A year into the worst health crisis in modern history, French Champagne, chocolate novelties and tequila have all shot up consumers’ grocery lists. Current trends bode well for liquor stocks, less so for some of the early winners of the pandemic.
This time last year, shoppers were panic buying after the World Health Organization declared a global pandemic on March 11. Supermarket shelves were stripped of essentials such as toilet paper, dried pasta, hand sanitizer and canned soup. Staples companies such as Lysol-maker Reckitt and paper-products giant Kimberly-Clark initially struggled to meet demand.
Today, Americans and Europeans are buying less at the grocery store overall. Data from Nielsen show that sales of fast-moving consumer products over the four weeks through March 21—the latest figures available—were down 10% in Europe’s five biggest markets compared with the same period of 2020. In the U.S., where so-called pantry loading was more intense, sales were down 16%.
The contents of shopping trolleys have also changed. The fastest-growing consumer products in Europe over the four weeks through March 21 were chocolate novelties—perhaps partly due to the earlier Easter holiday—Champagne, tequila, premixed alcohol and ready-to-drink coffee. In the U.S., sales of Champagne and prepared cocktails were up 78% and 69% respectively.
It has been tough for more mundane categories to maintain the blistering growth they saw in the early days of the pandemic. Sales of goods such as dried pasta and hand sanitizer must now be compared against last year’s unprecedented sharp increase. For the four weeks in question, sales of toilet roll dropped 54% year over year in the U.S., while hand-sanitizer sales fell 27%. Bleach and soap sales are also off in Europe. Although demand for hygiene products is higher than before the pandemic, cleaning brands belonging to the likes of Reckitt and Domestos-owner Unilever will start to look like underperformers.