Last year when the global pandemic hit, consumers had to change their behavior, and they started to look at things to eat with a more critical eye. Furthermore, people had to consider their health, wallets, and well-being. Due to this, some food and drink companies lost sales during the tough and complex time. This article reveals some of the companies that saw their financial fortune fall last year and why.
Why beverage Companies lost sales
Last year the Coca-Cola company closed its books on what they termed one of the toughest financial years in Coca-Cola history. The companies’ sales were down 28%, which is more than $2 billion off when compared to 2019. Coca-Cola saw a 22% decline in concentrates sales, which generally is for businesses that serve its beverages in soda fountains. This greatly contributed to the company`s cratering sales. Additionally, with leisure activities, destinations, and dining rooms shut down due to the pandemic, there was less demand for the concentrate.
Experts believe that companies such as Coca-Cola suffered sales declines because they relied on already-troubled categories. The Coca-Cola beverage has been in a steep decline for decades now. While the company has a strong nonalcoholic beverage portfolio, its reliance on a single type of product is proving to be a liability. When the pandemic hit and people had to sit at home, some started to work out a little bit more. Others, on the other hand, started adding a little bit too many pounds, and they thought they had to stop drinking Coca-Cola. Only beverage companies that broadened their company`s portfolio beyond soda didn`t suffer the magnitude of declining sales.
Other companies that saw a fall in Financial Fortunes
Coca-Cola was, however, not the only company that saw a fall in its financial fortunes last year. Companies that also primarily sell alcoholic beverages and meat also had sales that were more opposite of the general trends. The pandemic forces cut short the growth of companies that focus solely on meat. Meat manufacturers struggled to meet escalating demand for meat products when the pandemic hit. Because such companies depend on hired workers for the labor, the meatpacking plants became COVID-19 hotspots. Several plants had to temporarily shut down for reconfiguring, cleaning, and allowing sick workers a chance to recover. As a result, many of these factories got behind on processing, causing shortages at grocery stores.
With meat departments having empty shelves due to the pandemic, Many consumers picked up more plant-based meat. Last year plant-based meat sales were worth $7 billion with a 27% growth rate compared to 2019. For a company like Tyson, which has a core business in the meat industry, its overall sales dropped nearly 8% compared to 2019. Tyson sold less of all of the meat it produces as well as prepared foods. The reason behind these declines, they believed were less food service demand and processing backups.
Stuck in the middle
Some other businesses lost sales of their products because they were simply stuck in the middle where they neither value nor add value. When the pandemic hit, many consumers trapped at home saw food and drink as a sort of escape. This shaped the fortunes of some categories providing food and drink. Most consumers who were used to going to restaurants to eat stayed at home and redeployed their money elsewhere. Some of these individuals chose to buy high-end alcohol quality food ingredients and expensive bread to eat at home. A product like frozen dough, for instance, sold out as people wanted to make their own pizzas instead of buying ready-made pizza frozen pizza.
Other companies saw large slumps as their products need on-the-go consumers, but when these consumers became homebound, sales slowed down. One of the products that saw a large drop in sales was the performance nutrition bar category. The company found it hard to make their products relevant as many people were working at home and spending more time at home.
Breath mints and gum also saw stagnating sales when people had to stay at home and often had their mouths covered by masks.
More:
