In this post, we explore interesting pantry loading trends using document theme extraction on earnings transcripts, now dynamically generated in AlphaSense.
Stockpiling essentials during quarantine comes as no surprise, but consumers haven't only been gathering canned food and toilet paper. Recent earnings calls hint that during COVID, consumers are hoping not merely to survive but to thrive under quarantine with comfort food and cannabis at their disposal.
We applied AlphaSense’s theme extraction capability to transcripts to get the buzz on what consumers are eating, drinking and smoking at home during COVID. While overall sentiment trends downward across the industry, theme extraction illuminates the product lines that are performing well.
Mondolez International: Biscuits and chocolate consumption up, but gum suffers
Mondolez International’s latest transcript reveals that Consumption is an emerging theme, including ‘home consumption’ and ‘at-home consumption’ with 38 total mentions of the topic (an increase of 35 mentions since the previous quarter).
As the CEO Dirk van de Put puts it, “If you go back to past crises, particularly biscuits, but also chocolate tend to do quite well.”
Gum sales were down, perhaps due to decreased concerns about fresh breath thanks to the physical barriers of social distancing and mandatory face masks.
The Kellogg Company: everyone’s eating cereal and salty snacks
Consumption was also a big theme for Kelloggs, with 30 mentions altogether, 17 of which were positive. Packaged foods were in high demand starting in March, specifically for crackers, which jumped 40% year-over-year. In North America, US consumption of cereal was up 43% year over year. This trend was consistent across household demographics including income and whether children were in the house, showing cereal’s ability to transcend socioeconomic status.
In the words of CEO Steve Cahillane, “Cereal is one of the food categories whose consumption has remained at very elevated levels even after the couple of weeks of consumer stock-ups. “
Altria & Vector Group; ‘significant pantry loading’ and rapid rise in discount cigarette sales
For cigarette giant Altria, a top theme was Growth and it skewed largely positive in sentiment.
Despite the threat of a coronavirus, which attacks the respiratory system, the company saw a rapid rise in discount cigarettes, attributed to smokers over 50 years of age. The company attributed the sudden increase in this demographic to smokers who had turned away from e-cigarettes due to bad press.
Meanwhile cigarette company The Vector Group saw a new theme of Pantry Loading emerge as the pandemic hit in early March.
Aurora Cannabis Company: consumer cannabis revenue skyrockets
Cigarettes aren’t the only thing people are smoking in this pandemic. Aurora Cannabis Company has seen consumer cannabis net revenue at $41.5M, up 24% from the previous quarter. The theme of Home Delivery also emerged as a new topic since the previous quarter, with cannabis delivery being considered an essential service in Canada.
Scott’s Miracle-Gro Company: Victory gardens and stockpiling weed
The landscaping and gardening company reported record sales in May, with a top emerging theme this quarter of Gardening as more consumers spend time at home and due to increased interest in edible gardening.
Interestingly, while Miracle-Gro is not directly involved in the legal cannabis industry, Cannabis is an unexpected theme that emerges, mostly in a positive light. These snippets offer some insight into the thriving cannabis market:
Strum Ruger & Co - ‘Increased Demand of firearms’
During a pandemic, the very order of society is threatened. The prospect of lawlessness drives some to stockpile weapons and ammunition. In Strum & Ruger’s latest transcript we see the theme of Production in a largely negative context:. “We were unable to ramp up production quickly enough to meet the increased demand.”
Vista Outdoors transcript speaks to a ‘robust demand environment’ for guns and ammunition. ‘Ammunition’ emerges as a top theme,with 38 mentions this quarter, largely in a positive light. The call points to an increased interest in personal security.
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