State of Big Food™:2022

SnaxDaddy, u up?

May 20

A newsletter on upcoming food and beverage trends that offers a curation of brands and aesthetics written by Andrea Hernández.

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BigFood™’s big moves.
Snaxshot of market in the past year.

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Return of the Snax

There’s no denying Millennials have given snacks their redemption arc, as most of our generation forego meals in lieu of snacks. After a shock to their system, brought on by 2020’s “black swan event” —SnaxDaddy has begun to shape out. From acquisitions, to divestments, to lawsuits, shutdowns and war, here’s what BigFood has been up to in 2022.

State of Snax

—Consumers are experimenting with new channels to buy snacks, with 53% reporting shopping for snacks using at least 3 nontraditional /emerging channels in 2021. Channels include delivery apps, online ordering for curbside or in-store pickup, and DTC websites.
—80% of global consumers are expecting to be able to purchase snacks on demand.
—Functional foods are out, permissible indulgence is what people really want.
—Bob Iger recently invested in GoPuff, valued at $15 Billion, the company continues to focus on emerging brands, recently launching their own accelerator program
—Reducing waste is top of mind, as consumers say the #1 environmental impact on food choices is availability of low waste packaging (78%). They also want snack brands to offset their environmental impact.
—Social media is rising as source of discovery, 55% of global consumers say social media has inspired them to try a new snack in the past year, including even greater majorities of Gen Zs (70%) and millennials (71%).
—SnaxParadox: when it comes to on-the-go snacks, high protein, low carb is high in demand, meat snacks category grew by 8.8% in retail value from 2019-2020 to reach $103 million.
—Office snax will become a thing of the past as companies cut perks.

PepsiCo Frito Lay:

In 2021, PepsiCo’s net income totaled $7.62 billion, up 7%/revenues were $79.47 billion, up 13% compared to 2020.
2021, Pepsi reported increasingly taking market share from Coca-Cola.
Back in 2021, PepsiCos agreed to divest Tropicana, Naked and other North American juice brands for pretax cash proceeds of $3.3 billion.
Thanks to double-digit percent increases for the prices of many of its popular snack and beverage products, PepsiCo saw a big jump in revenues in Q1 of 2022.
Beyond Meat and PepsiCo launched meatless jerky, becoming the first shelf stable product from $BYND as part of their ongoing partnership, but can’t keep the company from losing money.
In the past 5 years, Frito Lay's revenues have out-grown $MDLZ das their global brands gained strength and via deeper penetration in the emerging markets.
In Canada, they recently ended a price standoff with Loblaw one of the country’s biggest grocer chains.

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TLDR: 🛫💰🍊🚮📈🥩🌱🧑🏼‍⚖️🛒🍁

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Coca Cola Company:

Recall that Coca Cola divested half of its portfolio back in 2020, around 200 brands.
SugarDaddy’s pockets are growing, 2022 Q1 saw sales surge 16% to $10.5 billion, and profits of $2.8 billion rose 24% from a year ago — beating Wall Street's expectations.
At the end of 2021, they acquired remaining stake in BodyArmor, making them sole owners, and with good reason, their sports drink segment grew 22% last year.
Coca-Cola released Starlight and Pixel as quirky new flavors trying to appeal to younger generation and gamers. How mid.
They’ve partnered with Molson Coors to make spiked lemonade.
As of beginning of March, they’ve exited Russian market.
Coca-Cola and other parties agreed to pay $21 million to settle lawsuits for falsely advertising their Fairlife milk came from humanely treated cows.

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TLDR: 🫠💸📈🏋️‍♀️🤖🌌🍻🍋🧑🏻‍⚖️🐄

Kraft Heinz Company:

Kraft Heinz posted total 2021 sales of $26 billion, net profit of $1 billion is an increase 184%, benefitting from 2020 divestitures.
They recently restructured, combining US/Canada to create “North American Zone”
In 2021, they divest their cheese and nut businesses.
In Brazil, they’ve completed the acquisition of Hemmer, an over 100 year old Brazilian company focused on condiments and sauces.
In Germany, acquired 85% stake in Just Spices GmbH, manufacturer of spices, blends, salad dressings and meal kits.
In Turkey, acquired Assan foods, products including tomato paste, ketchup, mayonnaise and pasta and meat sauces.
Recently has been fined for grain futures manipulation, SMH.
Investors are putting pressure to get Kraft Heinz to set new health targets.
Partnering with Not-Co to develop co-branded plant based goods.
Coherence is for suckers, Kraft Heinz has adopted unconventional mashups that help them stand out amongst a sea of “everyone is a challenger” brand
The end of an era? Kraft Heinz is exploring a paper Heinz ketchup bottle.
In this bullshit article, Kraft Heinz partnered with Microsoft to supposedly solve supply chain issues via “metaverse” aka a virtual rendering of their production facilities —K.

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TLDR: 📈💰🧀🚮🤑😤🩺🤝🚫🐄

Nestlé:

Nestlé completed acquisitions and divestments with a total value of around $10 billion in 2021.
Back in 2020, it divested its entire North American water unit.
In 2022, expecting organic sales growth around 5% and underlying trading operating profit margin between 17.0% and 17.5%.
Acquiring a majority stake in Orgain, a plant-based nutrition company that manufactures and markets powders, ready-to-drink beverages and nutrition bars.
Currently facing scrutinity in France regarding an E.coli outbreak linked to their frozen pizza that has killed two children and gotten more than 50 people sick.
The FoodGiant is slowly unwinding it’s stake in L’Oreal.
Hot Pockets, part of Nestlés portfolio, is diving into portable sandwiches.
They’ve finally wrapped up acquisition of Vital Proteins.
Nestle sees growth in plant based, it sold almost $1 Billion worth of plant based foods.
Like we said back in 2020, gut health is the new bliss, and Nestlé is investing more R&D in this space.
Also in accordance to our 2020 prediction re: “kelp is king” Nestlé has partnered up with Cordion to develop micro-algae based ingredients.
They are building a plant based plant in Serbia as they continue their commitment to these products.
They’ve recently taken a majority stake in herb and spice manufacturer Ankerkraut.
They are one of the recent backers of alt-chicken company, Sun Dial.
Two priorities going into 2022 —taste and price parity when it comes to plant based alternatives.
Innovation and premiunization is what they believe will help them fend off commoditization.

Too Long Didn’t Read?

TLDR: 🛍🤑💸💄👨🏼‍⚖️🇫🇷☠️🌯📈🌱

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Mars:

Mars, Inc. announced plans for a new, global R&D hub, costing around $40 million.
Doubling down on ecommerce, has seen triple digit growth in segment.
Have recently partnered with AI firm PIPA to accelerate discovery of new plant based ingredients.

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TLDR: 👨🏻‍🔬💸🏭💻💰💰📈

McCormick:

In 2021, McCormick saw sales increased 13% compared to 2020.
In their 22nd Annual Flavor Forecast, they list time as a luxury ingredient? LOL .
Inflation and supply chain issues have hurt their profit in Q1.
McCormick & Co. is expected to boost sales from 3% to 5% this year after reporting record growth with $6.3 billion in sales in 2021.

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TLDR: 🫶🧂📈💰💰💰💰

Mondelez

SnaxDaddy $MDZ is disvesting its chewing gum division.
Mondelez agree to $16 million penalty over wheat trading
In Mexico, Mondelez agrees to acquire Ricolino’s doubling size. ofthier Mexico business
In Europe, $MDZ completed the acquisition of Chipita Global S.A.
Mondelez says it wants to increasingly focus on chocolate and biscuits
They estimated it will take a $200m revenue hit this year following the closure of its two factories in Ukraine.

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TLDR: ✌️🍬👨🏻‍🍳🇲🇽🛒🍪🍫📈👨🏻‍⚖️💸

ConAgra Brands:

ConAgra cut its outlook for the year with inflation outpacing the price hikes they put into place.
They have increased prices on various products nearly every month over the past year
Started a $60 Million expansion to support the demand for Slim Jims.
- Expects to spend about 50% more on meat ingredients this year

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TLDR:🏭💰💰💰💰🥓🥓🥓📈

JM Smucker:

JM Smucker to build $1.1 billion Alabama manufacturing plant to support production of Smucker’s Uncrustables.
Uncrustables earned $500 million in annual net sales, experiencing double-digit every year for the past decade. They expect to grow the brand during the next five years to approximately $1 billion in annual net sales.

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TLDR: 🍞🍓🫐🥜💰📈🤑📈

Kellogg’s:

Kellogg’s plans on accelerating price increases, tho Q1 sales $3.67 Billion
Kellogg's is taking UK government to court over new rules that would prevent some cereals being prominently displayed in stores because of their high sugar content.
Net sales rose 2.4% from $3.58 billion in Q1 2021 to $3.67 billion in the quarter ending April 2, 2022.
Net income rose from $371 million to $424 million in the comparative quarters.

Too Long Didn’t Read?

TLDR: 📈🥣🧑🏻‍⚖️🇬🇧🤬

Utz:

Retail sales grew at Utz Brands, Inc. in the first quarter of fiscal 2022, surging nearly 21%.
Acquired a new snack food manufacturing plant for $38M.

Too Long Didn’t Read?

TLDR: 👍🏽

Unilever:

By end of 2021, Unilever announced it would divest its tea business for $4.5 billion.
Unilever’s food and beverage brands will no longer market to those under 16 starting in 2023.
Earlier this year they also announced they are focusing on beauty and health, alongside a round of layoffs, hinting that it may be looking to exit food and beverage in the future.