Frozen food picks up in the UK (NOMD)
For the week ended September 19, the UK's total CPG index remained flat to the prior week at +7%. The frozen category saw an acceleration from +12% to +16% in the most recent week. The frozen category was tied with beverage alcohol for the strongest department in the grocery stores. The frozen category was driven by ice cream, desserts, and frozen fish (+21%). Nomad Foods is a market leader in frozen fish. Produce sales in September are up 6% after three weeks of being up 1-2% during the famous "Eat out to help out" program. The UK is Nomad Food's largest country by sales, representing 31% of overall sales.
Structural change in where to work (SYY)
According to a CBRE global survey of employees at 32 companies conducted between June 16 and August 7, 90% of respondents felt that productivity at home is the same or greater than the office (see the following chart). 85% of employees prefer to work remotely at least two to three times a week in the future. Last week Larry Fink CEO of Blackrock, said, "I don't believe BlackRock will be ever 100% back in the office. I believe maybe 60% or 70%, and maybe that's a rotation of people…." One of the structural changes from the pandemic may be the acceptance by employers to have more flexible workplace arrangements after a broad test did not result in a measurable drop in productivity. Changes in where people work will lead to structural changes in where they eat as well.
What's in the seltzer? (FIZZ)
Consumer Reports published an article yesterday testing heavy metals and PFAS chemicals in popular water brands. Carbonated water was found to have higher levels of PFAS chemicals, and the article caused shares of National Beverage Corp. (FIZZ) to trade-off yesterday afternoon. PFAS chemicals have been given the ominous name of "forever chemicals." The magazine tested 35 noncarbonated and 12 carbonated waters. The federal government has only issued voluntary guidance for PFAS, saying it should be below 70 parts per trillion. Some states have lower limits of 12 to 20 ppt. At the same time, the International Bottled Water Association says it supports federal limits of 5 ppt for any single compound and ten ppt for more than one. Only two of the noncarbonated waters tested had PFAS levels above one ppt, while seven of the 12 carbonated waters were above one ppt, as seen in the chart below.
This report will not be popular. If the higher PFAS levels are due to the carbonation process, then hard seltzer would seem to be at risk as well. Hard seltzer adds carbonation to the drink; it is not part of the brewing process. When 2020 couldn't get any worse, one of our most popular drinks is bad for us? Hold on, it's important to note that PFAS chemicals have been found in rainwater, so nearly all surface water has detectable levels. The majority of municipality tap water has PFAS levels above 1. NYC tap water was found to be 2.3 ppt while Bergen County, NJ was at 51.4, and Miami was even higher. So keep bubbling or get your water from wells several hundreds of feet deep.
