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

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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

Forecast Previous
5/3/2021 Markit manufacturing PMI (Apr) 60.6 59.1
5/5/2021 ADP employment report (Apr) 750K 517K
5/5/2021 Markit services PMI (Apr) 63.1 60.4
5/6/2021 Continuing jobless claims (weekly) 3.66 mil
5/6/2021 Productivity (Q1) -2.1% -4.2%

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

See Also

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

Announce Date Company EPS Estimate Previous Quarter EPS
5/3/2021 MercadoLibre, Inc. (MELI)  $                0.04  $               (1.02)
5/4/2021 Bunge Limited (BG)  $                1.54  $                3.05
5/4/2021 Sysco Corporation (SYY)  $                0.20  $                0.17
5/4/2021 Lancaster Colony Corporation (LANC)  $                1.24  $                1.62
5/4/2021 Darling Ingredients Inc. (DAR)  $                0.62  $                0.45
5/4/2021 Ingredion Incorporated (INGR)  $                1.62  $                1.75
5/5/2021 Monster Beverage Corporation (MNST)  $                0.61  $                0.62
5/5/2021 Performance Food Group Company (PFGC)  $                0.28  $                0.13
5/6/2021 Beyond Meat, Inc. (BYND)  $               (0.19)  $               (0.34)
5/6/2021 Kellogg Company (K)  $                0.96  $                0.86
5/6/2021 Sprouts Farmers Market, Inc. (SFM)  $                0.60  $                0.59
5/6/2021 Post Holdings, Inc. (POST)  $                0.55  $                0.72
5/6/2021 Shake Shack Inc. (SHAK)  $               (0.08)  $               (0.03)
5/6/2021 Papa John’s International, Inc. (PZZA)  $                0.55  $                0.28
5/7/2021 DraftKings Inc. (DKNG)  $               (0.41)  $               (0.68)

Source: Bloomberg, CNBC, Yahoo Finance, Food Institute

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