in 2019. While low mortgage rates boosted home ownership, the figure still lags behind white households at 75%.
Barbout: Mattel stock fell 11% yesterday after the toy titan behind Barbie and Hot Wheels unboxed disappointing holiday results. Inflation weighed on gift demand in the unmagical quarter.
Cauli: Chick-fil-A is finally testing its first plant-based entrée: a fried-cauliflower sandwich. Alt patties that try to replicate real meat have lost popularity, but fried veggies may have more promise.
Cuts: Yahoo is slashing 1.6K+ employees (a fifth of its staff) as part of a major reorg to its ad-tech unit. The internet OG is giving up on its years-long efforts to compete with Google and Meta on ads.
Friday
- Earnings expected from Enbridge, Spectrum Brands, and Honda
Authors of this Snacks own bitcoin and shares: of GM and Google
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