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.

Pandemic-Driven Snacking Expected to Continue Throughout 2021

February 26, 2021 - Ever since the beginning of the COVID-19 pandemic, many US consumers have heeded the calls of government and health leaders and minimized their trips outside of the home. However, people still need a break from the routine of staying inside. A pair of articles show that, for a number of people, a momentary respite has been that of snacking.

The first article – a recap of PepsiCo company’s latest quarterly earnings report – reported that sales of snacks have increased during the pandemic as consumers increasingly purchase bags and boxes of chips, crackers, and other items to break up the monotony of home life. The company expects this trend to continue through 2021 as people will continue to work, school, and shop at home, with the mid-day trip to the coffee shop replaced by a much shorter journey to the cupboard in the pantry.

The second article discusses the sale of Kraft Heinz’s nuts businesses – such as the famed Planters line of peanuts – to Hormel Foods. The transaction will allow Kraft Heinz to concentrate on its core food offerings, including snack foods as Jell-O, Lunchables, and Bagel Bites. For Hormel Foods, the purchase of the Planters line allows it to enter the snack foods market, which can serve as a complement to its meat products – the basis of many lunches and dinners. Nuts are also considered better-for-you snacks and play into consumer interest in both higher protein snack options and plant-based snack options.

According to The Freedonia Group National Online Consumer Survey (conducted November-December 2020), 51% of respondents noted that they were eating more snacks and treats because of the coronavirus pandemic. That share is somewhat higher – 54% – among those who are set up to do their usual paid work from home. While 45% noted that they were eating more healthy foods because of the pandemic (an interest in boosting immunity and general health), 25% indicated they were eating in a less healthy way and 59% were eating more comfort foods because of the pandemic. Many consumers are straddling that line between foods that improve well-being and foods that are familiar and comforting. These trends present opportunities for food companies to create offerings that play at least somewhat in both areas.

For more information about trends and opportunities, see The Freedonia Group’s coverage of the packaging industry as well as food and beverage research from sister publisher Packaged Facts. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Covid-19      Food & Beverage    

Can-demic: Aluminum Cans Are Still in Short Supply

A trend we first noted last summer on this page (“A Shortage in Cans for Food & Beverages: Why? Will It Last? What Are the Alternatives?” August 26, 2020) is still a problem 6 months later. A number of factors have contributed to a recent and continuing squeeze on the supply of aluminum cans. Those related to the COVID-19 pandemic include:

  • a shift to at-home consumption of beverages –  this trend favors aluminum cans, as they are a format for single servings and beverages in canned forms are easy to stack in pantries when attempting to create a stock to limit shopping trips
  • restaurant uncertainty – restaurants have faced a number of changes to capacity and operations over the past year, and many switched to offering canned beverages because they are easier to save, such as during periods of closure and reduced occupancies

However, the reasons behind this trend are not all due to the COVID-19 pandemic. Other factors impacting shortages are:

  • Performance advantages – cans have better light and gas barrier properties, which makes them an ideal container for beer, seltzers, and other carbonated beverages.
  • A change in aesthetics preferences – beverage suppliers have long preferred glass bottles as a packaging option due to the perception that they are a higher-end option, but that is changing, particularly as consumers look for a format that is easier to take to parks and festivals, where glass is commonly banned
  • Sustainability – cans are mostly made out of old cans, and aluminum has a good reputation for recyclability – although the specifics can be a little more complicated than catchy sustainability slogans often lead one to believe.
  • The explosive growth in the popularity of hard seltzers – nonalcoholic seltzers are really cutting into the market share of traditional colas and fruit-flavored sodas, and these seltzers are almost always packaged in cans. Since those beverages are increasingly being consumed instead of beer or other beverages that often use other packaging formats, that’s putting additional pressure on aluminum supplies.

Solutions?

  • Can suppliers are ramping up production.
  • Some beverage companies are looking outside the US and beyond the typical supply chain for additional can supply options.
  • Some beverage suppliers are wrapping unused cans in the label of products they still need to ship.
  • Beverage suppliers are limiting production of some of the niche brands to have plenty of supply available for their flagship products.
  • Some beverage suppliers are witching to alternative packaging – for beverages that might mean plastic or glass bottles.

For more information about trends and opportunities, see The Freedonia Group’s coverage of the packaging industry as well as food and beverage research from sister publisher Packaged Facts. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Consumer Goods      Covid-19      Food & Beverage      Metals      Packaging    

Heightened Demand for Distilled Spirits Spurs Expansion of Barrel Stave Manufacturer

The announcement by a producer of barrel staves that it will expand its manufacturing facility demonstrates yet another way in which the COVID-19 pandemic has affected the US: in how we consume potent potables.

While alcohol sales at bars, restaurants, and other entertainment venues has dropped precipitously as the concept of a “night out” has become a distant memory for many at this time, retail sales of alcohol – such as at grocery, convenience, and liquor stores – has risen as US consumers have taken to imbibing at home. Furthermore, Americans are drinking more distilled spirits – bourbon and whiskey, gin, tequila – as well as the traditional beer and wine. Additionally, many consumers are opting for quality instead of quantity, opting for craft beers, fine wines, and premium distilled spirits.

While the reasons for this increase in consumption in distilled spirits are many – from stress relief to adventuresome home bartenders trying their hand at making classic cocktails – this increase in sales means that distillers will need more barrels to age their products prior to sale. And as federal regulations prohibit the re-use of barrels for Kentucky bourbon and other iconic whiskies, distillers must purchase new barrels every year. Hence, the need for more barrel staves.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, including the Freedonia Focus coverage of Distilled Spirits: United States and our sister publisher Packaged Facts’ report on US Beverage Market Outlook 2020: Grocery Shopping & Personal Consumption in the Coronavirus Era. Freedonia Custom Research is also available for questions requiring tailored market intelligence

  Consumer Goods      Covid-19      Food & Beverage    

Future of Food Delivery: Costco Finally Dips Into Curbside Click-and-Collect With Tests in New Mexico

With growing concerns about community spread where infection rates are particularly high coupled with the rise of COVID-19 variants that are more easily spread, more people are asking if even weekly grocery shopping trips are too risky. As a result, even holdouts are putting options back on the table to make customers comfortable and limit in-store traffic.

For instance, Costco – which has long resisted curbside pickup services, suggesting they don’t need it and that their stores aren’t set up for it – is dipping their toes in the water. The company has launched a pilot program offering curbside pickup at three stores in New Mexico. Orders can be placed through Instacart and Costco employees will handle fulfillment. At this point, product pricing is the same as in the store, but order must be at least $100 and customers are charged $10 per order for the convenience.

Most stores have had success with curbside delivery or click-and-collect shopping, even if they have struggled at times with logistics and having enough capacity to meet consumer demand. This market of potential customers is substantial. According to The Freedonia Group’s National Online Consumer Survey (conducted November – December 2020), 35% of respondents noted they had used grocery store curbside pickup for the first time because of the coronavirus pandemic.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, including Retail Bags, Protective Packaging, Commercial Refrigeration Equipment, and Global E-Commerce Packaging. Related reports from our sister publisher, Packaged Facts, include US Food Market Outlook 2020: Home Cooking, Grocery Shopping & Food Trends in the Age of Coronavirus, Global Food E-Commerce, and Online Grocery in the US. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Consumer Goods      Covid-19      Food & Beverage      Services    

Future of Food Delivery: Foodservice & Grocers Using Smart Refrigerators

The coronavirus pandemic continues to change the way we get our food. More consumers want easy contactless grocery shopping. Many also desire customizable on-demand fresh offerings featuring high-quality ingredients, but with a contactless payment and pickup experience. In The Freedonia Group National Online Consumer Survey (conducted November – December 2020), 54% of respondents indicated that they were more concerned about food safety and germs transmitted during food delivery because of the coronavirus pandemic.

The next generation of food business plans are using smart refrigerated equipment to not only meet consumers where they are but to also fulfill their demands for a seamless, convenient, and contactless transaction:

  • Sally the Salad Robot from Chowbotics has been seeing increasing installations, first designed as a vending machine replacement in healthcare settings, but now replacing salad bars in grocery store chains (e.g., Heinen’s and Piggly Wiggly).
  • Smart, temperature controlled pickup kiosks are rolling out in a few grocery stores for click-and-collect operations, designed to ease collection and staging operations as well as to potentially place pickup locations away from grocery stores themselves.
  • Being able to offer meals off-premises and close to customers is the driving force behind start-up Alvo as it places smart refrigerators stocked with prepared meals in apartment buildings. After initially installing the refrigerators in office buildings, the firm shifted during the pandemic to residential placements to meet customers where they are.
  • In contrast with Alvo, Farmer’s Fridge has concentrated on offering its smart fridges stocked with salads, oat bowls, and other healthier food options in offices, airports, and hospitals. More recently, the company announced it would debut as a pilot project in select Dunkin’ restaurants in Chicago and New Jersey.

Expect to see continued development as grocers and foodservice vendors seek to make click-and-collect more efficient, to reduce worker time and make the experience more frictionless. Commercial refrigeration and vending machine companies will continue to innovate to fit that market need.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, including Global Foodservice, Foodservice Single-Use Products, Global Foodservice Single-Use Products, Retail Bags, Protective Packaging, Commercial Refrigeration Equipment, and Global E-Commerce Packaging. Related reports from our sister publisher, Packaged Facts, include Food Carryout & Delivery, Food Carryout & Delivery: Special COVID-19 Consumer Insights, Consumer & Corporate Food Gifting in the US, US Food Market Outlook 2020: Home Cooking, Grocery Shopping & Food Trends in the Age of Coronavirus, Global Food E-Commerce, and Online Grocery in the US. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Covid-19      Food & Beverage      Machinery & Equipment      Services