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Americas Consumer Staples: NielsenIQ First take: Latest data indicates price growth stabilization

Source: Goldman Sachs

Americas Consumer Staples: NielsenIQ First take: Latest data indicates price growth stabilization

November 15, 2022

At a high level, latest Nielsen data indicates largely sustained CPG growth momentum (+8% over the latest quad-week), with elevated growth across Dairy, Bakery, Pet Care, Grocery, and Frozen offset by continued weakness in General Merchandise. Food growth continues to outpace HPC, with pricing in Food stabilized in 17-18% range, which coupled with signs of moderating COGS inflation should pave a path towards gross margin expansion ahead, especially as promotion levels remain subdued and private label share gains remain relatively benign. Coupled with sequentially higher volume declines, this drove sequential growth moderation for Food in aggregate and most large-cap companies including GIS, SJM, and CAG, which saw accelerated volume declines and bears watching, in our view. On the other hand, POST and MDLZ were notable stand-outs with sequential growth acceleration driven by improving volumes. In addition, BRBR saw significant sequential acceleration, partly aided by easier comps, while SMPL moderated (on modest Atkins declines). Within HPC, volume declines remain comparable to Food, despite meaningfully lower pricing (+8%), indicating substantially higher elasticity levels. Notably, PG saw growth accelerate and outpaced the industry at-large in the latest quad-week, while CLX and CHD were notable stand-outs with the highest volume declines (double-digits).

In Beverages, 3-yr stack $ sales growth was positive across all categories, and accelerated on a sequential basis across alcoholic beverage categories - including beer, wine, spirits & FMB. Trends across non-alc beverages were broadly mixed, as sales growth accelerated sequentially in sports drinks, bottled water & sparkling unflavored water, while CSDs & still/sparkling flavored water decelerated, and energy drinks & RTD coffee were broadly stable. By company, $ sales growth across beverage companies was positive and accelerated sequentially for nearly all companies on a 3-yr stack basis, led by MNST, STZ, PEP, KDP & KO. The only exception was BF, which decelerated. In tobacco, $ sales growth for the overall cig category was negative and but the declines were broadly stable sequentially on a 3-year stack basis. By company, total $ sales growth for IMB and BAT was positive, but decelerated, while $ growth for MO was negative y/y and deteriorated sequentially.


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