Haypp Group reports Q3'24 soon. Some thoughts:
As mentioned in my Sept. note, I don't find the Swedish snus license issue alarming. Haypp will implement complete PoS + PoD verification, rendering the reason for revocation moot. The appeal process can draw out the process 1-2 years, in which case snus will already be a far smaller piece of the total pie. There may be a slight hiccup in the interim if switching to complete PoS + PoD deprives some rural consumers, but nothing that moves the needle materially when looking out further.
Google's last large algo update began on August 15, and the rollout ended in early September. Unsurprisingly, this caused some SERP volatility amongst Haypp's sites and competitors, moderating into October. While the net result looks favorable for Haypp's portfolio in the aggregate, it will be interesting to see if any impact is noted during remarks.
The California situation is front-and-center. The temporary suspension of state sales obviously drags on Growth Markets, but above all else, how Haypp addresses all stakeholders is paramount. They undoubtedly have comprehensive data, allowing a complete review of their processes. Also, note that Haypp's US sites no longer list shipping from Colorado or New Jersey warehouses, leaving only Texas listed. It is speculative, but this could reflect a change in direction regarding 3PL reliance, either relating directly to the California situation, relying on E-Motions for greater warehouse automation, or both.
Added to the mix of variables affecting the fast-growing US, the ZYN shortage persists despite production capacity improvements. Capped ZYN sales will have pushed more sales into other pouches, driving the average dollar order size further down.
While it will not be reflected in Q3 figures, Haypp's US sites and competitors have routinely shown significant outages of most ZYN SKUs during October and November so far. For Haypp, this likely correlates to running out of stock despite capping sales. A more speculative (and dangerous) view would be that PMI may be less inclined to feed the online channel in the current climate while zyn (dot) com sales remain off and PMI completes its supply chain and market audit to identify bad actors handling illicit volumes (foreign wholesalers, sites selling non-US versions, etc.).
Emerging Markets will be treated as an afterthought—and perhaps rightfully so, given the issues facing Core and Growth Markets. Nonetheless, reinvestment and growth rates of EM, along with any disclosures providing more transparency, will be welcomed.
I look forward to reading the results, hearing management's remarks, and providing my perspective in a future note. No matter how you chop it, Haypp offers excellent insights into how the industry, specifically the NP category, is evolving.
