Morgan Stanley may have downgraded Coca-Cola shares last week (BBI, Mar 17) but JP Morgan sees buying opportunity after shares skidded further amid coronavirus uncertainty. "We acknowledge that we may be early in this call given the uncertainty around when or if the pandemic is contained, limited visibility on the potential uptick in at-home consumption, and the strengthening of the dollar; all of which could drive further negative earnings revisions," wrote analyst Andrea Texeira in moving to "overweight" rating. "However, we believe this represents a unique long term opportunity to own a high quality asset which seems to be pricing in the scenario that volumes will not rebound post the peak of the COVID-19 pandemic. Also, we believe Coke's balance sheet remains solid and we do not see risk to its dividend policy."

It's sign of times: even as Starbucks decided to close most of its US cafes in face of pushback from employees, its RTD partner PepsiCo is in hiring mode. SBUX said Fri that it would close most of its company-operated cafes in North America for 2 weeks, limiting service to drive-thru. "Let's be real. Lattes aren't 'essential'," Rossann Williams, prexy of US company-operated and Canada businesses, said in letter reported by Reuters, echoing phrase of employee who was organizing opposition to staying open (BBI, Mar 19). "But in times of crisis, the government asks convenient food and beverage outlets to remain open when possible for pickup, drive thru, or delivery." The same day PepsiCo - which makes and distributes Starbucks-branded RTDs - announced initiative to reward its frontline staff via $100 benefit for full-time employees over next month. It also said it would hire 6K full-time, full-benefit frontline employees across US in coming months. Employees also will get full pay if they're showing Covid-19 symptoms, are diagnosed with virus or are caring for family members who are. And those who work at facility that must be closed will receive full pay for 12 weeks, PEP said.

Any PR is good PR? Sometimes that seems to be stance of VPX Sports, the Florida-based marketer of Redline and Bang Energy that's been a master of cooking up attention-getting stunts. But it's getting some coronavirus-related backlash around launch of latest product, Redline Noo-Fusion, after ordering 200+ employees to gather for "obligatory, all-hands strategy meeting at a warehouse in Broward County, which has more Covid-19 cases than any other county in Florida," per report from Vice Media. To avoid event, employees had to take a day of paid time off, Vice reported. "Attendees estimated about 100 Bang Energy employees followed orders and showed up to the pep rally," per report. "One said there was no hand sanitizer, but disinfectant wipes were provided. Employees sat in white chairs next to each other, clearly violating the 6-feet social distancing guideline issued by the Florida Health Department." Up front, Bang dancers led party, per TikTok posted and later deleted by VPX exec. As for Noo-Fusion itself, we'd heard it was to be even higher-performance version of Redline, with 10,500 mg payload of active ingredients. Also coming down pike is powder and bar extension called Pristine Protein, we understand.

"The evolution of COVID-19 has been hard and fast—leaving many of our stocks reeling," RBC Capital Markets Nik Modi wrote investors this morn before conf call to evaluate where things stand for CPGs he tracks. "The only silver lining to the current situation is the severity of the disruption gives us only one option: to look at our entire coverage with a fresh eye," he added. On non-alc side, he has upgraded PEP to "outperform" and noted, "we have actually increased our EPS estimates modestly" for several cos including Campbell Soup. Putting pandemic in perspective compared to other "extraordinary events" such as other virus outbreaks and 9-11 terrorist attacks, Nik wrote, "the market has sold-off 11% on average and the selloff lasted 97 days in duration." "This compares to recessions with a 42% average selloff and 511 days in duration," he added. Since market peak on Feb 19, "S&P 500 has sold off 32%, outpacing the selloff from other extraordinary events in just over a month. Whether we peg this against other extraordinary events or assume this is the beginning of a recession, we point out that we are only 32 days into this 'event'—suggesting we have more time until stock prices begin to normalize (at best)," Nik concluded. We will follow up with any interesting points from conf call if necessary.

At time of unprecedented volatility due to spreading pandemic, deal outlook remains murky at best. As we reported Fri, one banker that's deep in weeds on food/bev deals, Whipstitch Capital, reported that spigot by no means has gone completely dry, at least for deals that already were under way, tho some delays are occurring (BBI, Mar 19). At BBI we know of multiple financing deals that we're told are moving forward and of new fund about to formally open its doors. Still, PE Hubwire, which brings considerably broader focus than just CPG, is warning of potential "pulled deals, repricings, MAC invocations," the latter a reference to "material adverse cause" provisions that buyer may be tempted to invoke to escape deal that's already been signed. PE Hubwire already is starting to see pulled deals - today, that included sale of healthcare-focused info play Imprivata by Thoma Bravo that had pricetag expected to exceed $2 bil - and repricing may emerge as general partners "are working to establish valuations in the continuing spiraling situation." So far, no sign of MAC. "Whether a buyer would actually invoke such a clause remains to be seen," writes editor Chris Witkowsky. "These can lead to court battles, recriminations, hurt feelings. I call it the nuclear option."

As bars, restaurants and cafes shut down in face of widening pandemic, foodservice segment is not looking like great place to be right now. But LA-based Barfresh Food Group, which makes portion-controlled, frozen, ready-to-blend bevs for restaurant chains, has managed to pull in $5.87 mil in new financing, from key investors it didn't identify in announcement today. That came on same day BRFH said multinational restaurant operator has confirmed in writing that it's about to commence regional rollout of several items. Chain will be identified once items are on menu, BRFH said.

Amsterdam-based JDE Peet's has taken another step forward in plan for IPO, with European Commission approving new governance structure between JAB and Mondelez that's a key milestone. "This decision satisfies all remaining EU antitrust requirements for JAB with respect to the anticipated IPO," the co said today . . . Montreal-based Mondias Natural Products entered into definitive deal this week to acquire "substantially all assets" of Erablier Inc, a maple water purveyor in Quebec. Deal is valued at $1 mil (Canadian), to be paid via 1.67 mil shares covering $250K, with shares held in escrow and released at rate of 20% for every $1 mil of net sales from Erablier products. A 4% royalty rate could yield an additional $750K. Addition of "unique ready-to-market beverage with natural ingredients, from the largest source of plant-based water in North America, is a great entry into the competitive functional beverages market," said Mondias ceo Patrick Frankham.

Plant water play Asarasi Sparkling Tree Water and "mindful drinking" educator co Club Soda are among new cohort of 17 startups to enter Anheuser-Busch InBev's 100+ Accelerator, which targets cos working on front lines of sustainability issues, per its credo. The group, which was winnowed from 1,200 applications and kicked off at ABI hq last month, brings unusually broad range of stages of development beyond main focus of seed to Series A, including pre-seed and post-Series B, 100accelerator.com website notes. Others in new cohort include EcoPackers, which transforms agricultural byproducts into plastic alternatives; Conscious Container, which seeks to increase use of returnable glass containers, and Upcycled Nutrients, which transforms biosolids into fertilizers. The new entrants apparently were announced last month, tho we're just hearing about them now and haven't encountered any prior coverage. Since Asarasi seems to be first actual bevco to win a spot in 100+, we'll offer a few more details here on how accelerator is structured and operates.

"We're dealing with these massive spikes in business. Yet the world is falling apart," Vita Coco cofounder/ceo Mike Kirban told CNN this week, citing uncomfortable irony underlying the sudden prosperity of many bev marketers, particularly those offering hydration or immunity-boosting items (BBI, Mar 19). That more than doubling of sales has created nothing less than "crisis of conscience" at NY-based co, which today pledged $1 mil to pair of hunger-relief orgs and urged other cos to consider similar humanitarian moves. "It's been really jarring seeing the business benefit from rapid growth amidst a growing global crisis," per statement from Kirban this afternoon. "I feel that it's our responsibility as a business to do what we can, to help support people who need it most, while we're in the position to do so. We don't know what the future will bring, but for now, we feel that the right thing to do is to invest into organizations that can use it to directly impact communities affected. I hope this pledge serves to encourage other businesses in a similar position to evaluate their strategies and take similar action." First $500K donation will be made immediately to selected orgs, Feeding America and No Kid Hungry, to support their pandemic response efforts, Vita Coco indicated.