No Gusher’s Here, Minimal Service, and Dear Sweetness

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Finally, we close with brief comments on No Gusher’s Here, Minimal Service, and Dear Sweetness. First, US oil production fell significantly over the past year. From over 11.8 million barrels per day (BPD) of production in 2019, oil production dropped to 10.5 million BPD in 2020 and is expected to drop further to 10.2 million BPD this year. On top of this, with the Biden Administration’s ban on new permits for oil and gas drilling on Federal lands, almost 24% of US production would feel an impact over time. Given this backdrop, we see No Gusher’s Here. Second, Household Debt Service to Disposable Personal Income (DPI) dropped significantly over the past year, from almost 10% of DPI to close to 9%. This would mark the lowest levels in over 50 years. For the Consumer, given the low interest rates, it is Minimal Service. And Third, Mars announced a 10% rise in the price of its candies for 2021 with another price hike of similar magnitude planned for 2022. Ferrara, the Italian chocolate company, announced a high single digit price increase as well. Hershey plans to follow these moves. For the US Consumer, it will be Dear Sweetness in the confectionary aisle.

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