The Goods (U.S. Edition) – Dollars and Sentiments
Welcome back to The Goods! This week we’re discussing microplastics as a marketing tactic, why people are buying fewer smokes and snacks at the gas station, and PepsiCo’s $2 billion buyout of a soda brand.
Last week, the founder of Pirate’s Booty Snacks declared himself mayor of the quiet Village of Sea Cliff, Long Island. Evoking a 2009 state law that empowers residents to dissolve or reformulate their town, Robert Ehrlich marched into the Village Hall, announcing that he was the new mayor and everyone else was fired. The snack food mogul – who professionally uses the title Captain Bootyhead – ultimately received only 62 write-in votes in the local election, with the incumbent mayor receiving over 1,000. Mr. Ehrlich’s response? “I’m still the mayor,” he said, adding that he wants to meet with the governor to enforce his claim.
What’s In: This Week’s Trends
- A Little Less Discretion, Please? Inflation, tariffs, and a general feeling of the unknown continue to plague consumers and create ripples across the retail and travel industries. America’s largest airlines – United, American, Delta, and Southwest – have all reported slowing demand across both leisure and business travel. Other historically strong companies like Dick’s Sporting Goods and E.L.F. Beauty issued weak forecasts in recent weeks, and Dollar General said the company is not anticipating improvement in the macro environment for its core consumer in 2025. As Delta’s CEO so aptly put it: “Consumers in a discretionary business do not like uncertainty.”
- The Fry Who Loved Me: Demand for non-toxic, microplastic-free cookware is surging – with searches for “nontoxic cookware” peaking on Black Friday and “carbon steel cookware” rising 350% year-over-year – and marketers are adjusting their ads accordingly. Caraway’s “Quit Microplastics” campaign has driven a 107% increase in featured product orders and a 125% revenue jump in prep ware, and the company promotes a “Microplastic-Free” section on its website. Other competitors are promoting PFAS-free ceramic-coated pans by emphasizing transparency, durability, and cleaner cooking as consumers are willing to pay a premium for safer materials.
- A Berry Fluid Situation: The volatility of Trump’s tariff policies is disrupting the U.S. produce market, which relies on $20 billion in annual fruit and vegetable imports from Mexico. Kroger and other retailers are adjusting their supply chains to mitigate the impact, while other companies have already incurred losses from abrupt tariff changes as they are forced to cancel – then replace – produce orders. Supermarkets are now forced to weigh how much of the added costs to pass on to inflation-fatigued consumers, without risking they go elsewhere for their avocados and leave them with rotting produce.
Cash or Card: Consumer Behavior
What’s going on with the consumer these days? This week we talk about the downturn of convenience store spending and consumer confidence.
- Pump Scare: According to data from Circana, U.S. convenience-store sales dropped 4.3% year-over-year, as rising prices curbed consumer spending on purchases like snacks and cigarettes. As more consumers simply pay at the pump and hit the road, refrigerated products and chocolate candy are also down 7% and 6% respectively. To counteract the downturn, brands are adjusting marketing and pricing strategies to boost convenience-store sales. PepsiCo is developing mini meals like Doritos with warm nacho cheese, J.M. Smucker is rolling out limited-edition cherry Twinkies at 7-Eleven, and Reynolds American is introducing a more affordable Newport cigarette.
- Dollars and Sentiments: Consumer sentiment took a tumble of 11% this month, according to the University of Michigan’s index. Sentiment is at its lowest level since November 2022 and is down 27% compared to the same time last year. Particularly worrisome was a 15% decline in the expectations component of Michigan’s index, which is based on how consumers expect the economy to progress over the next year and can help predict future spending. This data comes as retail sales rose only 0.2% in February, lower than the 0.7% economists projected.
Making Moves: Industry Transformations & Innovation
ICYMI, even industry icons need to reinvigorate their brand presence through unique and creative ways. Here are some new brand moves that you should know about:
- Brine-Tuned Tech: Kraft Heinz is implementing AI and machine learning to boost productivity, enhance its procurement processes, and work towards an autonomous, supply chain with visibility “from farm to fork.” Known as the Kraft Heinz Lighthouse, the platform acts as a control tower that analyzes real-time plant operations and distribution channels to enable data-driven decision making. The food giant is also using machine learning at the ingredient level. For instance, automated cucumber quality inspections – which can pick out a single defective cucumber from a truckload – have boosted pickle production efficiency by 12%.
- Sip and Stay Awhile: Gone are the days of your laptop dying mid-macchiato. In the latest effort to make Starbucks cafés a prime spot for a sip and a stay, CEO Brian Niccol is finding ways for consumers to fuel up on more than just their oat milk iced lattes. The chain is currently testing a café redesign in the U.S. focusing on providing more power outlets, as well as comfier seating. These are the latest additions to Niccol’s “Back to Starbucks” plan, moving away from mobile order madness and towards a cozy local coffeeshop vibe.
- Something Blue at Old Navy: Old Navy has quietly debuted a line of special occasion wear for women called “The Occasion,” which features dresses for special events including weddings, parties and prom. Prices range from $25 to $65, answering demand for affordable event wear that is currently met largely by ultra-cheap fast fashion companies. This new category could help address what some analysts see as a sales plateau for the apparel giant. Last year, designer Zac Posen became chief creative officer of Old Navy and creative director of parent company Gap Inc.
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