Throughout the pandemic, consumer packaged goods (CPG) companies benefitted from purchases of classic CPG items like canned vegetables, pasta, and coffee, as consumers stocked up during quarantine.
However, as the country opens back up, CPG companies won’t be able to rely on pandemic-related purchases for growth, and many could slip back into weaker pre-COVID-19 sales patterns.
CPG COMPANIES MISS ON EARNINGS
Campbell Soup said it expects full-year sales to fall between 2.5%-3.5%, as the COVID-19 vaccine rollout is likely to bring back customers to restaurants and reduce their reliance on ready-to-eat soups and snacks, reported Reuters (March 10). The company reported second-quarter net sales rose 5.4% to $2.28 billion, missing estimates of $2.30 billion.
Campbell had been winning back customers in recent quarters because of the pandemic. In June of last year, the company had its best quarterly performance in more than 30 years.
Meanwhile, Kellogg missed profit forecasts last month, reported MarketWatch (Feb. 11). Sales rose 7.5% to $3.46 billion but were short of the FactSet consensus of $3.51 billion.
AS THE COUNTRY OPENS UP, CONSUMERS DINE OUT MORE
With vaccinations ramping up across the U.S., restaurants and theaters are opening back up. Some state leaders are relaxing COVID-19 safety measures entirely while others are taking a slower approach. Either way, more people are eating out, leading to less demand for traditional CPG products.