In 2020, we are witnessing the influx of capital and Internet into the food and beverage industry and the arrival of new consumption wave. The booming new talents seem to make us ignore the turning point brought by the epidemic situation. In contrast, the traditional industry giants are telling different stories and leaving a deeper brand in their development history with the epidemic situation.
Recently, the listed giants in the food and beverage industry have released their annual financial reports in 2020. As the industry wind vane, what are their achievements in this challenging year? What are the key business adjustments? What are the new growth points?
Growth or decline?
A glimpse of one or two from key figures
Foodaily collected the annual financial reports of 11 food and beverage enterprises in 2020, including Nestle, Pepsi, Coca Cola, Yizi, Unilever, Danone, Hershey, kraft Heinz, Starbucks, McDonald’s and Yum China, and summarized their annual revenue.
Last year, the continuous and complex epidemic situation in the world caused macroeconomic turbulence and brought a great impact on the food and beverage industry, especially for multinational enterprises. From the financial report disclosure of the above enterprises, we also see some relatively consistent performance.
Sales / acquisitions accelerate business integration and transformation
Food and beverage giants have been in the process of transformation in recent years, and the arrival of the epidemic seems to accelerate their process. Nestle group purchase Nestle group’s selling of silver heron peanut milk and silver heron in, and agreed to buy Tsingtao Brewery’s water business in Nestle Chinese mainland. Unilever also frequently launched the intention of stripping tea business, coupled with the observation of their global sale and takeover actions, the giant’s core business. The line is becoming more and more obvious, which we will elaborate later.
Speed up the layout of e-commerce channels
With the increase of home consumption demand, e-commerce channel has become an important growth power for giants in 2020, and will continue to increase in 2021
China’s market performance is mixed, but it is one of the focuses of “future growth”
In the middle and late stage of last year, due to China’s effective control policies on the epidemic, the Chinese market made a significant contribution to the rebound of the performance of enterprises.
Take PepsiCo as an example, China is one of the engines driving PepsiCo’s business growth. In the fourth quarter of 2020, PepsiCo’s net revenue in China has achieved a high single digit growth. In 2020, PepsiCo’s net revenue in the Asia Pacific region increased by 18%. In addition to the growth of organic sales and pricing, PepsiCo’s acquisition of Baicao brought about a growth impact of 10 percentage points.
Photo source: PepsiCo China official website
Coca Cola’s financial report for the fourth quarter and the whole year of 2020 shows that in the Asia Pacific market, China’s single case sales of soda products have achieved steady growth.
The main impact of business divestiture, Nestle’s revenue in the Chinese market fell last year. In addition, Hershey’s net sales in China decreased by 46.0%, with a decline of 82.2% in the fourth quarter. There are many reasons for the sharp decline of its performance in the Chinese market, including the impact of the epidemic, its own positioning, management problems, and the development of China’s entire candy industry is in a bottleneck period.
However, the above enterprises have said in their financial interpretation that the Chinese market will be one of the incremental markets they will focus on and layout in the future.
The giants that occupy the main market share of the category,
What are the performances in 2020?
Beverage category: greatly affected by channel
At present, the global beverage category scale is about 600 billion US dollars, and is growing at a rate of 4% – 5%. Last year, due to the decrease of offline catering and the closure of cinemas during the epidemic period, the consumption of beverages was greatly affected.
Among them, as more than half of the demand for Coca Cola’s series of drinks occurred in offline scenes such as cinemas, restaurants and stadiums, the flow restriction and closure of outdoor places during the epidemic period had a great impact on Coca Cola. Coca Cola’s annual revenue fell by 11% year on year last year, and the revenue of several sub business sectors declined. However, in the Asia Pacific region, Coca Cola’s market share in coffee and tea will increase in 2020. Similarly, Pepsi’s beverage sales in North America and other regions also declined.
In addition to coping with the decline in sales brought by channels, Coca Cola and Pepsi Cola, the two giants, paid more attention to the localization strategy of product innovation last year to meet the tastes and preferences of consumers in different regions.
Photo source: zhonghua.com
Earlier, Pepsi launched a new product of Osmanthus flavored cola, and launched its new localization strategy with its unique Chinese style advertisement. Coca Cola launched a number of warm winter drinks in the Chinese market to better approach the drinking habits and taste preferences of Chinese consumers in different scenarios.
Photo source: Coca Cola
Snacks: fast recovery and strong growth
Due to the increase of home consumption and online consumption, the snack industry recovered rapidly in this epidemic, and grew strongly in the post epidemic period. Among them, the global snack giant billion realized its revenue of 26 billion 581 million US dollars in 2020, up by 2.8% over the same period last year. The company said that the long time COVID-19 stayed in the market in 2020 increased the demand for snacks.
Pepsi, which also takes snacks as one of its core businesses, has great confidence in the growth of snacks, and enriches its snack business by acquiring some emerging brands such as bar, so as to penetrate into more consumption scenarios.
Image source: Google
According to the research data of Grandview, the global healthy snack market is expected to reach US $32.99 billion by 2025, with a compound annual growth rate of 5.2%. Among them, high protein snacks, sugar free food, puffed food transformation is worth exploring, looking forward to see the innovation and development of snacks.
Condiments: a small surprise
Under the epidemic situation, the people’s enthusiasm for cooking burst out, making the seasoning business soar. Kaidu consumer index research shows that from January to may in 2020, the sales of soy sauce, oil consumption, chili sauce and other Chinese condiments increased by 14% year on year, and the overall sales of meituanshang soy sauce, vinegar, shisan Xiang and other condiments increased by more than 8 times.
Kafheinz said that there is a huge opportunity for China’s condiment market. With Weishida, it has become the second largest Chinese condiment brand and the first Western sauce brand in China. It will seize this advantage and continue to add weight to the Chinese market in the future.
Image source: Google
Nestle’s financial report also showed that its condiment business achieved a single digit growth. Not long ago, the two seasoning brands of Nestle China, Taitaile and Haoji, have basically completed the internal business integration. In the future, while retaining their brand independence, Taitaile and Haoji will share their teams and resources in sales, marketing, supply chain, channel, product research and development, which shows Nestle’s layout in the field of condiments.
With the rise of lazy seasoning, whether these two foreign giants will enter the new opportunity of one-stop compound seasoning remains to be seen.
Candy and chocolate: epidemic highlights industry bottleneck
Nestle said in its financial report that the growth of its candy and chocolate business declined slightly, mainly due to the reduction of impulsive consumption and gift giving demand. Hershey, whose core business is candy and chocolate, has a very different performance in China and North America. In 2020, Hershey’s global net sales reached US $8.15 billion, an increase of 2% over the same period of last year. The North American market was the most eye-catching. However, China’s market sales fell 46%, of which 82.2% in the fourth quarter.
Image source: Google
It can be seen that the arrival of the epidemic also highlights the dependence of candy and chocolate on the Spring Festival, and also rings an alarm for the industry. Compared with 10 years ago or even 5 years ago, the consumption demands of the candy industry are quite different. Whether we can understand the new needs of new users becomes the key to reshape the brand image and reconstruct the user cognition. (read for details: Why are those enviable new consumer brands not in the candy industry?)
Catering: the key to digital transformation
Due to the compulsory isolation measures taken by governments to curb the spread of the epidemic, the offline real economy has been greatly impacted, restaurants and coffee chains have been hit hard, the overall turnover of McDonald’s and Starbucks has declined continuously, and the catering industry has ushered in a wave of closures.
Reducing costs is a short-term strategy to deal with the impact of the epidemic, and only by actively seeking change can we remain invincible in the wave of change, and digitization is one of the directions.
By the end of 2020, the revenue of Starbucks’s China digital business (including dedicated star delivery service and Kwai Fu mobile phone order service) has exceeded 26%, and has continued to grow rapidly. Under the epidemic situation, Starbucks has lost the advantage of “the third space” in the short term, and “the fourth space” will continue to have a positive impact on the company’s performance.
Image source: YouTube
Similarly, KFC and McDonald’s, which had embarked on the digital road of personalized marketing and delivery services a few years ago, also played a certain advantage during the epidemic period. In addition to the demand of modern young people for lazy homes, take KFC’s delivery business as an example, its sales accounted for 20% of the total sales and covered 1000 + cities.
Where is the new growth space that giants are optimistic about?
Although a small number of people, but the plant base is a potential pastry
In the past few years, from plant milk to plant meat, plant-based substitutes have become popular all over the world. The major brands have tested the plant-based market, and opened a new world for the food and beverage industry.
Nestle said in its financial report that although the epidemic has reduced the demand for out of home channels, plant-based food continues to maintain a strong double-digit growth. In December 2020, Nestle also officially released its first plant-based brand “jiazhiyao” to enter the Chinese market.
At the end of last year, Zhizhuo butcher officially landed in the Chinese market, and jointly launched Zhenxiang plant-based Huangbao with the catering giant burger king.
Click on the picture to see the details
In addition, Pepsi also said that it regards plant-based snacks as a space for future growth and plans to officially enter the Chinese market in 2021. Coca Cola’s five new global beverage divisions also include the plant beverage category.
It is worth mentioning that entering the plant-based field has become an important means for giants to achieve the goal of sustainable development.
In addition, the pandemic has made consumers realize that health is a crucial issue, and people pay more attention to the nutritional and health functions of food. The financial reports of Nestle and Unilever also show that the growth momentum of functional food is strong, and the future will be the focus of their bets.
In particular, based on the change of consumers’ cognition of health, Nestle health science has made large-scale acquisitions again and again, increasing its layout in the field of functional health food.
Finally, in addition to the layout of the category & track, Nestle, Pepsi and Coca Cola have emphasized the internal operation strategy of “consumer centered” in their financial reports, and quickly adapt to the changing consumer behavior and trend through the establishment of internal platform and digital ability.
 Exclusive | Nestle’s two major condiment businesses in China are “together”! The president of Taile will also take care of Hodge!
》, xiaoshidai, January 29, 2021
 Candy war in the Spring Festival, bullet finance, February 15, 2021;
 Hershey China hands over the “worst” annual report card: the adjustment shakes the morale of the army, and the performance is almost cut by the waist, FMCG elite club, February 26, 2021;
 PepsiCo China will grow against the trend in 2020! Global CEO says it’s going to be this year, “snack generation, February 24, 2021
 It’s not easy! Under the epidemic situation, Nestle China’s revenue exceeded 44 billion yuan last year, and many businesses are growing, “xiaoshidai, February 18, 2021
Note: relevant information of financial report data comes from official disclosure of enterprises.
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