Another year, another top spot for Nestlé. By product category, the largest contributor to organic growth for Nestlé was coffee, fueled by strong momentum for the three main brands Nescafé, Nespresso and Starbucks. Sales of Starbucks products grew by 17.1% to reach CHF 3.1 billion, generating more than CHF 1 billion of incremental sales compared with 2018, the company revealed in its 2021 full-year report. This year, Nestlé notably transformed its global water business, sharpening its focus on international premium and mineral water brands and healthy hydration products. In March, Nestlé completed the acquisition of Essentia Water, a premium functional water brand in the U.S., and the sale of its regional spring water brands, purified water business and beverage delivery service in the U.S. and Canada. Across its portfolio, Nestlé completed acquisitions and divestments with a total value of around CHF 9.9 billion in 2021.
PepsiCo remains the second-largest food and beverage company in the world although YOY revenue increased, the company is bracing for a challenging future. Inflation in prices for ingredients combined with higher shipping costs will hurt its prospects next year.
Despite the challenges, the combined revenue of the food and beverage market this year was $435.3 billion and is expected to grow to a staggering $857B by 2025.*
In a bid to ride the post-pandemic sales boom, Bacardi North America is launching a record amount of new products this year.
The privately-held parent company behind brands like Bacardi Rum and Patron is set to launch more than 40 new products this year, which a brand spokesperson said is the most launched in a single year in the company’s 159-year history. Many of the launches have been and will be in trending subcategories like ready-to-drink (RTD) and low-alcohol-by-volume (low-ABV). In the beginning of 2021 alone, Bacardi has tripled and quadrupled respectively its RTD and low-ABV product launches, compared to the full year of 2020.
E&J Gallo Winery also announced the acquisition of wine brands including, Taylor, Clos du Bois, Hogue, Wild Horse, Arbor Mist, Ravenswood and Manischewitz.
Chobani, founded in 2005 by Hamdi Ulukaya, filed to go public through an initial public offering on Nov. 17, 2021, amid a surge in investor interest in health-focused and socially responsible companies. The company did not disclose the number of shares to be sold or the offering price, but Chobani was estimated to be valued at $10 billion.
The public offering was expected to happen in January 2022 but in March Chobani’s top executives, including the president and COO Peter McGuiness, abruptly resigned, causing delays. Today’s volatile stock market and disappointing performance by previous food company IPOs has created further delays pushing the public offering to the second half of 2022 or even 2023, according to the Wall Street Journal.
Today consumers are interested in healthier, less processed foods. In light of the pandemic, the risks of COVID-19 have made consumers more interested in healthier, less processed foods that will boost their immune systems. However, less processed foods mean more food products that will need temperature control, increasing the growth of cold chains. Recently, a MarketsandMarkets report shows that the cold chain market is valued at $4.7 billion in 2021. Furthermore, it’s estimated to reach $10.2 billion by 2026. That’s an expected Compound Annual Growth Rate (CAGR) of 16.6% from 2021 to 2026.
Although alcoholic drinks account for $93 billion of the total $506 billion food and beverage market (see Booze Boom), non-alcohol drinks account for $79 billion. It is projected that the non-alcohol sector growth is expected to reach $160 billion by 2025, compared to the projected $123 billion that alcoholic drinks are expected to reach as non-alcoholic drinks outpace other drinks.
Non-alcohol products have done especially well in e-commerce, as Nielsen found a 315% increase in online non-alcoholic and low-alcoholic beverage dollar sales in the same time. However, the demand has led to a retail first — stores devoted to non-alcoholic spirits. One is Sipple, the first non-alcoholic bottle shop in Texas that opened in October 2021. The following month, Boisson opened in Brooklyn, sharing the same dedication to exclusively alcohol-free beverages.
Sustainability considerations now influence the majority of the world’s grocery shoppers when buying packaged foods such as potato chips and cookies, according to Cargill’s most recent global FATitudes survey.** The proprietary research finds 55% of consumers indicate they’re more likely to purchase a packaged food item if it includes a sustainability claim, a four-point jump since the company last fielded this research in 2019.
An increased interest in sustainability was the most notable change from the previous survey’s results. More than half of the countries surveyed showed an increase in the influence of sustainability claims, with the change most evident in these countries:
For the first time, the survey also asked consumers what type of sustainability claim they were looking for. “Sustainably sourced” and “conservation of natural resources” topped the list, ranking well ahead of more specific claims such as Fair Trade, reduced packaging and fair/living wages in most every country included in the survey.