Flu, cough, cold season begins (PRGO)
Stafford High School in Virginia saw more than 1,000 of 2,100 students enrolled out sick with the flu in recent weeks. The school was closed and deep cleaning and disinfecting were performed over the weekend. A similar situation happened in a high school in San Diego earlier in October. Numerous children’s hospitals are at or near capacity due to a surge in RSV, a respiratory virus that is relatively mild for adults, but in children can be life threatening if it causes pneumonia or bronchitis. Nationwide 3% of patient visits reported through ILINet were due to respiratory illness as seen in the chart below. The flu season has just begun, but Australia experienced an early, record start this past summer. There is no vaccine for RSV. Perrigo cough/cold business would benefit from a “normal” flu season against the COVID comparisons.
WINE GROWS IN SEPTEMBER (NAPA, VWE)
Domestic wine sales grew 5% in September YOY. In the off-premise channel wine sales decreased 4% YOY in September. DTC shipments were flat in September. The recovery and inflationary price increases in the on-premise channel are driving the growth in wine sales this year.
Europeans make food changes (MDLZ)
According to an IRI survey, 61% of consumers in Europe’s largest markets say they are worried about how the cost of living crisis is impacting them personally. Over 70% have already made changes to how they buy and use everyday items. 58% of respondents said they have cut down on essentials and 35% said they have dipped into their personal savings and are taking out loans to pay bills. 51% of consumers said they are ordering less cooked food to be delivered to their homes while 47% said they are planning to eat out less. 62% of respondents said the price was the influence to choose a new brand while 37% said the higher promotion was the influence. The market has been concerned about the headwinds for European disposable income for some time now, so it appears like the winter needs to worsen to send the shares lower.
Bang busting (MNST)
Bang Energy continues to be hurt by out of stocks after its Chapter 11 bankruptcy filing and its distribution agreement with PepsiCo ending. In the two-week period ending October 8 sales fell 26.3% and were down 9.4% in the 52-week period. Volumes fell 29.9% in the two-week period and 10.9% in the 52-week period. Several retailers are rumored to be dropping the brand. The bankruptcy judge has allowed VPX to use up to $34M of its $100M credit line until a later hearing is held. Monster Energy will see a small tailwind from its competitors’ challenges. Red Bull also enters a new phase with the passing of its co-founder Dietrich Mateschitz.
