Most shoppers have changed their grocery behavior (KR, MDLZ, K)
Field Agent is a work on-demand platform that crowdsources the smartphones of 1.5M shoppers. The consulting firm published the results of its consumer shopping behavior, and there were some interesting findings to consider.
Out of stocks have been prevalent among all food retailers, as seen in the following chart:
According to their survey, 83% of shoppers are changing some aspects of their shopping behavior, including:
We have seen similar results in other surveys and commentary from management teams. Some of these themes will benefit particular companies. For example, Mondelez will benefit from increased snacking, Kellogg will benefit from increased breakfast consumption; increased calorie consumption will have a lasting impact. In contrast, grocery stores will benefit from consumers becoming less brand conscious.
Beer industry can’t make up for no on-premise sales (BUD, TAP, SAM)
In the National Beer, Purchaser’s index for April craft beer had a reading of 14, the lowest ever for the craft. A year ago, the index was at 59. A reading below 50 indicates contraction. The declines were driven by the on-premise channel as the shutdown orders only partially impacted March, and March was boosted by off-premise stockpiling. The total beer market reading was 35. Three segments had higher readings YOY, premium lights, premium regular, and below premium, but were all below 50. The imports reading was 32, and it was the first time it had fallen below 50. The only sector to have a reading above 50 is FMBs and hard seltzers with a reading of 72, which was down YOY from 79. The one improvement was that the number of people who have included beer, wine, or spirits with a takeout restaurant order increased to 14% for the week ending April 25, up from 9% over the two weeks ending April 11. For the beer industry, the absence of on-premise can not be made up for in the off-premise channel, but some categories are much more negatively impacted like craft.
Digging into state cannabis trends during COVID-19
Cannabis demand has remained strong during the COVID-19 period. One of the industry’s biggest questions is how demand will be impacted in a recession. However, the sales trends in each state paint different pictures. California has seen robust sales growth in 2020, but a marked deceleration in April. California’s market has several challenges, including local municipality rules, high prices, and a significant illegal market that make it difficult to extrapolate. Nevada has seen sales decrease in March and April (-2% and -26%, respectively). Nevada had a big component of demand from out of state tourists which have effectively disappeared with the stay at home restrictions. Colorado and Washington were the first states to legalize adult use of recreational marijuana in 2014 and are mature markets. Washington’s market is locally driven, while Colorado has a large tourist component, which can explain the divergence in trend between the states in March and April. In newly approved states like Illinois, demand has remained robust. Illinois reported April as the second strongest month this year since recreational use was approved on January 1.
Source: Headset, MBD
Trends have remained relatively stable in the most recent two week period, which should reflect demand without stockpiling as seen in the following chart:
Source: Headset, MBD.
