Food Brands Industry Overview
Food brands, combined with beverages, were a $66 billion market in 2021, representing 44% of all consumer packaged goods sales in the United States. Food and Beverage is now the largest CPG segment, having surpassed health and beauty for the first time this past year.
The Food Brand Category
Subcategories of food brands include: Baked Goods, Baking Products, Baby & Kid Food, Bars, Breakfast & Cereal, Candy, Chips, Chocolate, Condiments & Sauces, Cookies & Desserts, Dairy, Dairy Alternatives, Egg products, Herbs & Spices, Ice Cream & Novelties, Meat, Meat & Seafood Alternatives, Meat Snacks & Jerky, Nuts & Trail Mix, Oil & Vinegar, Packaged & Prepared Food, Pasta & Noodles, Pickles & Fermented Toppings, Popcorn, Pretzels, Produce, Puffs, Seafood, Spreads & Dips, Sweeteners & Syrups, and Vitamins & Supplements.
Food Brands’ Overlap with FMCG
Many food brands fall into a subcategory of consumer packaged goods known as “Fast Moving Consumer Goods”, or FMCG. These are items that might have a short life on shelves, such as milk or gum. Examples of items that are not packaged food, but are FMCG are toilet paper, toothpaste, or cleaning supplies.
Large Food Brand Conglomerates
The largest conglomerates behind the packaged food brands that dominate the U.S. market include:
Nestle, which owns packaged food brands including Cheerios, Gerber, Dreyer’s, and Lean Cuisine, and had food sales in 2020 totalling $67,708,000,000.
Tyson Foods, which owns packaged foods brands including Aidell’s, Sara Lee, and Gallo Salame, and had food sales in 2020 totalling $43,185,000,000.
Mars, which owns packaged food brands including Ben’s Original, Suzi Wan, and Tasty Bite, and had $37,000,000,000 in food sales in 2020.
Mondelez International, which owns packaged food brands including Original Philadelphia, Ritz, and Triscuit, and had $26,581,000,000 in food sales in 2020.
Kraft-Heinz, which owns packaged food brands including Oscar Meyer, Velveeta, and Lunchables, and had $26,185,000,000 in sales in 2020.
Hershey, which in addition to its eponymous chocolate brand, also owns packaged food brands including Twizzlers, Reese’s, Skinny Pop, and Pirate Booty, and had food sales in 2020 totaling $8,150,000,000.
Emerging Food Brands
Emerging food brands are also a relevant segment of the space to watch in order to understand consumer trends, as well as industry growth and innovation. According to Helio’s universal brandview data, as of May 2, 2022 the following packaged and prepared food brands are some of those with the highest potential for growth:
Wicked Kitchen, which produces plant-based protein products and is in the $1-5M revenue range, saw 44% year-over-year door growth, a 106% increase in social visitors, and a more than 852% increase in online visitors per month.
Kevin’s Natural Foods, which seeks to empower busy people to eat clean without sacrificing flavor and is in the >$50M revenue range, saw a 72% increase in retail doors year-over-year, a 140% increase in social followers, and a 122% increase in online visitors per month.
Herban Fresh, which makes small kettle batches of chef-inspired soup from premium ingredients and is in the $1-5M revenue range, saw a 212% increase in doors year-over-year, a 158% increase in social followers, and a 175% increase in reviews.
8 Myles, which makes home-style macaroni and cheese and is in the $200K-$500K revenue range, saw a 131% increase in retail doors year-over-year and a 26% increase in online reviews.
Lily’s Toaster Grills, which makes frozen grilled cheese sandwiches that you can prepare in your toaster, mess free and is in the $1-5M revenue range, saw a 245% increase in retail doors year-over-year, and a 914% increase in online visitors per month.
The Broader Food Brand Ecosystem
From the investors who help capitalize food brands, to the brokers, co-packers, and consultants who help get products ready to market, to the retailers who sell them, the packaged food ecosystem is complex and crowded.
Food Brand Investors
Active investors in the packaged food category of CPG include venture capital funds such as Accel Foods, Blueberry Ventures, Boulder Food Group, Brand Foundry Ventures, Lerer Hippeau, and Sonoma Brands, as well as investment banks including Whipstitch Capital, Consensus, Lincoln International, Arlington Capital Advisors, and Raymond James.
Food Brand Retailers
Some of the largest food brand retailers in the United States include:
Walmart, both a big box discount and local grocery chain, with a market cap of $408.44 billion.
Costco, a chain of membership-only warehouse clubs that sell groceries, frozen goods, clothing, and electronics, with a market cap of $157.32 billion.
7-Eleven, a chain of convenience stores, with a market cap of $34.231 billion.
Kroger, a grocery supermarket chain with a market cap of $25.24 billion.
Aldi, a chain of discount supermarket stores, market cap unavailable.
Smaller retailers noteworthy for discovering and driving awareness of emerging food brands include; Whole Foods, Sprouts, and LA-based Erewhon.
Food Brand Brokers
Top CPG brokers who work with food brands to get them carried by retailers include: Acosta, Crossmark, and Presence Marketing. Rooted Food & Sales, Dirty Hands LLC, Green Spoon Sales, Waypoint, and Basemakers work exclusively or primarily with food brands and beverage brands.
Ingredients Companies Serving Food Brands
Ingredients companies distribute, formulate, and produce the raw ingredients and custom blends that are key to making the products that food brands sell. Top ingredients companies in the space include Tate & Lyle, Firmenich, Ventura Foods, Schreiber Foods, Ingredion Incorporated, and ADM.
Co-Packers Serving Food Brands
Top co-packers helping food brands produce and package their products include Discover FreshFoods, Daily Manufacturing, Pure Bliss Organics, Hollingsworth, Doug Jeffords, and St Clair Foods.
Food Brand Consultants, Directories, and Other Services
Other players in the ecosystem include Rodeo CPG consultants, Advantage, a full service agency, and Startup CPG media, who work with many CPG brands, including Food Brands. Foodbevy, a directory and network and Sherpa CPG, a consultancy, and Kitchentown, a research and testing consultancy, work specifically with food and beverage brands.
Trends Impacting Food Brands
Food is a major part of both our culture and economy, and as such, headline news, macro economics, the environment, and societal trends all can have a major impact on packaged food brands.
Food Brands and Inflation
One current in news about food brands is the potential impact that inflation will have on consumers, brands, and retailers alike. Data from the U.S.D.A. indicates that from 2017 to 2021, the Consumer Price Index for all foods rose 11.1%, which is higher than the overall Consumer Price Index, and just behind increases in transportation costs, which play a role in higher food costs. In particular, 2020 and 2021 were years of high food price inflation due to shifts in consumption patterns and supply chain disruptions resulting from COVID-19. But according to Just Food’s columnist Victor Martino, despite inflation being at the highest levels since 1981, consumers in the United States are not decreasing their consumption of packaged food items in grocery stores. Some experts speculate that with the pandemic keeping consumers at home more, they are simply not willing to compromise on the small comforts available to them. However, while consumption remains high, it does not mean that consumer behavior has not been in flux.
“Healthier for you” Food Brands
After several years of eating comfort food at home, consumers are now looking to make the shift to “preventative eating” that supports their wellness goals. In a recent survey, 80% of consumers worldwide said they were planning to eat and drink more healthily in 2021 as a direct result of COVID-19. Specific product attributes and categories in which they expressed interest included mushroom coffee, algae capsules, bone broth, and meat-free products.
COVID-19 Moves More Food Brands Online
Another impact of COVID-19 on the ecosystem was more food brands being sold online. “Click-and-collect”, experienced a 113% increase in user growth, while Instacart saw a 17% increase in merchants on its platform, and had $15.7 billion in sales overall. Additional retailers disrupting the space include Gopuff, Gorillas, and Foxtrot.
Recent Foods Brands Exits
The largest recent food brand exits predominantly represent large packaged food conglomerates looking to gain exposure to the “healthier for you” and “preventative eating” space. Notable exits include:
Mondelēz’s acquisition of Hu Chocolate for $361 Million with an estimated post close valuation of $388.17 Million.
Hershey’s acquisition of low-sugar chocolate manufacturer, Lily’s Sweets with a $450 Million estimated deal size and post-close valuation of $423.19.
L Catterton’s acquisition Of Kodiak Cakes, which offers a line of premium breakfast items including flapjack waffles, granola muffins, oatmeal, and brownie mixes using whole grains that are free from preservatives, GMOS, and artificial additives, with an estimated deal size between $500 Million And $750 Million and an undisclosed post-close valuation.
Learn more about Helio data on food brands