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.

Off-Premises Dining: The New Normal

Prior to the COVID-19 pandemic, the idea that a restaurant (save for the fast-food segment) would devote serious resources to expanding its operations in the take-out sector would be treated with derision. Why, after all, would a restaurant operator choose to sacrifice valuables in appetizers, beverages (particularly potent potables) and dessert? However, the COVID-19 has dramatically changed how the restaurant industry looks at carry-out: 

  • Many consumers are leery of eating in a restaurant (as of the June 2021 edition of the Freedonia Group National Online Consumer Survey, 52% of respondents still noted that they were eating less often indoors in restaurants because of the pandemic), but still desire their favorite dishes from local eateries.
  • A number of states and localities have loosened liquor laws, allowing the to-go sale of alcoholic beverages – thus reserving a source of revenue for many casual restaurants.
  • While dining apps (e.g., UberEats, DoorDash, and Grubhub) have become increasingly popular (as of the June 2021 edition of The Freedonia Group National Online Consumer Survey, 27% of respondents noted that they were ordering a meal from a restaurant via a 3rd party app more because of the pandemic), the fees they charge can add greatly to the cost of a meal.
  • Restaurants have expanded curbside delivery as a way to recapture market share (as of the June 2021 edition of The Freedonia Group National Online Consumer Survey, 34% of respondents noted that they were ordering carry-out from a restaurant more often because of the pandemic).

A number of restaurant chains have announced plans to expand curbside delivery options, refurbish restaurants to exclusively cater to drive-through customers, or launch new operations specializing in pickup and delivery. In most cases, this involved adding kitchen capacity dedicated to carry-out and delivery orders as kitchens were not equipped to handle off-premises orders along with a busy period of on-site dining. However, the space near the entrance meant for greeting and seating diners was not enough to also accommodate delivery and carry-out operations.

Thus, the recent news by TGI Friday’s that they would be developing a small format restaurant devoted to curbside and off-site delivery was of interest. Given the chain’s reputation as a leading casual sit-down restaurant, this entrance into the world of off-site dining can be interpreted to indicate that this will be a permanent change to US dining habits – even after the threat of the pandemic recedes.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Covid-19      Food & Beverage      Services    

Missing Something From Your List For This Holiday This Season?

If you’re having a hard time finding a traditional item or that perfect gift for your holiday celebrations, there are a lot of potential reasons behind that.

We’re all familiar with supply chain challenges, whether it’s misplaced shipping containers, high-priced air freight, or not enough truckers to get the products to retail shelves or your door. By now, this isn’t news. In fact, many shopped early to be sure they could get orders in time. Still, mail has been slow (personally, I saw a delivery take 2 weeks to go from Philadelphia to Cleveland), but last mile delivery drivers can still be seen out making deliveries after 10 PM and even in the overnight hours.

High demand…that’s also not new, although the products involved have continued to shift. Many of us have had the same ideas for how to spend our pandemic period, from home baking to gardens and home pools to camping and hiking to outdoor socializing in backyards and event spaces, or buying chicken (alive for eggs or prepared for eating). So a lot of things are in short supply mainly because so many of us want them. We have to be flexible and willing to wait – and possibly pay high prices – for these in-demand items.

But what about hackers? Yes, cyberattacks have been disruptive this year. Well-known production disruptions due to hackers included

Freedonia analysts continue to track changes in supply chains and other challenges to production that create both roadblocks and opportunities for market participants and potential entrants.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, particularly our series of studies in the Consumer Goods and Packaging industry catalogs. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Food & Beverage      Industrial Components    

Pandemic-Era Home Bakers Go Pro

The pandemic led to baking booms. In fact, according to the November-December 2020 edition of the Packaged Facts National Online Consumer Survey, 25% of respondents who bake noted that they have baked more than usual since the start of the pandemic. Additionally, 6% of home bakers noted that they have taken up sourdough baking – a particularly trendy type on social media – this year.

Many of these home bakers turned it from a hobby into a serious endeavor. Enrollment at culinary schools and the launch of small baking businesses is up as more home bakers consider turning the hobby into a career change. Some were driven by necessity as their previous employment was shut down or limited by public health rules while others were motivated by the now-or-never types of emotion of the pandemic to follow their bliss.

As these new home/pro bakers expand, key opportunities to do so in a manageable way include:

  • upgrading home kitchens and appliances
  • joining a commercial kitchen cooperative
  • leasing “ghost kitchen” space with a foodservice operator
  • going mobile with home delivery and food trucks

Regardless of how they expand, the 59% of us who have been eating more comfort foods because of the pandemic (November-December 2020 edition of the Packaged Facts National Online Consumer Survey) will find more ways to enjoy a variety of fresh baked breads, cakes, and treats.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, particularly in the Packaging area and Global Major Household Appliances, as well as analysis from our sister publisher Packaged Facts, including Home Baking: US Market Trends & Opportunities and Chocolate Candy: US Market Trends & Opportunities. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Consumer Goods      Covid-19      Food & Beverage    

Mergers & Acquisitions Are Booming in 2021: Key Factors Driving Increased Activity

M & A activity has been very busy this spring. Across a wide variety of industries, we’re seeing a range of announcements from market leader combos to roll-ups of smaller, regional operations. But what’s behind this rise in activity?

Here are a few key factors driving acquisition and divestiture activity across the economy in 2021:

  • Owners of smaller firms are looking to retire after their businesses’ survived the COVID-19 pandemic (or in some cases, these businesses struggled and owners did not want to rebuild).
  • Certain industries with high pandemic-era sales (e.g., construction goods suppliers, home improvement distributors/retailers, packaged food companies, grocers, lawn and garden equipment and supplies firms) are flush with cash and high stock values and are looking to expand.
  • Pent-up interest from the limited activity of 2020, as transactions that were planned or considered pre-pandemic were put on hold due to economic uncertainty or the difficulty of completing due diligence when you aren't traveling. Some of these previously planned transactions are now going through.
  • Expectations of higher tax rates are leading some firms to cash out now or to make shifts that put them on better footing.
  • SPACs (special purpose acquisition companies) are being increasingly used for acquisitions to expand existing public or private companies.
  • Companies are reevaluating their business operations in the post-pandemic era and are sometimes making changes to what they see as their core operations, or are building on key capabilities that have grown over the course of the pandemic.

Freedonia Group analysts are keeping watch across a wide variety of industries for changes that portend market movements and shifts in the competitive environment.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Chemicals      Construction & Building Products      Consumer Goods      Covid-19      Energy & Petroleum      Food & Beverage      Industrial Components      Machinery & Equipment      Packaging      Plastics & Other Polymers      Services      Textiles & Nonwovens    

Food & Beverage Companies Are Still Growing, Even Off the Spike in Retail Sales in 2020

Food and beverage sales at retail are holding strong so far in 2021, even when compared to the 2020 stock-up trends that occurred in the early months of the COVID-19 pandemic. But what else is going on in 2021 for packaged and fresh food suppliers?

Below are a few trends to watch, affecting the food and beverage industry across most categories:

  • Food prices are rising in a significant way. Sometimes these rising prices are coming from increased sales of higher value versions (e.g., the rise of plant-based or organic versions) and sometimes they are due to rising costs of ingredients, packaging, and shipping being passed along. This is propelling gains above what would be expected when looking at volume sales or inflation adjusted value gains.
  • The foodservice market is coming back. As traditional restaurants reopen, expand operational capacity, or see more in-person diners, sales to this market are trending up. This will be especially important for foods aligned with quick service or fast food options (e.g., semi-prepared foods and frozen foods). Fresh food might still be slower as restaurants will be cautious about overbuying so as not to get burned by having too much fresh stock as in 2020.
  • Foodservice is not just restaurants. Schools and colleges are expected to reopen to more normal operations (in-person learning, on-campus dining/living) in the fall. Cafeterias at hospitals, offices, and other places are also reopening. Also, it’s worth noting that rising vaccinations will correlate with increased foot traffic at malls and their food courts, and more visits to recreation places like amusement parks, museums, and zoos, along with their corresponding food and snack stands.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, particularly in the Packaging area, as well as Food and Beverage industry analysis from our sister publisher Packaged Facts. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Covid-19      Food & Beverage      Packaging