Mid-quarter sales update (UTZ)
Yesterday, Utz Brands provided a mid-quarter update on retail sales trends for October and November. The company said they wanted to correct inaccurately low previously reported tracker data. The company said that for the 4 weeks ended October 31, UTZ retail sales measured by IRI increased 8.7% YOY and 9.7% on a two-year CAGR. For the 4 weeks ended November 28 retail sales, UTZ retail sales increased 10.9% YOY and 10.8% on a two-year CAGR. For the 12 weeks ended November 28, UTZ retail sales increased 9.7% compared to 7.7% in the 12 weeks ended October 31.
The most popular potato chips feature spicy, dramatic flavors and those perceived as a healthier choice. Potato chip sales declined in the convenience store channel early in the pandemic as consumers traveled less and reduced their shopping trips. The C-store channel has had a speedy recovery, and in the 52 weeks ended October 31, potato chip sales reached almost $1.8B, up 8% YOY. Tortilla/tostada chips grew 10.4% to $1.2B. The most popular flavors are Backyard Barbeque, Salt and Vinegar, Sour Cream and Onion, Sweet and Spicy Jalapeno, Flamin’ Hot, Sea Salt, and Crushed Black Pepper, etc. highlighting the need to innovate flavors.
|
For a replay of our UTZ, Black Book, CLICK HERE. |
Drizly annual report (SAM)
Drizly said 60% of the 500 retailers in its annual report said they would devote more shelf space to RTDs in 2020. 11% of retailers said they would give less shelf space to RTDs. 50% of retailers said they would devote more shelf space to craft beer, while 8% said they would reduce the shelf space. 50% of retailers said they would give hard seltzer more shelf space, while 23% said they would reduce the shelf space. Hard seltzer was the category with the most retailers planning to reduce shelf space. 51% of the retailers predicted that CBD and cannabis-infused products will have the highest growth potential in 2022. The most commonly cited concern for retailers is product shortages (54%), followed by price increases (22%) and labor shortages (20%). The average unit price for products purchased through Drizly increased 6% in 2021. 73% of retailers said they expected holiday sales to meet or exceed last year, while only 12% said they expected lower sales.
Union votes down agreement (K)
The Bakery, Confectionery, Tobacco Workers, and Grain Millers International Union overwhelmingly voted not to ratify the tentative agreement with Kellogg’s. The proposed contract included the cost of living wage increases, expanded benefits, and hiring more employees from the lower-tier of compensation. Many workers were unhappy with the provision that lifted the number of lower-tier employees the company could hire. They were concerned that there would be more employees at the lower tier that would control future voting power. The union has been on strike since October 5. Kellogg’s has already hired permanent replacements for some vacated positions, but finding skilled labor has been difficult enough without having to cross picket lines. Kellogg’s blamed the union for setting unrealistic expectations for the employees. After voting down the tentative agreement, the negotiations seem more intractable. Boycotting Kellogg’s has received very little interest on social media, so the missing supply's sales impact is likely limited.
