"Even though food services orders are back, they've gone from 1/3 to about 2/3 of normal. We're at about 2/3 of normal. What is not there in food service are schools, hotels… cafeterias." – Joe Sanderson, CEO of Sanderson Farms May 18.
Produce sales say Americans are cooking a lot more (SFM, KR)
Fresh produce sales over the last three weeks point towards elevated grocery spend continuing, driven by the calorie shift to food at home. Fresh vegetable sales grew 23.1% for the week ended May 10, down slightly from 24.0% the previous week. Since the pandemic began from a behavior perspective, fresh vegetable sales have grown over 15% every week except one. Fresh vegetable sales may indicate a better run rate than other categories because they are more difficult to stockpile and consume later. The produced item that is seeing the strongest gains during the pandemic is potatoes. Fresh fruit sales grew 11.7% for the week ended May 10, similar to the prior week. Many of the fresh fruit items are down in price, likely reflecting the changed demand conditions. Pineapple prices were 17% lower, peaches were 14% lower, avocados were 13% lower, and melons were 10% lower.
Mexicans are dying without beer (STZ, BUD, HEIA)
AB InBev and Heineken shut down their factories at the beginning of April under the orders of the Health Department, and much of the country ran out of beer within a month. At least a dozen states went even further and outlawed or imposed significant restrictions on alcohol sales. At least 138 people died in the Mexican state of Jalisco at the end of April from drinking adulterated alcohol. Many of the 53 deaths in Puebla have been linked to a wake where attendees drank moonshine containing methanol. In Yucatan, 38 people have been documented so far from dying from alcohol poisoning. In one small town in Morelos state, 15 people have died from alcohol poisoning from the same source. In the border states, the demand has been filled by a black market re-importation of Corona and Modelo Especial. Earlier this week, Sinaloa lifted its ban on alcohol sales while Nayarit removed its restrictions after admitting that the restrictions did little to reduce sales. Governor Echeverraria Garcia said, "Alcohol consumption remained practically unchanged, fueled by a large black market allowed by bad second-level officials throughout the state, corrupted by criminal gangs." Mexico has confirmed nearly 6,100 deaths due to COVID-19. On May 18, the country began a gradual re-opening of certain businesses like car manufacturing, but the beer remains a non-essential business. We added STZ to our Best Idea Long list yesterday and are hosting our Black Book presentation on Tuesday at 2 PM.
PEP Going DTC
PEP is developing a new channel - Direct To Consumers. Pepsico is cutting out grocery stores and selling directly to consumers through new websites. Shopping habits have changed because of the coronavirus outbreak, and companies are responding quickly. Consumers can shop on PepsiCo's PantryShop.com and Snacks.com for food and beverages. PantryShop.com offers kits in different categories, such as snacking, hydration, family favorites, and protein. Each kit has a variety of PepsiCo products and ranges in price from $29.99 to $49.95. Snacks.com has more than 100 different products that do not have to be purchased in a bundle. "We've seen incredibly strong demand for our snacks during this time, and Snacks.com offers consumers another way to purchase the products they love, delivered right to their door," Michael Lindsey, chief transformation and strategy officer for Frito-Lay North America, said.
