The Stocks of Pantry Loading
Now that the novel coronavirus (COVID-19) has reached pandemic status worldwide, consumers continue to actively stockpile supplies, thinking beyond emergency items such as canned goods, flour, sugar, and bottled water. Sales of shelf-stable CPG items have been on the rise amid pandemic concerns, as have a handful of other items you maybe didn’t consider this month. Below are a few stocks to consider during this pandemic that are experiencing spikes in activity due to pandemic pantry loading.
Kimberly-Clark has been in business for almost 150 years providing facial tissue and personal care products, among other items. We’ve already seen the run on toilet paper in stores the past several weeks, but it is likely there will be a spike in demand for tissues, wet wipes and paper towels as well.
Brands like Kleenex, Scott, Cottonelle and Viva are all part of the Kimberly-Clark family. Their significant market share could position them well during the pandemic. As you look to stock up on your favorite brands, do they include Kimberly-Scott products?
Clorox is a well-known manufacturer and retailer of cleaning supplies with brands such as Clorox, Pine-Sol and Formula 409. Since 1913, Clorox has been providing its customers with cleaning, household and lifestyle products that have helped communities in times of global health crises and natural disasters.
Today, Clorox’s CEO, Benno Dorer, shared a letter with shareholders and the public outlining the company’s commitment battling this pandemic and their top priorities as a company. By maximizing the supply of their products, protecting the health and safety of their employees, and supporting frontline caregivers, Clorox outlined a plan forward during these uncertain times.
The J.M. Smucker Company (Tii:SJM)
Smucker’s has been a household name for more than a century. Since 1897, the company has evolved into a manufacturer of branded food and beverage products worldwide, including iconic brands like Folgers, Dunkin’ Donuts, JIF, Crisco, and of course, Smucker’s Jelly. Your pet has also likely enjoyed their products with brands such as Meow Mix, Kibbles ‘n Bits, Milk-Bone and Nature’s Recipe.
As we continue to navigate what it means to work from home, we’re also doing the same when it comes to eating from home. Even in a pandemic, we all need to buy coffee and pet food. Not to mention the comfort foods we need to help us cope in this difficult time. For me, that has meant more PB&J sandwiches for lunch.
BJ’s Wholesale Club (Tii:BJ)
Everyone has heard of Costco (Tii:COST) and likely has a location near them, but another publicly traded warehouse club to consider is BJ’s. They’re primarily located on the East Coast, offering customers a variety of grocery items in bulk. Although we’re unsure what long lasting impacts, if any, closures might bring to BJ’s stores, they continue to remain open and closely follow recommendations from the CDC.
Although it may be difficult to find toilet paper on shelves these days, there are many reasons to love warehouse clubs. Where else could you find a Dunkin’ Donuts kiosk instead of a food court or stores that have a self-checkout lane so customers can avoid lines? Those two reasons alone are enough to encourage even the most diehard fans of Costco and Sam’s Club (Tii:WMT) to sample the competition. From bulk food to baby wear, and toilet paper to tires, BJ’s has become well known over the last 35 years as a popular wholesale club that has maintained a robust membership of patrons that simply can't get enough of their products.
MGP Ingredients (Tii:MGPI)
Since 1941, MGP has been producing industrial alcohol (used in disinfectants and hand sanitizers) and distilled spirits (vodka, gin and whiskey). If this pandemic has taught us anything, it’s that having clean surfaces might be equally as important has having your favorite adult beverage while social distancing at home.
Early Nielsen data suggests that consumers are braving the pandemic to patronize their local liquor stores and stock up on distilled spirits. A recent comparison showed that during the financial crisis of 2008, sales of alcoholic beverages expanded more than 9% in 2008 when the average unemployment rate was 5.8%. In 2010, sales jumped more than 9% as unemployment grew to 9.6% according to financial information company Sageworks. Will this pandemic and possible recession prove any different? Time will tell, but the recent spike in liquor store sales is very telling.