💉 The Delta effect

Moving through the Greek alphabet… Covid variants. But one has been taking over headlines this summer: the Delta variant has led to a surge in hospitalizations among the unvaccinated. The CDC says Delta now makes up 83% of new US corona cases — it's 50% more contagious than the original Alpha strain. Now, Covid restrictions are cropping back up across the country, both from the government and companies.

• On the gov't side: Last week, the CDC recommended re-masking indoors, even for people who are vaxed. Meanwhile, half of California is back under mandatory indoor mask mandates.
• On the private side: This week, Home Depot, McDonald’s, and Target said they would require workers to wear masks in many locations, regardless of vax status. Walmart and Disney are even requiring some workers to get the shot.

Compare it... The March 2020 shutdowns led to the US’ biggest quarterly GDP drop ever. It’s not clear how much Delta could impact the economy — but it’s not expected to be nearly as severe, since 70% of US adults are vaxed now. While the chances of more US lockdowns are low, investors are worried Delta will slow the recovery:

• The US economy has experienced impressive growth this year. But it's expected to cool from here, as global shortages and Delta put a damper on the boom.
• The labor market is already tight, and Delta could make it worse. Businesses could be more strapped for workers if employees get sick — or avoid returning due to Delta fears or mask mandates.

Hold the pulp... Tropicana, America's top refrigerated OJ brand, was founded in 1947 by an Italian immigrant who arrived in the US with $25. In 1998, Pepsi bought it for $3.3B. Now, Pepsi is selling Tropicana, Naked, and other juice brands in North America for... $3.3B.

• Sour on sugar: Pepsi said the deal will allow it to focus on its growing portfolio of healthier snacks and zero-calorie bevs. Like: Bubly sparkling water and Gatorade Zero.
• Functional-first: As consumer preferences shift, Pepsi has been investing in "functional beverages" — drinks that provide more than just sugar, enhanced by a healthy(ish) touch.

Add the B vitamins... As sugar loses steam, bev giants are replacing sodas and juices with vitamin-packed energy drinks and enhanced waters with a "purpose." The global market for functional bevs is expected to hit $130.5B this year, up 8% from last year. These premium drinks also command higher prices than your average can of carbonated syrup.

• Relax: Last year, Pepsi intro’d Driftwell — water enhanced with magnesium and L-theanine for relaxation (ASMR in a can).
• Energize: Pepsi also bought Rockstar Energy for $4B, and launched new versions featuring Hemp and B Vitamins.
• Cleanse: In January, Pepsi partnered with Beyond Meat for plant-based snacks and drinks. It's also tried to "health-ify" its own brands with Lay's baked chips, Quaker breakfast bars, and Sabra hummus cups.

• Crypto: SEC Chairman Gary Gensler said that the "Wild West" of crypto will be regulated to the maximum extent possible.
• Shut: GM is shutting down three pickup truck plants because: chip shortage. Meanwhile, Google plans to build its own phone chips (sorry, Qualcomm).
• Wipes: Clorox's "health and wellness" sales fell 17% last quarter, as you stopped disinfecting every visible surface.
• Surge: Lyft notched its first adjusted profit last quarter, and sales more than doubled from a year ago thanks to returning riders.
• Frenemies: Alibaba, the “Amazon of China," saw its profit fall last quarter as it boosted spending while ecomm competition rises.
• Debut: Facebook will premiere a movie exclusively on its platform for the first time. The move could help smaller filmmakers distribute their work.

• Earnings expected from Uber, 10x Genomics, Booking Holdings, CVS, Hyatt, Kraft, MGM Resorts, Sony, Toyota, and Wynn

Authors of this Snacks own shares of: Amazon, CVS, Uber, GM, Walmart, Google, and Disney

ID: 1747657