US & Global Economic Impact Analysis and Forecasts

Freedonia analysts and economists are sharing their insights on how major events are impacting different parts of the US and global economies.

A Safer Dining Experience Through Technology

Are you tired of cooking at home or ordering take-out food? Is the replicator used to synthesize complete meals on Star Trek starting to sound like a good alternative food source right about now? Don’t despair. Some restaurant operators are working to lure you back by investing in high-tech solutions to improve sanitation and make you feel more comfortable dining on premise.

For example, Maryland-based Silver Diner recently installed a three-tiered air purification system at 20 of its restaurant locations. The system includes hospital-grade HEPA filters and ultraviolet lights that disinfect air moving through the air conditioning system. An additional set of ultraviolet lights is used to disinfect surfaces overnight.

Silver Diner executive chef and co-founder Ype Von Hengst reports that the chain is the first in the US to install such a system. It’s too early to tell how much this will impact the restaurant’s dine-in business, although Von Hengst says that initial customer feedback has been very positive.

Other restaurants are making available up-to-date electronic menus that diners can access on a mobile device when ordering and allowing them to pay for their meal using a contactless payment system. Touchless systems can also be used to help ensure employee health and safety at restaurants and other businesses. One example is the Check Point Temperature Pedestal developed by P&O Global Technologies. The unit, which uses facial recognition to create a contactless check-point at a door, includes a thermal camera to verify that employees aren’t running a fever as well as a hands-free hand sanitizer dispenser.

Although fewer people now believe that the coronavirus is a health threat to them personally than they did in May, three-quarters of US adults are still reporting in the August Freedonia Group/Packaged Facts survey that they are eating less in restaurants due to the coronavirus. Therefore, all appropriate measures are needed to improve confidence and increase dine-in traffic at restaurants.  

For more information and discussion of opportunities, see Packaged Facts’ food- and beverage-related reports, including US Food Market Outlook 2020: Home Cooking, Grocery Shopping & Food Trends in the Age of Coronavirus, US Beverage Market Outlook 2020: Grocery Shopping & Personal Consumption in the Coronavirus Era, and Food Carryout & Delivery as well as the companion report with timely consumer insights from our in-house survey capabilities. The Freedonia Group’s extensive collection of off-the-shelf research provides a strong complement to packaged food industry analysis, including Global Foodservice and packaging industry titles such as Foodservice Single-Use Products and Global Foodservice Single-Use Products. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Covid-19      Food & Beverage      Services    

Have You Used Your Extra Time At Home This Year To Get Fabulous or Did You Get Flabby?

Many homebound people have spent the summer exercising, boosting sales of bicycles, golf clubs, and treadmills at one of the few retail chains that sells them all – Dick’s Sporting Goods. The company’s e-commerce sales nearly tripled in the quarter ended August 1st, offsetting temporary store closures and more than doubling its income from operations over the same period last year.

Dick’s is dealing with inventory constraints in some product categories as a result. “If you’re going to walk in our store, it’s still going to look like our fitness business is really depleted,” said Edward Stack, the firm’s Chairman and Chief Executive Officer. “But the flow product we have coming in is kind of going out as fast as it’s coming in.”

With commercial fitness centers and community recreation facilities closed, consumers are looking for ways to keep fit at home, setting off skyrocketing sales of fitness equipment and backlogs from most suppliers. Sales of everything from basic hand weights to newer at-home workout equipment with connections to trainers or group fitness instructors have benefited.

Digital orders helped drive Dick’s revenues during the COVID-19 pandemic. Online and curbside pickup orders accounted for about 30% of its second quarter sales. Company executives expected to see a large drop in curbside orders after all of Dick’s stores reopened in June, but that was not the case. The firm now expects curbside service to remain important over the long term, with many consumers continuing to be reluctant to do in-store shopping, particularly during busy periods like Christmas. Additionally, consumers have found that they just like curbside pickups, allowing the convenience of online shopping combined with the immediacy of in-person shopping.

Results from recent Freedonia consumer surveys indicate that even in August (more than 5 months after the COVID-19 outbreak was known to spread widely in the US) nearly two-thirds of US adults still report shopping less at brick-and-mortar stores and ordering purchases online more because of the pandemic.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, particularly for consumer goods, with reports such as Bicycles: United States, Global E-Commerce, Global Pools & Spas, Outdoor Living Products 2020, and Sports Equipment: United States. Freedonia also offers an expanding catalog of COVID-19 Economic Impact reports, which highlight how various industries are responding to the current crisis with a comparison to recent recessions. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Consumer Goods      Covid-19    

Is the Worst of the Pandemic Over for Equipment Manufacturers?

After declining more than 20% between February and April because of the disruptions caused by the COVID-19 pandemic, new orders for US made durable goods grew for the third straight month in July, according to a new Census Bureau report. Orders for durable goods, which are designed to last at least three years, rose 11.2% in July from the previous month, following a 7.7% increase in June.

The double-digit gain posted in July is all the more remarkable considering the record number of new coronavirus cases recorded in the US during the same month.

Time will tell if the increase in durable goods orders will persist as the country continues to reopen its economy and capital spending turns upward. A particular challenge will be operating manufacturing in a pandemic era that requires social distancing among line workers and the specter of additional waves of infections having over the economy.

Growth has been especially strong, albeit from a low base, in the auto industry as sales begin to recover from the worst stretch of the pandemic and plants increase production. New orders for motor vehicles and parts rose 21.9% in July, surpassing pre-pandemic levels. Sales are benefiting from discounts being offered at the dealer level as well as a trend of consumers who had previously used public transportation and ride-share services seeking the protection of riding in their own vehicles.

The worst performing manufacturing industry was nondefense aircraft and parts. Orders were negative in both June and July, reflecting the poor business conditions that continue to haunt the air transportation industry as both business and personal travel activity remains sharply curtailed.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, particularly for machinery and equipment, with reports such as Commercial Refrigeration Equipment, Global Food Processing Equipment, Global Material Handling Equipment, Global Off-Road Equipment Technology 2020, and Global Packaging Machinery. Freedonia also offers an expanding catalog of COVID-19 Economic Impact reports, which highlight how various industries are responding to the current crisis with a comparison to recent recessions. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Covid-19      Industrial Components      Machinery & Equipment    

Whatever the Question Is, Pizza Is Always a Good Answer

The agricultural sector has been hit hard by the COVID-19 pandemic as sales to the foodservice industry have plummeted. Some farmers have responded by opening up their own “pizza farms” where consumers can get their favorite toppings on pies made using locally grown ingredients.

Pizza farms are not really new. Two decades ago, farmers in the Upper Midwest began building wood-fired ovens and serving pizza outdoors on summer nights.

Pizza farming has since spread across the country, with a number of new pizza farms opening up this year as farmers work to make up for lost sales to restaurants. Like drive-in theaters, pizza farms are a good summer destination for people looking to do something fun in an outdoor setting where social distancing less of a concern.

This also capitalizes on the farm-to-table dining trend, but brings the table even closer to the farm. Locally grown food is seen by many consumers as fresher, higher quality, and more environmentally friendly than food sourced from factory farms and trucked in from other parts of the country.

The homegrown toppings change depending on what’s currently in season. “If you can grow it, we have put it on a pizza,” says Curtis Millsap, who operates a pizza farm in Springfield, Missouri.

Some pizza farmers even raise cattle for cheese and pigs for meat.

Can taco farms be far behind?

For more information and discussion of opportunities, see Packaged Facts’ food- and beverage-related reports, including US Food Market Outlook 2020: Home Cooking, Grocery Shopping & Food Trends in the Age of Coronavirus. The Freedonia Group’s extensive collection of off-the-shelf research, including the packaging industry, provides a strong complement to packaged food industry analysis. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Consumer Goods      Covid-19      Food & Beverage    

It’s Good When Things Aren’t As Bad As You Thought They Would Be

Farm equipment giant Deere reported on August 21 that it expects its net income to be about $2.25 billion in 2020, up from a high-end estimate of $2 billion for the year made in May. Why? Because the sales declines in the company’s Agricultural and Turf segment this year will not be as steep as previously expected.

This will be due to both farmers replacing older equipment and a boom in landscaping-, hobby-, and home improvement-related spending among non-professionals. Sales are also holding up better than anticipated in Deere’s Construction and Forestry division. Recent price increases and “broad employee-separation programs” due to be completed by the end of the year are also expected to have a positive effect on the firm’s bottom line.

Deere’s new earnings estimate for 2020 is 31% below the $3.253 billion in net income it posted in 2019. Still, it represents a positive result in a year when industry sales of agricultural equipment in the US and Canada are expected to be down 5% to 10% and industry sales of construction equipment are expected to decline 20% in North America.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, including Global Agricultural Equipment, Global Forestry Equipment (and its companion COVID-19 Impact Report), Global Off-Road Equipment Technology 2020, and Global Power Lawn & Garden Equipment. Freedonia also offers an expanding catalog of COVID-19 Economic Impact reports, which highlight how various industries are responding to the current crisis with a comparison to recent recessions. Freedonia Custom Research is also available for questions requiring tailored market intelligence.