The United States remains in uncharted territory due to the impact COVID-19 has had on the economy. While the health and welfare of Americans is still the top priority, the repercussions of shutting down most of the economy are hard to ignore.
33 million people have filed for unemployment benefits since the pandemic took hold, and the unemployment rate is nearly 15%.
Experts project that as many as seven million people will be left uninsured due to the economic impact of COVID-19.
Restaurant same-store sales fell more than 28% in March, making it the industry’s worst month on record.
The Congressional Budget Office reported the federal budget deficit in May was $424 billion, about double the same month last year.
But the news hasn’t been all bad. Peanut butter and jelly sandwiches have emerged as a quarantine staple. The J.M. Smucker Co. reported that it expects its net sales for fiscal 2020 to be down 1% from 2019, but better than its earlier expected guidance of a 3% drop. The company attributes the improved results to increased demand across all U.S. and Canadian retail channels driven by consumers preparing food at home. The company added that all of its manufacturing and distribution facilities remain open, and in fact, it’s boosted production.
Then there’s Nestlé, which reported its best first-quarter sales numbers in five years. North America and Europe sales were robust in March, powering a jump of 4.3% in the first three months of 2020 and outpacing analyst expectations.
Some TraceGains customers also are enjoying financial growth during the crisis.
TraceGains customer King Arthur Flour Co. experienced an unprecedented 2,000% jump in sales in March, year-over-year, as consumers embraced home baking.
And it’s not just home bakers driving sales. Bread sales across the board have jumped sharply. TraceGains customer Bimbo Bakeries USA reported a jump in first-quarter sales of 10% over the previous year. According to Food Business News, the company also recently reopened a manufacturing plant in West Hazelton, Pennsylvania, to make bread and buns to keep up with demand.
Nearly two-thirds of TraceGains customers have performed better than expected during this outbreak, based on one industry report.
Good News, Bad News
Dietary supplements manufacturers, in particular, have seen soaring demand during the crisis. A recent study found that “consumers have been increasingly looking for food and beverage options that offer functional benefits during the past year, but interest has risen even more during the pandemic.”
One example of this trend: Web searches for kombucha for health reasons grew 73% month-over-month, and ingredients like elderberry and rosemary have seen triple-digit increases. Amazon has reported vitamin sales in March were up 166% over last year.
According to research from Imbibe, one of the industry’s leading beverage developers, “Expect greater demand for beverages that support improved immunity, sleep, and stress relief. While there was a market for these functional beverages before COVID-19, consumers have a heightened focus on staying healthy right now.”
Finally, Joan Driggs, vice president of thought leadership and content for IRI, a Chicago market research firm, told Nutritional Outlook that during “the one week ending March 8, 2020, sales growth for overall dietary supplements skyrocketed more than 35%.”
A frequent complaint from manufacturers has been a chronic struggle to find alternate suppliers because of the supply chain’s lingering tension. TraceGains built Market Hub, a powerful sourcing directory for ingredients, items, packaging, and service providers to make it easier. Powered by TraceGains Network, food and supplement makers can acquire new ingredients and automatically collect supporting quality and regulatory documentation from a growing document library.
Sarah Hazaert, Supply Quality Manager at Nature’s Way, said, “We used Market Hub to identify a supplier for an ingredient and were able to complete the necessary qualification activity within a week using TraceGains. It’s a process that historically takes several weeks or even months. The supplier recently received their first large purchase order.”
Request a Market Hub Demo today to see how your business can experience precise sourcing fast without having to conduct research and chase down suppliers and documents.