Food Industry Financials: American Families Plan, MCD, ADM, KHC, and more

Here are trending economic and food industry data points, as well as major economic and company earnings releases for the coming week: American Families Plan, restaurant reservations, McDonald’s (MCD), Archers-Daniel-Midland Company (ADM), Kraft Heinz Company (KHC) and more

Trending Economic News

President Biden unveiled the $1.8 trillion American Families Plan. The proposal combines $1 trillion in spending with $800 billion in tax cuts and credits for middle- and lower-income families. Biden proposed paying for the plan by reversing the 2017 tax cuts for the top 1% and raising capital gains tax for income greater than $1mil. Here’s what is in the American Families Plan:

Childcare:

• Having low- and middle-income families pay <= 7% of their income on childcare (<age 5)
• Increasing childcare workforce wages to $15/hour

College tuition:

• $109 billion plan to make two-year community colleges free
• Increasing maximum Pell Grant award by approximately $1,400

Paid family and medical leave:

• Up to 12 weeks of guaranteed paid parental, family, and personal illness/safe leave
• Workers would receive up to $4,000 a month through the national leave program. The program will cost ~$225 billion over 10 years.

Universal preschool:

• Investing $200 billion in preschools through a national partnership with each state

Teachers and educators:

• $2.8 billion for yearlong paid teacher residency programs, $900 million for special education teacher development, and $400 million for teacher preparation programs at historically Black colleges, tribal colleges, and other minority-focused institutions
• $1.6 billion to help current teachers earn specialty credentials, such as special ed and bilingual ed. An additional $2 billion for educator leadership programs, like mentorships for new teachers and teachers of color

Nutrition assistance for children:

• $25 billion to make the summer Pandemic-EBT permanent for 29 million children receiving free meals
• Expanding the program to include an additional 9.3 million kids

Upcoming Economic Release

Source: Bloomberg, CNBC, Trading Economics, Food Institute

>> For more information on CPI/PPI and Retail Sales, go to Food Institute Economic Benchmarking.

Select Food & Beverage Industry Data Points

Restaurant Industry

OpenTable restaurant diner growth data (2019 baseline): U.S. = -21.84% as of Apr 28, 2021

McDonald’s (MCD) reported Q1 2021 results

• Consolidated Revenues: $5.1 billion (+9% vs. last year)
• Global Comparable Sales: +7.5%
• Business Segment Performance (Comp Sales):
  1. U.S.: +13.6%
  2. International: +0.6%
  3. Dev. Licensed Markets & Corp: +6.4%
• Operating Income: $2.28 billion (+35% vs. last year)
• Net Income: $1.5 billion (+39% vs. last year)

Key Takeaways:

• Q1 2021 revenues surpassed Q1 2019 levels (i.e., pre-pandemic)
• Guest counts remained negative for all segments, but average check size grew
• Marketing efforts continue to be a primary strategy for growth, with the introduction of the BTS Meal on April 19, following on the heels of the Travis Scott Meal and J Balvin Meal

Agriculture Food Processing Industry

Archers-Daniel-Midland Company (ADM) reported Q1 2021 results

• Total Revenues: $18.9 billion (+26% vs. last year)
• Operating Income: $1.1 billion (+84% vs. last year)
• Business Segment Performance:
  1. Ag Services and Oilseeds: $777 million (+84%)
  2. Carbohydrate Solutions: $259 million (+281%)
  3. Nutrition: $154 million (+8%)
  4. Other: $9 million (-18%)

Key Takeaways:

• Strong demand geographically and domestically as countries recover from the COVID-19 pandemic
• Key areas of growth trends highlighted:
  1. Higher corn, soybean, and wheat exports (i.e., tight supply / demand) and economies recover signaling higher profits
  2. Global foodservice recovery
  3. Plant-based protein expected to rise +12% this year
  4. Health & nutrition continue to be a major focus area for the company
  5. Transition from non-renewable to renewable sources of biofuel

CPG Industry

Kraft Heinz Company (KHC) reported Q1 2021 results

• Net Sales: $6.4 billion (+3.9% vs. last year)
• Operating Income: $1.1 billion (+41.3% vs. last year)
• Geographic Segment Performance:
  1. United States: $4.6 billion (+2.5%)
  2. International: $1.4 billion (+7.2%)
  3. Canada: $392 million (+8.8%)

Key Takeaways:

• KHC continues to rationalize its product portfolio to focus on customer needs vs. product categories
• Planters divestiture is part of the portfolio reorganization
• Management is prioritizing 4 higher growth segments (targeting health and wellness, convenience, and taste enhancements):
  1. Taste Elevation
  2. Easy Meals Made Better
  3. Real Food Snacking
  4. Fast Fresh Meals

Earnings Calendar of Select Companies

Source: Bloomberg, CNBC, Yahoo Finance, Food Institute