It’s looking like a steady diet of good old fashioned Lucky Charms for breakfast and Progresso soup for lunch as Americans manage through life at home amidst the coronavirus pandemic.
“We have seen a significant uptake in our volume,” General Mills group president of North America retail Jon Nudi said on Yahoo Finance’s The First Trade. “In March, we saw stock-up behavior and it has settled in somewhere between a 20% and 30% increase across our entire business. We have seen some categories higher than that as well. We are working hard to make product and make sure we get it to the shelves as well.”
General Mills is among a large cohort of big consumable goods players experiencing a consumer resurgence right now. From Hormel’s Spam to Conagra’s Healthy Choice frozen food line, consumers bum-rushed the aisles at Walmart, Target and Kroger in March to stock up pantries and refrigerators out of fear the coronavirus would be a major issue for some time. The same could be said for the hoarding of cleaning supplies, as evidenced by a strong earnings report last Friday from Tide maker P&G.
“Consumers in the U.S. are doing more laundry loads per week and washing more garments after wearing them just once. More loads are being done with unit dose detergents. We’ve seen a spike in demand for Tide antibacterial spray. This care consumption has increased as families eat more meals at home and are more concerned about the hygiene of their dishes, glasses and silverware,” P&G CFO Jon Moeller told analysts on a conference call.
Moeller added, “More meals at home means more surface cleaning, often with a preference for a disposable cleaning solution versus a funky sponge, dingy cloth or suspect mop, leading to increased consumption of Bounty, Swiffer and Mr. Clean.”
Shares of consumer goods continue to act strong in a market getting anxious after several weeks of bear market gains. General Mills, Kellogg, Campbell’s Soup, Kraft Heinz, Hormel, Conagra, P&G and Clorox have seen their stocks gain by an average of 16% this past month, according to Yahoo Finance Premium data.
The market’s read is that the consumer goods sector has one more quarter on tap of strong profits thanks to the coronavirus. Beyond that it’s unclear if people will continue to eat home or return to eating at restaurants once they reopen — meaning a drop from the current pace in sales for the packaged food space. Going back to work at the office could equate to a slowing in sales growth for cleaning products as well.
Says General Mills’ Nudi, “Obviously, we have seen unprecedented shifts from away-from-home consumption to in home. Over time that will balance out. I do believe for the short-term we’re going to see more in-home consumption even as the country starts opening back up. So I think we will see increased demand.”