Bank of America’s team of food and beverage analysts are eager to peer into your grill, your fridge, and your cooler to see how consumer habits amid the coronavirus pandemic may be affecting the massive food and beverage stocks the analysts cover.
The group is launching the BofA summer BBQ tracker and plans to update its survey with new information for Father’s Day, July Fourth, and Labor Day.
The group’s research on Memorial Day found that only 40% of respondents plan to grill this weekend, versus 56% in a typical year. And 70% of gatherings will include fewer than 10 people. That translates to “roughly 25% to 30% indicating lower food/beverage purchases for their events,” the analysts wrote. Their information was gathered from May 14 to May 16 and included 1,000 respondents.
The analysts highlighted two particular consumption concerns: proteins and condiments. “We highlight potential slowing in data for neutral-rated TSN (Tyson Foods) and underperform-rated HRL (Hormel) and MKC (McCormick & Co.), which have otherwise displayed strong growth. While buy-rated CAG (Conagra) and KHC (Kraft Heinz) also have exposure (hot dogs/condiments), we expect the more diversified product portfolios to offset any grilling-related weakness,” they wrote.
As for beverages? Given fewer gatherings and smaller invite lists, the analysts expect “tough comparisons” for both soft drink and alcoholic beverage companies, including PepsiCo, Coca-Cola, Keurig Dr Pepper, Constellation Brands, and Molson Coors.
One relative area of strength? Home improvement chains have experienced a bump as the analysts reported 20% of respondents had bought a new grill within the past two months.
The analysts also noted that Memorial Day weekend marks the start of “hot dog–eating season” with 818 hot dogs consumed every second from Memorial Day to Labor Day.
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