2020 Year End Survey Results Summary

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First, thank you to the 16 brands that responded to the survey.  Your input was highly valuable and helpful, and I am taking your feedback into consideration as we plan our 2021 calendar.

Background

Food’NBev Connect asked its brand members in January to share proprietary data about their revenues, hiring, distribution and expansion plans (SKU growth) for the 2020 – 2021 period.  We have aggregated the data to develop a snapshot of portfolio performance and an indicator of group success.

With 2020 being the pandemic year, the survey was geared to provide some insight into how deeply our brands were impacted, how we fared as a group and how we did vs. the market overall. We also wanted to gauge how you are feeling about the new year of 2021 and prospects for returning to more “normal” growth.  I used the data from this year’s survey and compared and contrasted it to the responses to similar questions at the end of 2019 to get some further information on impact by type of product/category and on trends overall.

There is considerable noise in the broader data about the market overall, but anecdotal information and some survey and news reports indicate that emerging brands in particular faced many marketing, production and distribution challenges as the pandemic hit and that overall growth was minimal to flat in the overall space across food and beverage brands in this segment.  Many faced raw material shortages, were shut out of distributors for a while, focused on restaurant or food service channels, or had increasing costs to address covid in general.  This led many to sales declines and layoffs.  Other brands, mostly those who had direct control over production or logistics, or those mostly focused on digital channels and DTC models, seemed to do well and increase sales during the pandemic.  For those who had to develop new channels and DTC capabilities, it took some time for the pivot to take hold, and many didn’t make up ground sufficiently to drive growth in the period.

Summary and Key Findings

Here are some top line results based on the aggregate information:

  • As a portfolio, we did experience overall revenue growth, though it certainly slowed from prior year – +4% (2020 v. 2019) vs. prior year of +19% (2019 v. 2018).  I consider this an overall victory for the portfolio, though obviously, individual company performance was highly varied.
    • Results here varied across brands from a low of – 45% to a top gain of over +29% (excluding our largest brands and new to market brands in 2020).  Overall, five brands saw declines, 2 were flat and 8 brands saw growth.
    • Beverages overall showed growth, but we excluded Rise (non-respondent), so total number is for only a portion of the portfolio and several of the brands were new to market in 2020.
    • Snacks and seasonings had mixed results with four brands up vs. prior year and 4 brands down
    • Frozen and dairy products were flat across the portfolio
  • Brands expect to add staff over the 2-year period (2020 – 2021) and increase full-time staff by 50% and part-time roles by 35% — most growth being planned for 2021
    • Avg. revenue per employee was approx. $ 22,700 in 2020 with expectation to grow to over $ 50,000 in 2021 as new brands start to mature.
  • Digital has clearly become more prevalent in terms of distribution importance for our brands.  On-line sales of all types now drive approx. 35% of all sales revenue, up from 20% in 2019.  This trend is expected to continue in 2021, though hard to dimension overall growth
  • Even as digital is growing in importance, store growth is very important to our brands.  While store counts grew slightly in 2020, brands are expecting to add over 1,000 aggregate new store distribution sites in 2021, or over 50% growth from 2020.
  • In terms of areas for future assistance and workshops or expanded contacts, four areas were clearly emphasized:
    • Social and digital marketing
    • How to gain more store distribution and address sampling issues
    • How to better leverage PR
    • More information about funding options and introductions to possible funding sources

Note:  We have just added a new advisor who has a strong PR background and I am talking to several new social and ecom/digital marketing specialists who work with smaller, emerging brands…stay tuned as I keep investigating.

Let me know if you have any comments or questions.

All the best and stay safe!

Gary