Grocery demand remains elevated, led by frozen (CAG)
Grocery demand remained elevated for the week ended July 26, according to IRI. Demand reached the highest level since the week of June 21. IRI’s demand index was up 19% YOY, flat WOW. Edible categories were also flat sequentially at up 21% YOY and continued to outpace non-edible categories, which were up 14% YOY. The strongest category remained frozen food, up 27%. The strongest fresh food category remained seafood up 35%, followed by meat up 23%, and produce up 13%. The only fresh food category still declining was deli prep down 20%. Floral and bakery, which were down earlier in the pandemic, were up 8% and 9% YOY in the last week. The nutrition and weight loss category increased by 17% YOY, showing the greater demand for diets. Frozen represents ~40% of Conagra’s business.
Hard seltzer share shifts (SAM)
The two dominant hard seltzer brands, White Claw (owned by Mark Anthony) and Truly (owned by Samuel Adams), have retained their combined share of the hard seltzer category in the most recent two months compared to the first three pre-COVID months of the year. The two brands have maintained their share despite tightness in production supplies and inventory, as seen in the following chart. White Claw lost 640bps of share since pre-COVID weeks while Truly gained 680bps. Inventory availability likely had a role in the share shift. Anheuser-Busch InBev hard seltzer brands (Bud Light, Natural Light, Bon & Viv) lost 420bps of share from pre-COVID weeks to the recent two-month period. Corona hard seltzer lost 60bps of share to 4.1% from pre-COVID weeks after launching in the spring with a $40M marketing budget. Molson Coors hard seltzer brand Vizzy launched in April and reached 1.8% share in the most recent two months while the Coors hard seltzer launch was delayed from the end of July to the fall. It is notable that despite the high rate of growth and numerous new entrants, the two large incumbent brands have retained their share.
Independent restaurant sales lag behind chains (SYY)
Overall sales velocity in open restaurants is down 28% YOY in the week ended July 25. That is a 3% improvement from the prior week, according to Nielsen CGA RestaurantTrak data comprised of 15,000 independent restaurant operators and smaller groups. Major restaurant chain customer transaction declines have been down between 11 and 14% YOY since the second week of June. In the week ended July 19, major restaurant chain total customer transactions declined 12% YOY, 2% better than the prior week according to NPD CREST data (comprises 75 QSR, fast-casual, midscale, and casual diners representing 53% of commercial restaurant traffic). In the week ended July 19, QSRs were responsible for the improvement in transaction declines, which were -11% while full-service restaurants were down 27% (comprised of off-premise +91% and on-premise-62%). Independent restaurants are Sysco’s most profitable customer segment.
