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.

Strong Year for Packaged Food Sales…and Making the Most of a Marketing Moment

Recently, in a cheeky statement, Goya Foods’ CEO claimed that the company had named New York Representative Alexandria Ocasio-Cortez as honorary “Employee of the Month” for the publicity the company got for its Goya branded food products after a dustup over political statements made by the CEO in July. The CEO – perhaps adhering to the adage that there is no such thing as bad publicity – credited Rep. Ocasio-Cortez with its strong sales in 2020. However, Goya Foods, and other suppliers of packaged food products at grocery stores, benefited from a number of other factors, such as:

  • an overall increase in sales of canned goods as US consumers sought to fill pantries during the COVID-19 pandemic
  • demand for convenience foods – including canned beans, frozen ingredients and ready-to-eat foods, and pre-made sauces, spices, and marinades – that make home cooking easier
  • rising interest in flexitarian diets that incorporate plant-forward protein sources, including legumes
  • the increasing number of people in the US of Hispanic/Latinx origin
  • interest among home-bound consumers in trying new foods and recipes, particularly those that suit current tastes for foods with spice and heat
  • rising interest in baking, spurring sales of confectionary products
  • heightened interest in snacking as home-bound workers looked to create alternatives to the coffee break, boosting sales among those products

Indeed, Goya ­– having expanded its Brookshire, Texas, production facility in 2017 ­– made news in October of this year when it was revealed that it planned an additional capacity expansion at the site that would allow it to nearly double production.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, including Global Food Processing Machinery; Global Packaging Machinery; and Meat, Poultry & Seafood Packaging; Pouches; Molded Pulp Packaging; and Frozen Food Packaging (coming soon). Related food industry research from our sister publisher Packaged Facts includes Global Meat & Poultry Trends;  Meat, Poultry, & Seafood Alternatives: Plant-Based & Cultured Cell-Based Types; US Food Market Outlook 2020: Home Cooking, Grocery Shopping, & Food Trends in the Age of Coronavirus; and 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.

  Covid-19      Food & Beverage      Packaging    

Tired Cooks, Unskilled Cooks, & Kids Boosting Sales of Processed & Convenience Foods

Recently, the New Yorker published an article talking about how even the most enthusiastic cooks are finding meal preparation becoming a joyless pursuit these days. Cooking has become less something they choose to do and more something they have to do…Three. Times. Per. Day.

Meanwhile, leading meat processor Tyson’s CEO Dean Banks noted that retail demand for its prepared items surged during its most recent quarter and said, “Consumers are really getting tired of cooking at home.”

However, processed and prepared foods are up not just because people are tired of cooking, although many are. Additionally:

  • More people who would have otherwise have grabbed drive through or eaten out are now cooking and eating at home, where they are looking for similarly convenient options.
  • People who do not consider themselves useful cooks and do not want to become cooks are still being forced to eat largely at home by circumstances of work (at home or out of work) or by lack of availability of restaurants.
  • Parents are looking for easy things that older children who are doing remote learning can cook so they can help themselves to a easy meal or snack.  

There are opportunities in addressing these customers as well as joyless chefs. Most consumers are looking for easy, quick, comforting, healthy meal and snack options, whether as a regular thing or just to take the pressure off on days they just don’t feel like cooking anymore.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, including Global Food Processing Machinery; Global Packaging Machinery; and Meat, Poultry & Seafood Packaging; Pouches; Molded Pulp Packaging; and Frozen Food Packaging (coming soon). Related food industry research from our sister publisher Packaged Facts includes Global Meat & Poultry Trends;  Meat, Poultry, & Seafood Alternatives: Plant-Based & Cultured Cell-Based Types; US Food Market Outlook 2020: Home Cooking, Grocery Shopping, & Food Trends in the Age of Coronavirus; and 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.

  Covid-19      Food & Beverage      Packaging    

Touchless Condiment Dispensers: Meeting the Need for Greater Hygiene & Reduced Single-Use Packaging

Single-use foodservice packaging has become the target of increased environmental scrutiny in the US, Europe, and many Asian countries. However, much of that scrutiny and the initiatives resulting from it – such as reduced usage of disposable coffee cups and bans on expanded polystyrene (EPS) containers and certain plastic bags – have been put on ice by COVID-19. The pandemic reversed these recent developments by causing renewed demand for single-use cups and other disposable tableware as restaurants shifted away from in-house dining to increased pickup and delivery business.

While the pandemic has created something of a respite for many affected products, one food producer has gone in a somewhat different direction. Kraft Heinz has debuted the Heinz Keystone Automatic Dispenser, which uses “no touch” technology to dish out half-ounce portions of ketchup, mustard, mayo, ranch, BBQ sauce, and other sauces and condiments.

No-touch dispensers are reassuring to customers concerned with surfaces touched by other people (think of bathroom soap or paper towel dispensers). They also reduce packaging requirements associated with packets and other single-serve formats, and reduce (but don’t eliminate) the labor costs of constant vigilance on the part of restaurant workers in light of stricter hygiene regimens brought on by the pandemic.

For more information and discussion of market opportunities, see Packaged Facts’ food- and beverage-related reports, including Food Carryout & Delivery and 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 and restaurant industry analysis, including  US Restaurant Reopening: COVID-19 Impact on Supplies and Global Foodservice, as well as packaging industry titles such as Pouches, Foodservice Single-Use Products, Global Foodservice Single-Use Products, and Global Single-Use Packaging Regulations.

  Covid-19      Food & Beverage      Packaging    

October Retail Sales Report: Categories Slow as COVID-19 Cases Rise & Economic Relief Remains Elusive

The October advance monthly retail sales report was released on November 17. One thing worth noting – for the uninitiated – is that this information is linked to sales by type of retail outlet, but that doesn’t fully align with sales of product categories in some cases. For instance, sales of sporting and recreation goods might be lower than one would expect because the data only count sales at stores that primarily sell these products and do not include items in this category that are sold at mass merchants like Walmart and Target, whose sales are classified elsewhere.

The October report shows some growth over September sales, but declines in the same period in more categories. The growth that happened was muted and generally below expectations. Sales were hampered by rising COVID-19 cases in much of the country as well as economic uncertainty as hoped-for government stimulus and financial support programs did not come to fruition.

The big winners overall for the year continue to be the same ones from last few months. However, even as they continue to show strength against same-month 2019 sales, they are increasingly off pandemic highs:

  • grocery/food retail stores – October 2020 dipped 0.2% from September 2020, but October 2020 was still up 10.3% from October 2019. This is a trend grocers and other food experts expect to continue as consumers continue to eat and cook at home more than pre-pandemic.
  • building materials/garden equipment dealers – October 2020 was only up 0.9% from September 2020 but still up 19.5% from October 2019. Although experts expect the DIY trend to hold, these elevated sales may falter as the seasons change and weather cools in much of the country; still, October sales were supported by things such as seasonal décor and outdoor heaters, something expected to continue through the rest of 2020.
  • retailers that operate outside of brick-and-mortar locations (including e-commerce not linked to conventional stores) – October 2020 was up 3.1% from September 2020, but October 2020 was still up 29.1% from September 2019. The convenience of e-commerce will make this trend sticky beyond the pandemic.

For the most part, the retailers mentioned above remained open during stay-at-home orders because they were considered “essential” businesses. Additionally, their product mix includes categories that continue to benefit from the shift toward staying home – e.g., home cooking over eating out and DIY home and garden improvements. Many consumers are still largely limiting their shopping to these types of retail outlets.   

Sales at sporting goods, hobby, musical instrument, and book stores – which saw rapid gains in June 2020 – experienced declines from that spike during July and August before improving in September and falling again in October. While back-to-school shopping and fall sports spending supported sales in September, October sales were more likely to be early holiday shopping. October 2020 sales were up 12.4% from October 2019.

A few other highlights:

  • furniture stores – October 2020 saw small dips, falling 0.4% compared to September 2020. This category is still in positive territory year-over-year as October 2020 sales were 5.2% greater than in October 2019. Creature comforts and furniture to support at-home work and learning continues to drive sales.
  • gas stations – October 2020 was up 0.4% from September 2020 but still down 14% from October 2019. People continue to leave home less often, and a reduced level of commuting and road-tripping is keeping sales at gas stations low.
  • clothing stores – October 2020 was down 4.2% from September 2020, which had been an improved month in an overall bad year for clothing sales. October is typically a month that signals fresh buying of cool weather clothes as the seasons change, but sales in 2020 were down 12.6% from October 2019. Bankruptcies are continuing in this market, although some are making it through and reopening after restructuring. Online sales and curbside pickups help sales at these stores.
  • Food services with drinking places dipped again in October, falling 0.9% from September 2020. Cooler weather is moving diners away from outdoor dining options that supported such sales in warmer weather. October 2020 sales are still seriously lagging 2019 same-month sales (-14.2%).

Economists and other interested parties – including Freedonia analysts – will be closely monitoring next month’s retail sales report to see how the holiday shopping season kicks off with Black Friday specials starting early and running through much of the month. There remains some hope on the horizon for the retail sector as sharply curtailed sales on services (limited travel, dining out, away from home entertainment, personal care services) leave most households with more money to spend on goods at retail, particularly as the holiday season approaches. Still, spikes in COVID-19 cases will hurt any retail that is not done via e-commerce as consumers again stay away from public places and as some areas limit or close dine-in options again.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, including an expanding catalog of COVID-19 Economic Impact reports, which highlight how various industries are responding to the COVID-19 with a comparison to historical recessions. Food- and beverage-related reports are also available from our sister publisher, Packaged Facts. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Construction & Building Products      Consumer Goods      Covid-19      Food & Beverage      Packaging      Textiles & Nonwovens    

Automation Spurred by the COVID-19 Pandemic: Meat Processing & Beyond

Meat processing is an industry that has long considered automation inferior to human activity. Automation was seen as inexact and left too much waste, among other issues.

However, there has been more of a push to improve machinery through the use of technologies – such as artificial intelligence, sensors, and cameras – that are both increasingly better performing and less expensive. The need to implement automation has been spurred by the challenges of worker protection (particularly the need to space workers out amid high infection rates) and the need to continue operating when outbreaks occur.

This is something to watch for in other industries as well. Investments in automation are often seen as a hedge to hiring challenges (when not enough of the right kind of workers available), but it can also be a way to make the cost of production in a country or region with high labor rates more competitive with other areas. As more manufacturers are considering diversifying their supply chains after learning lessons from disruptions during the pandemic, automation may be an increasingly popular strategy.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, including Global Food Processing Machinery, Global Packaging Machinery,Meat, Poultry & Seafood Packagingand Global Sensors & Connectors (coming soon) as well as related food industry research from our sister publisher Packaged Facts such as Global Meat & Poultry Trends, and Meat, Poultry, & Seafood Alternatives: Plant-Based & Cultured Cell-Based Types. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Covid-19      Food & Beverage      Machinery & Equipment