Grocery spending remains elevated, led by frozen food (CAG)
Grocery channel demand remained elevated for the week ended May 31. The following chart illustrates total grocery store sales, edible categories, and the frozen category indexed to pre-COVID levels, as reported by IRI. Overall edible demand growth remained elevated but decelerated for the fourth consecutive week from 130 for the week ended May 3 to 121 in the last week. The frozen category, benefiting from the trends of more food preparation and more interest in freshness and wellness, has outperformed the rest of the grocery store. Frozen and refrigerated foods are roughly 40% of Conagra’s sales.
Frozen food leads to edible grocery category growth (NOMD)
Frozen food has been healthy across many countries during the pandemic. According to IRI, the point of sales growth for the four weeks ended May 17 across all of the tracked countries was strongest in frozen foods. Frozen foods are driven by several trends, including more meal preparation, wellness, freshness, and longer shelf life. Edible categories were generally consistent across countries, while non-edibles were varied. Packaged foods, alcohol, and dairy were also healthy across all the countries except for Greece, as seen in the following table. Nomad Foods, as the leading frozen food manufacturer in Western Europe, is well-positioned to benefit from the shift in meal consumption.
Americans say they are not drinking more, but that’s likely not accurate (BUD)
A survey from APCO Insight reported that six in ten Americans are drinking the same or less alcohol during COVID-19. 35% of respondents say they are drinking the same while 28% report they are drinking less. That includes 11% who say they stopped drinking entirely. Not being able to go to bars or restaurants was the number one reason cited for drinking less. The majority is saying they are drinking fewer sounds similar to surveys that find the majority of Americans think they are above-average drivers.
Off-premise spirits sales over the last 12 weeks have grown 32.6%, wine has grown 27.1%, and the beer category has grown 17.5%. Nielsen estimates volumes would have to increase 22% to offset the losses from an on-premise outlet. The 22% volume threshold would mean alcohol sales would match pre-COVID levels, but total dollar spending would still be down due to the lower markup from retailers. Alcohol has grown faster in the off-premise channel than other fast-growing CPG categories that are up 11.7% over the same time frame. 84% of respondents said they had not changed their drinking habits, and 33% reported that they never drink during work hours while working from home. The non-profit Responsibility.org found that the number of Americans who say drinking any alcohol in the past 30 days has increased to 79% from 71% last year. The POS data is not subjective or self-reflecting and likely more reliable. That points to Americans drinking more at home and even during work hours as work hours blend into non-work hours.
