Under growing scrutiny, packaged food leaders were focused on elevating their offering to fend off competition from private label and new brands with strong nutritional and ethical profiles. Yet the COVID-19 outbreak disrupted this state of play globally. Companies such as Nestlé, Unilever and Kraft should benefit from consumers’ return to familiar brands and shelf stable and frozen staples. In addition, e-commerce has become vital in many markets, and direct-to-consumer offers potential.
This report comes in PPT.
As global sales of packaged food expanded by 2% in 2019, its 10 largest companies all saw value growth. The leaders are having to elevate their own proposition against an increasingly premium private label offering and new disruptive brands. Yet the global coronavirus (COVID-19) outbreak should favour leading players, as consumers retrench to known brands.
Consumers’ increasing snacking behaviour, which has eroded mealtimes, has contributed to the packaged food hierarchy being dominated by snacks players. The coronavirus-related lockdowns hit out-of-home eating, but as economic conditions toughen, snacks leaders such as PepsiCo, Mars and Mondelez could do well. They will, however, face more competition from private label in mature markets.
PepsiCo stands out among the leaders, benefiting from unique momentum in savoury snacks. Nestlé and Unilever, whose relative shares are receding, need to further refine their scope of operations and cement their new nutrition-focused identities. Kraft, in an even tougher position, needs to bolster the presence of its power brands outside of North America.
The COVID-19 health crisis should weaken the premiumisation trend and render more affordable treats attractive; yet the desire for ‘healthier’ treats will remain important. Against Ferrero’s acquisition spree and Mondelez’s sustainability push, Mars needs to take a bolder approach to growth, involving channel development.
In the dairy aisle, Danone seems well-placed to be one of the biggest benefactors of the rise in plant-based alternatives. Yet the group needs to futureproof some of its core yoghurt brands. Mergers and acquisitions will be a major aspect of company expansion in dairy; this will propel Lactalis further, but also enable Asian dairy groups such as Yili and Mengniu to enter the international scene.
In packaged food we consider two aspects of food sales: 1) Retail sales. 2) Foodservice. Retail sales is defined as sales through establishments primarily engaged in the sale of fresh, packaged and prepared foods for home preparation and consumption. This excludes hotels, restaurant, cafés, duty free sales and institutional sales (canteens, prisons/jails, hospitals, army, etc). Our retail definition EXCLUDES the purchase of food products from foodservice outlets for consumption off-premises, eg impulse confectionery bought from counters of cafés/bars. This falls under foodservice sales. For foodservice, we capture all sales to foodservice outlets, regardless of whether the products are eventually consumed on-premise or off-premise. Foodservice sales is defined as sales to consumer foodservice outlets that serve the general public in a non-captive environment. Outlets include cafés/bars, FSR (full-service restaurants), fast food, 100% home delivery/takeaway, self-service cafeterias and street stalls/kiosks. Sales to semicaptive foodservice outlets are also included. This describes outlets located in leisure, travel and retail environments. 1) Retail refers to units located in retail outlets such as department stores, shopping malls, shopping centres, super/hypermarkets etc. 2) Leisure refers to units located in leisure establishments such as museums, health clubs, cinemas, theatres, theme parks and sports stadiums. 3) Travel refers to units located in based in airports, rail stations, coach stations, motorway service stations offering gas facilities etc. Beyond the scope of the foodservice research are captive foodservice units that serve captive populations around institutions such as hospitals, schools, and prisons. This is also known as institutional sales.
See All of Our DefinitionsIf you purchase a report that is updated in the next 60 days, we will send you the new edition and data extraction Free!