Specialist
Former senior executive at Conagra Brands Inc
Agenda
- Key trends and developments in the CPG industry – impacts of the novel coronavirus pandemic
- Demand mix dynamics across sales channels – mass retail, grocery and online platforms
- Potential commodity price impact on heightened demand for long shelf life food
- Medium to long-term competitive positioning for CPG players – Conagra Brands (NYSE: CAG), Mondelēz International (NASDAQ: MDLZ), Kraft Heinz (NASDAQ: KHC) and Hormel Foods (NYSE: HRL)
Questions
1.
How do CPG players typically respond to a pandemic? Are there any previous events that we could draw parallels from that you could comment on?
2.
What did the business learn from having its plant shut for seven days? Any views on its foregone revenue or the impact on being able to supply the market? What was it costing it to be shut down for those seven days, where it had to be shut down because of the physical impact on the plant itself?
3.
Which players do you envisage have the best level of readiness, and are most prepared with a business continuity plan, or even just business insurance? Who do you think are the winners and losers?
4.
Are you able to call out categories that might be at risk, that are not being prioritised as much by CPG companies? What is most at risk for these players that have to decide to either shut plants down or not produce certain items or categories? You mentioned that with Conagra, some products might not be manufactured currently.
5.
Do you have any figures on demand upticks and downticks across some of these CPG players? What kind of figures might they have experienced at the onset of the pandemic and how have those figures stabilised? If they haven’t, when might we expect these figures to stabilise, and what might that stable figure be?
6.
IRI data pointed to US food retail and mass merchant sales rising to about 68% and 63% in the rolling weeks ending 15 March and 22, respectively. This was a significant surge from pick-up of around 13% the weekend of 8 March. What is your assessment of this data?
7.
How close might Walmart be to those surges in demand? You mentioned Walmart doesn’t contribute to the IRI data set.
8.
How would you force rank the major players’ product portfolio on the back of the coronavirus pandemic? How might a stronger frozen product portfolio fare vs a player with a stronger shelf-stable portfolio?
9.
How might an expected drop in Easter spending impact players such as Mondelēz which derive a large proportion of sales from confectionery goods?
10.
How would you rate player positioning and demand trends for the snacks category?
11.
Are there any underlying strengths or challenges that predated the coronavirus pandemic that you feel might have been magnified or brought to light for some of these players?
12.
Are you observing any changes or shifts from the retailers in their approach to shelf space for specific categories?
13.
What percentage of industry sales for 2020 do you think may have been pulled forward as customers stocked up on pantry items?
14.
Which channels do you think were the immediate beneficiaries of this demand surge? Would it be the mass retailers, the grocery stores or the online platforms?
15.
Are there particular foodservice players that are most exposed to that kind of pullback? Is the demand uptick with Conagra, which has foodservice, a significant offset to the potential declines in the foodservice industry?
16.
Do you have any views on price per unit rises?
17.
How might promotions play into this type of environment? Would retailers be keen to keep or pull back promotions, and what would that mean for producers such as Conagra?
18.
Are there any supply chain constraints that some of these CPG players might face in addressing the demand spikes? What about identifying the hotspots for outbreaks that may drive demand from a supply chain standpoint?
19.
Are there any specific players that you think could be either leading or lagging in being able to address some of these demand spikes? To what degree might they need to rely on third-party contract manufacturers? For which segments is this an issue and how does that high reliance on contract manufacturing translate into potential margin pressure?
20.
How might some of these demand spikes impact commodity pricing?
21.
Are there any key commodities that you could outline with examples of how we should think about the margin impact for each of them? What about for specific players?
22.
Can you comment on the commodity strategy of any players? Did any of the players draw from what was happening in China to address the potential repercussions of what this environment could do to those commodities?
23.
How might the coronavirus pandemic impact Conagra’s Pinnacle Foods integration? What do you perceive is the immediate risk to some of the announced synergies, either in sales or cost?
24.
Do you think the coronavirus pandemic could change longer-term CAPEX plans, and if so, how?
Gain access to Premium Content
Submit your details to access up to 5 Forum Transcripts or to request a complimentary 48 hour week trial
The information, material and content contained in this transcript (“Content”) is for information purposes only and does not constitute advice of any type or a trade recommendation and should not form the basis of any investment decision.This transcript has been edited by Third Bridge for ease of reading. Third Bridge Group Limited and its affiliates (together “Third Bridge”) make no representation and accept no liability for the Contentor for any errors, omissions or inaccuracies in respect of it. The views of the specialist expressed in the Content are those of the specialist and they are not endorsed by, nor do they represent the opinion of, Third Bridge. Third Bridge reserves all copyright, intellectual and other property rights in the Content. Any modification, reformatting, copying, displaying, distributing, transmitting, publishing, licensing, creating derivative works from, transferring or selling any Content is strictly prohibited
