Russia-Ukraine War Sends Global Grain Supply Down and ADM's Earnings Up

Last Week’s Moves

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Welcome to your weekly food & beverage report, where we cover everything you’ll need to know for the week ahead. This week, global events have boosted ADM’s financial performance, the McPlant fails to grow roots in the US market, and Mondelez acquires Clif Bar Co. Let’s dig in. 

ADM’s 2022 second quarter financials are in, and the results are off the charts

Thanks to higher prices for grains like wheat and soy, Archer Daniels Midland’s (ADM) earnings were up 74% for the quarter ending June 30. Notably, the earnings report period ended before Russia and Ukraine agreed to reopen grain shipping ports on the black sea last week. CEO Juan Luciano is optimistic about the agreement between the countries, however remains wary of global repercussions if grain shipments continue to be cut off. 

• Turbulent transportation… ADM is preparing to store Ukrainian grain ahead of September and October harvests, however Luciano pointed out issues in access to oil and crews for shipping cargo in Ukraine will be limited. He expects smaller ships to be allowed to travel first, with larger ships to be granted access later. 
• Wheat woes… Global wheat supplies are on trend to be at a six-year low as a result of the Ukraine-Russia war, global supply chain slowdowns, and serious weather patterns around the world. 

Brand team-ups have mixed results with McDonald’s and Beyond Meat one year into partnership and the Clif Bar Co. acquisition under way

Trying to take root… Last November, McDonald’s (MCD) brought the McPlant, a meat-free burger created with Beyond Meat (BYND) patties, to eight restaurants in the US to test how the menu item could impact its kitchens. Since then, the McPlant was put in 600 different locations. However, the test has come to a lackluster conclusion: the McPlant appears to have fallen short of the stats needed for a nation-wide launch.

• From beef to beyond… In early 2021, McDonald’s and Beyond announced a 3-year partnership. Despite the McPlant’s lackluster performance in the states, the burger has been launched in some international markets  and seeing more positive results. 
• Growing pains… 2022 has been tough on Beyond’s stock price, seeing a 53% drop over this year. While high-profile partnerships with fast-food giants like Pizza Hut (YUM) have made headlines, few tests have resulted in nationwide offerings
   

Snack category synergy… Mondelez International’s (MDLZ) acquisition of Clif Bar and Co. makes sense for Mondelez’s strategy: Clif Bar is snacking-focused and can benefit from the company’s competitive advantages. The $2.9 billion acquisition was announced on June 21, and is set to take Mondelez’s snack business from $300 million in sales to over $1 billion in revenue. 

• Money mover… Mondelez saw $1.6 billion in net income over the first six months of 2022, which was down from the year prior where the company saw $2 billion in net income, however sales rose from $13.8 billion to $15 billion over the same year. 
• Bearish on bars?... Within snacking, the bar category saw a slight drop in sales over the first few years of the pandemic as consumers limited their movements, requiring less convenience in their food choices. 

Other stories…

• Sniff sniff hooray?... European company Air Up has just launched in the US, and brings consumers specially designed water bottle pods that contain natural fragrances to encourage users to hydrate. 
• Cat’s out of the bag… Cat food brand Fancy Feast is opening a highly exclusive limited edition pop up restaurant featuring the brand’s new Medley’s line as inspiration for the menu of food for humans. 
• The opposite of going green… The Coca-Cola company announced last week that it would be changing the packaging of its Sprite soda, swapping out the iconic green bottle for a clear alternative. 

That’s all we have for you this week, do you have anything for us? We’d love to hear from you with stories or recommendations for new sections to include! Drop us a line at news@barchart.com with any feedback or input. 

• Wheats Down by Double Digits
• Soy Market Falls Back
• Corn Weakens out of Weekend
• Corn Holds Higher at the Close