September 14, 2022

4 minute read

Last week was a busy one for CPG companies as Barclay’s hosted its annual consumer staples conference, featuring over 20 different company presentations and interviews.

 

I pulled out the most interesting takeaways from the conference to shed light on consumer behavior, elasticities, supply chain, and management outlooks for the balance of the year.

 

Big picture, it’s unclear whether the unwanted volatility that’s plagued consumer brands since the start of the pandemic is any closer to easing.

  • Management commentary talked a great deal about the rate of inflation subsiding, but there are growing concerns ’23 is setting up for a super promotional period.
  • Retailer ordering patterns are also changing even in staple categories where sell-through has been positive. To what degree is this transitory and how long until normal patterns return?

 

Companies are affected unevenly in the short-term, with some having to reduce their outlooks in response to falling demand that caught them off-guard, particularly in August.

 

While tough to put a finger on any one thing, it feels like companies have no better hold on what the near-term future holds for consumer behavior, and the reduction in outlooks from some companies suggests a more negative sentiment than 60 days ago.

 

This feeling is supported by a tool which estimated a sentiment of negative 48 (on a scale from -100 to +100) from the conference. This negative sentiment is in-line with the negative 55 score from when these companies last reported results (mostly in July and August).

 

To form your own conclusion, I summarized the most interesting findings across four dimensions:

  • Consumer behavior
  • Volume elasticities
  • Supply chain issues
  • Financial Outlook

Let’s dive in.

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