Food & beverage public market update: 2020 recap
The food & beverage industry was negatively impacted by Covid-19 beginning in early March 2020 with dramatic declines in both the equity and M&A markets
As shown in the charts below, the decline in the equity markets for certain subsectors quickly recovered by June 2020 with strong performance by retail grocery focused food manufacturers and fast casual and quick service restaurant chains which benefitted from drive-through and online capabilities
Since June 2020, the distribution industry, primarily foodservice, and the premium restaurant sector have witnessed a significant recovery as economies began to reopen and the vaccine became more of a reality. We expect continued strong performance in the restaurant sector overall driven by pent-up consumer demand
Equity market trends - Food & beverage
1/1/20 - 6/30/20
7/1/20 - 12/31/20
Equity market trends - Restaurants
1/1/20 - 6/30/20
7/1/20 - 12/31/20
Produce consumption in the U.S.
Strong underlying trends towards healthy eating and sustainability practices are expected to boost U.S. fruit and vegetable consumption in the future.
The year 2020 was like no other. Beginning in March, businesses across all industries had to deal with the impact of Covid-19: customer disruptions, supply chain and logistical issues, and employee health & safety challenges, all within the “stay-at-home” environment. The produce supply chain similarly underwent critical disruptions in 2020. The immediate shutdown of restaurants and other foodservice channels in conjunction with a spike in retail demand forced all industry players to be more agile. Growers and suppliers to foodservice chains had to find immediate alternative buyers for their produce, with many shifting to retail and direct-to-consumer models
While consumer interest for healthier based diets has been increasing in recent years, Covid-19 and its impact on people’s health accelerated the shift and pushed consumers to pay attention to the types of foods they consume and how these foods affect their long-term health. Consumers are focusing more on products with perceived benefits from antioxidants, vitamins, and minerals thought to boost health systems and longevity. Superfoods such as berries and avocadoes have witnessed strong growth during Covid-19 due to their nutrient dense health claims. As illustrated in the chart below, consumer eating and shopping habits created by the pandemic drove double digit growth across the produce space
2020 % Dollar Growth vs. 2019
Significant Upside Potential to Produce Consumption in the U.S.
Even though consumers interest in healthier diets has historically increased, current consumption patterns still show fruit and vegetable deficiencies in the American diet. The under-representation of fruits and vegetables offers the produce industry an opportunity to further penetrate consumer meals through marketing strategies focusing on health and raising awareness about the nutritional benefits of produce consumption
Only 10% of Americans consume the recommended daily amount of fruits and vegetables.
- Centers for Disease Control and Prevention
Consumers are Shifting from Animal Protein to Plant-Based Diets 1
(% of respondents)
The produce industry is expected to play a vital role in establishing a global food system that can feed the growing global population in a sustainable and healthy way. The EAT-Lancet report suggests consumption of fruit and vegetables has to double by 2050 to ensure human health and environmental sustainability and protecting the planet for future generations
1Beyond Meat Initiating Coverage Report, Jefferies (May 28, 2019).
Sources: USDA, Economic Research Service – based on data from various sources as documented on the Food Availability Data System home page. Data last updated April 1, 2020; IBISWorld, Fruit & Vegetable Markets in the US (June 2020); Credit Suisse, Beyond the Pandemic (July 15, 2020); Health.gov, Dietary Guidelines 2015 – 2020; IBISWorld, Fruit & Vegetable Wholesaling in the US (December 2020); Fruit Logistica Trend Report 2020.