Flu down under (PRGO)
Australia’s flu season typically occurs between April and October, however like last year it has started earlier. According to the Australian Federal Department of Health and Aged Care there have been more than 17,000 cases of influenza between May 15 and 28. Australian health authorities say more than 5,500 people also get COVID-19 every day. There are also two strains of influenza A, influenza B, H1N1, and H3N2 circulating. 75% of the cases were identified as influenza A, which typically affects mostly children.
The severity of the flu season in Australia appears to be less than last year. There are far fewer hospitalizations and deaths from the flu season so far. The number of people in Australia’s FluTracking program reporting respiratory illness is also less than in prior years as seen in the following chart. Perrigo’s cough/cold business will have a difficult comparison to last year. Production was sold out last year with shortages most acute for liquid cough/cold medicine. If the U.S. flu season rhymes with Australia (which is typical) demand for liquid cough/cold medicine will be strong again.
Low-priced grocery gains traffic (GO, KR)
Lower-priced grocery formats are thriving in the post-pandemic, elevated inflationary environment. Grocers with large private label sections, like Aldi and Lidl, have seen traffic gains at the expense of higher-priced competitors. Traffic to discount grocery chains increased by 9.5% in April compared to January 2021. Fresh format grocers, like Fresh Market and Natural Grocers, saw traffic decline 5.5% over the same period. In comparison, total traffic to grocery stores decreased by 0.9%. Grocery Outlet has seen its store traffic outgain the competitive set while Sprouts Farmers Market has lagged behind all of the public food retailers.
Coffee concentrate (WEST, SJM)
There are customers for whom ready-made coffee is a convenience compared to brewing at home. This is an even larger market for cold brew which takes between 8 and 24 hours. In July, Smucker’s is launching coffee concentrate by Dunkin’. The 31-ounce bottle will be shelf stable and be featured next to coffee beans in the aisle. Customers add hot or cold water to make their drinks. The idea is not new, but it will be the first mass-market coffee brand concentrate. Most customers will opt for cold coffee. There is unmet demand for cold brew coffee. Westrock Coffee is building the largest roasting to RTD packaging facility of its kind to supply a long list of brands looking to enter the category. RTD coffee has been the fastest-growing sub-category in the grocery store since the pandemic started in 2020.
