12 brands that are emerging healthier from the coronavirus
The coronavirus (COVID-19) continues to disrupt industries. Luxury, travel, big-box retail and international chains especially are feeling the strain as the coronavirus, which has 95,000 confirmed cases and has led to 3,200 deaths worldwide, has soured global economic activity.
Apple, McDonald’s, Starbucks and Yum Brands have had to close up stores overseas; companies are canceling industry events or moving them online; and consumers are staying home, away from public areas like movie theaters, gyms and malls. Even the upcoming James Bond film, inconveniently called “No Time to Die,” has had to move its opening from April to November.
But not all companies are reeling from the disastrous outbreak. Some brands are seeing their products sell out or their stock rise amid the turmoil.
Standout brands: Lysol and Clorox
It’s no surprise that cleaning products are dominating the market. Store aisles across the U.S. are empty and prices are surging online from third-party sellers. Reckitt Benckiser’s Lysol is one of the top performers. Spray sanitizers, led by RB’s Lysol, were up 32 percent from a year ago, according to Nielsen. The Center for Biocide Chemistries also lists several Lysol products as suitable for fighting the coronavirus.
“We are seeing some increased demand for Dettol and Lysol products and are working to support the relevant healthcare authorities and agencies, including through donations, information and education,” said the company in its fourth-quarter earnings.
Lysol is one of the only cleaning brands that has mentioned the coronavirus in its marketing. On Facebook, it has shared ways to keep coronavirus at bay, as recommended by the CDC, and also launched an Alexa Skill this week that reveals the cold and flu levels in the area.
On social, Lysol is leading other cleaning brands with over 100,000 mentions since January 1. These peaked on February 27 when it was mentioned 7,000 times, a 750 percent increase in daily mentions, according to data analytics company Brandwatch.
Clorox, whose namesake bleach and disinfecting wipes are permitted to claim they kill viruses on surfaces, is one of the few stocks to fare well amid a broad market selloff in recent weeks, up almost 10 percent since Feb. 3 as the Dow has fallen 7 percent since then. Sales of Clorox Disinfecting wipes were up 9.8 percent for the four weeks ending Feb. 22, according to Nielsen data from Bernstein Research.
While Clorox is providing information on its websites and in social media about how to use its products to disinfect surfaces, Clorox Chief Marketing Officer Stacey Grier says, “What we don’t do is market to fear.”
Another Standout: Purell
Gojo USA’s Purell is another obvious survivor of the outbreak. The hand sanitizer has widely sold out across the country, even in parts of the U.S., like Ohio, that have yet to declare a verified case of the illness. Sales of hand sanitizers were up to 54 percent year-over-year for the week ending February 22, according to Nielsen.
This week, Purell was out of stock at big-box retailers like Walmart, Walgreens, CVS and Rite-Aid nationwide. Online, those who were determined enough, could purchase Purell from third parties on Amazon for $24.95 for an 8-ounce bottle or $99.99 for a 12-pack of 8-ounce bottles. USA Today published a home recipe for those who lucked out. A Gojo spokesperson said the company has started to ramp up production.
In late January, the Food and Drug Administration issued a warning letter telling Gojo to stop making unproven claims that Purell helps eliminate Ebola, MRSA or the flu. So the company is being careful not to claim that its hand sanitizer kills coronavirus. However, its surface disinfectant is regulated by the Environmental Protection Agency, and so the company is allowed to state that the product “can kill COVID-19 on hard, non-porous surfaces.”
Standout brand: 3M
Although the U.S. Centers for Disease Control and Prevention has advised that most surgical masks won’t keep people from getting the coronavirus, it doesn’t look like it's impacting sales. Nielsen reported that for the four weeks ended Feb. 22, sales of medical masks more than quadrupled and of household maintenance masks more than tripled from a year ago.
3M, maker of respiratory masks, seems to be leading in production and output. 3M respirator masks joined Clorox Disinfecting Wipes as the two products seeing the biggest increases in demand on Amazon last week, according to an analysis by Profitero. The U.S. is also seeking 35 million additional masks per month from 3M, and intends to buy over 500 million over the next 18 months, according to Reuters. 3M has been open about ramping up its production and getting to questions as soon as it can.
Online and food delivery services
Standout brand: Instacart
As people head to their computers to stock up on everything from hand sanitizer to toilet paper, food delivery services like Uber Eats believe they will also see demand increase. According to NPD data, there was a 20 percent growth in food delivery spending in China during January, compared to the same time last year.
“Certainly our rides business, to the extent that people stop leaving their house, will take a hit, while our business Eats will probably actually benefit,” said Uber CEO Dara Khosrowshahi on Wednesday, speaking at a conference in San Francisco.
The increased demand on larger delivery services like Amazon, eBay and Walmart might also be prompting people to try smaller services like Instacart. Amazon, for instance, is facing product shortages, juggling third-party sellers that are jacking up prices, and has had to remove more than 1 million products that have made fake coronavirus claims, according to Forbes. While Instacart is also communicating shortages it is seeing greater demand. On Wednesday, an Instacart spokesperson told CNBC that demand for its services had multiplied by 10 times in the previous 72 hours, while its growth rate had surged by 20 times in California, Washington, Oregon and New York.
Standout brands: Oatly and Campbell’s
This week, Nielsen published a study of what people were stockpiling in response to the coronavirus outbreak. It found an uptick in people purchasing typical non-perishable foods like canned beans, fruit snacks and pretzels, but also that a surprising category was leading the surge. Sales of oat milk spiked at more than 300 percent in the week ending February 22. Oat milk even topped spikes in hand sanitizers (54 percent) and disinfecting spray (19 percent).
That’s good news for Oatly, which leads the category. On Facebook, the brand even made a sassy post about stockpiling its product. On the platform, it also addressed some shortages it was seeing.
Meanwhile, Campbell Soup Co. CEO Mark Clouse told CNBC on Wednesday that it is increasing soup production to prepare to meet increased demand because of the coronavirus. Clouse said there has been an increase in demand for both online and store retailers over the past weekend. “We’ve upped that level of production to be able to maximize our inventory to be prepared for whatever unfolds here,” said Clouse. Campbell Soup stock went up 10 percent on Wednesday.
Streaming services and in-home entertainment
Standout brand: Netflix
As people look to quarantine themselves from the virus, they’re spending more time at home. What are they doing at home? They’re streaming, of course, and there’s more options than ever with Disney+, Apple TV Plus and soon-to-launch services Peacock, HBO Max and Quibi.
Netflix has been a standout so far. Its 61 million U.S. subscribers seem to be watching, and investing, in the service. Netflix’s stock has continued to rise, even as the S&P 500 has seen its worst declines since 2008. Last week, Netflix’s stock was up 5 percent as the overall market dipped by 5 percent. This week, that trend is only continuing. On Wednesday, Netflix stock surged 4.1 percent to $383.79, its second-highest peak since the streaming service first opened to the public.
"We are boosting our anticipated subscribership numbers for Netflix's first quarter, primarily due to what we believe is a 'cocooning' effect at hand due to fears surrounding the coronavirus," Imperial Capital analyst David Miller said in a note to clients. He forecast Netflix will bring in 7.5 million new streaming subscribers worldwide in the first quarter.
And is it a coincidence that the at-home service is now streaming and featuring its new docuseries “Pandemic,” the 1995 film “Outbreak” and the 2016 TV series “Containment?” The correlation hasn’t gone unnoticed.
Standout brand: Peloton
The drama around the “Peloton wife” commercial didn’t appear to hurt the company, and it doesn’t look like the coronavirus outbreak will, either. Gym rats are staying away from the busy gyms that are breeding grounds for contagion. Many are choosing to work out at home instead.
Peloton, which sells stationary bikes for at-home workouts, seems to be benefiting. On Wednesday, Peloton stock was up 2 percent. Last week its stock was up by 14 percent.
"With new COVID-19 hotspots in South Korea, Italy and Iran, we believe certain US consumers will be less comfortable over time going to their gym and more likely to order a Peloton bike to stay home. This may drive higher unit sales and subscription revenue in 2020 than are currently in our estimates," Needham analyst Laura Martin wrote in a letter to clients.
This comes as gyms work to prepare for the outbreak, and potentially fewer customers, due to the fear of contamination in close quarters. Equinox sent an email encouraging members to use disinfectant wipes, and New York-based gym CityRow sent an email explaining how it is redoubling its cleaning efforts and introducing a more flexible cancellation policy. Gyms in China have already been livestreaming their classes as a way to retain customers, according to Reuters.
In the U.S., health and fitness apps overall are on the rise. In February, mobile downloads were up 5 percent over the previous year and saw a 40 percent jump year-over-year in January, according to analytics company App Annie, although new year’s resolutions could play a part in those numbers as well.
Virtual video conferencing
Standout brand: Zoom
With a ton of events being moved online due to fears of coronavirus contamination, virtual videoconferencing options like Zoom are becoming more popular. In the past week, Adobe, Google, Facebook, Starbucks and Shopify have moved their upcoming events online (See our industry tracker).
Zoom, which offers video and voice meeting services and webinars, has seen its stock jump 47 percent in a month as companies move events online and direct employees to work from home. On Thursday, the company announced its fourth-quarter earnings and saw its revenue soar by 78 percent to $188.3 million, compared to $105.8 million a year ago. The service now has 81,900 customers. In a webinar following the results, CEO Eric Yuan said, “It was a strong finish to our fiscal year,” but expects the impact from the virus to be temporary.
Standout brand: TJ Maxx
Big-box retailers are struggling with quarantined employees and getting their products shipped overseas, while clothing rental sites like Rent the Runway are taking precautions about the spread of bacteria and alerting customers about how they’re cleaning their garments. But off-price retailers are likely to be more resilient to the outbreak. They're less dependent on overseas sourcing from China, where many traditional retailers are seeing supply chain delays. Most discounters already have merchandise—excess inventory from full-price sellers—in hand and are ready to sell. Shares of TJX Companies, parent to TJ Maxx, have soared by 7 percent in the past week, and in its fourth-quarter earnings, reported a revenue of $12 billion, with same-store sales rising by 6 percent.
Constellation Brands’ Corona beer has indirectly found itself immersed in the conversation around the coronavirus, simply because it shares a name. The correlation that some consumers are making between the beer and the virus might eventually become a case study for those who believe that all publicity is good publicity. Constellation Brands CEO Bill Newlands spoke out about a PR survey that received a lot of press for claiming that “38 percent of beer-drinking Americans would not buy Corona under any circumstances now.” Newlands stated that sales were actually up, pointing to IRI retail sales that showed Corona Extra increased by 5 percent in the four-week period ending Feb. 16. Brandwatch says that the term “corona,” whether referring to the beer or the virus, has been mentioned more than 6 million times online since January 1 … and that’s a lot of name recognition, good or bad.
Contributing: Jack Neff, Adrianne Pasquarelli and Jeanine Poggi