News Press Releases

Food Data Is Troubling; Companies Explain Why

KHC, CPB | March 8, 2017

U.S. Nielsen Data for packaged foods revealed a 5.5 percent decline in February sales, representing the second consecutive month of lackluster volumes. The results follow a 1.9 percent decline reported last quarter. Bernstein’s Alexia Howard mentioned the top expectations among packaged food companies.

Key Takeaways

While saying that companies did not have firm answers for why sales were down, Howard mentioned key takeaways:

The delay in processing of tax returns by some people had resulted in lower purchases of bulk items. “[W]e doubt this is the reason as people on certain supplemental income payments won’t be buying branded foods anyway,” the analyst pointed out.
Advertising was less effective, with people spending more time watching CNN and Fox, rather than the food network or other typical sites.
Concerns surrounding the political climate had resulted in people being more cautious in their purchases. Howard commented that this would be “a positive for food at home” with people spending less on eating out, so “we're having a hard time buying that too.”
A year-over-year decline in promotional spending “which could lead retailers to fill in the gaps by promoting their own private label products (although again, this seems unlikely with retailers asking for more promotional spending),” the analyst added.