The meeting was presided over by Karen Seaberg. Mrs. Seaberg owns 22.3% of the common stock and 67% of the preferred stock. I had a chance to chat with her after the meeting and thought she was quite nice.
CEO Gus Griffin gave an overview of the company and its goals. MGP's five goals are: maximize production, capturing a larger share of the value chain, investing in growth, risk management, and to build the MGP brand. Last year, Griffin had a goal of quadrupling op income over five years. In one year, the goal was achieved. 2014 operating income was $8 million. 2015 operating income was over $39 million. Gross profits were improved by 106%, gross margins by 880 basis points, distillery products gross profits by 127%, and ingredients 29%.
The exhibits of products were quite impressive. Sample of their Till American Wheat Vodka were given out. I demurred as it was 10 a.m. in the morning. Talking with one of their salesmen, he told me some of the supermarkets and liquor stores that were receiving shipments in the area. Two large chains are Hy-Vee and Price Chopper in Missouri. Fiber bars were given out to showcase the company's food ingredients division. MPG's Metze Whiskey was on display. A bottle costs $75.
Griffin noted the areas for the foods division: high fiber foods, Non-GMO, protein, and plant based protein. I was surprised to hear about non-GMO. I suppose that MGP is only doing what the consumer wants. I don't know how much they produce for protein bars but that's a large market.
The spirits division is trying to partake in three trends that are affecting the industry. The first is that distilled spirits are taking market share from beer. The second is that whiskey is taking market share from "white products" like vodka and gin. The last is that the consumer is paying up from premium brands. Attendees were all given a bottle of Cloud's Batch '41 Whiskey. That was a nice perc for coming.
MGP roots were in processing grain and other ag products. You can see that the company is trying to grow beyond this. We own this stock for clients at a cost basis of $19.50. The stock has been pretty volatile as of late and has probably been sold off with the overall market. This is a long term hold for us. There are only a handful of publicly traded liquor companies in the world and this is one. As the company keeps expanding its footprint, it should be accretive to shareholders.
Disclosure: I am/we are long MGPI.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.