Inflation drives shift to semi-scratch cooking
The thesis suggests that persistent inflation is forcing consumers to substitute dining out with 'semi-scratch' home cooking, boosting demand for base ingredients like broths and condensed soups.
The argument
Campbell's analytics head and industry analysts noted that while overall sales fell due to declines in ready-to-eat soups and snacks, consumers are increasingly buying cooking staples to manage tight household budgets.
The thesis, stress-tested
✓ What validates it
- ✓Volume growth in Campbell's condensed soup and broth categories in the next earnings report
- ✓Continued decline in restaurant industry transaction volumes
▸ Risks discussed
- ▸Declining sales in higher-margin ready-to-eat and snack segments offsetting ingredient gains
- ▸Consumers returning to dining out if inflation cools
Hear it yourself
"More people are cooking from scratch these days or, as the company puts it, semi scratch. Market Place's Stephanie Hughes has that one. Christine McDaniel grew up in the Midwest. And when she got out of there, she says the last thing she wanted to do was make a casserole. But in the past year, she's gotten really into them. Specifically, one, beat with cream of mushroom soup. It's just kind of gotten to be a a go to for us. McDaniel, who now lives in Northern Virginia, is doing a lot more cooking from scratch these days for her kids, her dogs. She even makes her own horse treats."
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