In this news, we discuss the COVID-driven home dining boom boosts U.S. food giants again.
(Reuters) – Some of America’s largest packaged food companies raised their annual financial goals on Thursday, expecting the largely home-confined consumer to spend more on everything from cheese to coffee in stores. months to come, albeit at a more moderate pace.
Kraft Heinz, owner of the Philadelphia cream cheese and Heinz ketchup brands, raised baseline profit expectations, while Cornflakes maker Kellogg and Keurig Dr. Pepper raised both profit forecasts and sales, citing a sharp rise in home consumption.
The COVID-19 pandemic has drawn buyers to well-known brands and processed foods, fearing an extension of house arrest due to a resurgence in coronavirus cases.
This has helped transform the fortunes of the packaged food industry, which has long struggled for growth due to the perception that its products are unhealthy.
The shift to trusted brands amid lockdowns was one of the reasons Kellogg’s organic sales in emerging markets rose by a double-digit percentage in the third quarter, much higher than expected, told Reuters Managing Director Steve Cahillane.
“We are seeing strong domestic consumption and strong demand for our brands… We are poised to end a great year in 2020 and keep up with the strong momentum of 2021,” Kraft Heinz CEO Miguel Patricio told Reuters.
In another COVID-driven shift, people are moving further and further away from small, individual packaging. Kraft Heinz said it is seeing increased demand for 12-pack mac and cheese and larger bottles of ketchup.
Packs of everything bigger also mean fewer store visits, prompting retailers to run more promotions. The company warned that this could result in slightly weaker fourth-quarter sales than in previous months.
Overall, data provided to Guggenheim by Nielsen showed Kraft to be a winner in US retail sales for the past three months, with sales up 9.8%, far more than rivals. Kellogg or General Mills GIS.N.
Reporting by Siddharth Cavale and Praveen Paramasivam in Bangalore; Edited by Sriraj Kalluvila, Arun Koyyur and Saumyadeb Chakrabarty
Original © Thomson Reuters