Apologies for ending that headline with a question mark, but the data is inconclusive. Nevertheless, 54 of the 100 largest food and beverage processors in the U.S. and Canada improved their sales in 2017, and only 19 suffered another year of sales declines. On the other hand, the 10 largest companies showed an even split. Five saw improved sales, five saw declines, an indication that it’s tough being big.
Profitability is up, too – significantly – but much of that improvement may be due to last year’s business tax break. More on that later.
That’s been the story behind these Top 100© lists of ours the past few years. Big Food seems to have hit a wall back in 2014, with most of the marquee companies suffering through annual sales declines since. Where did the sales go? To the smaller the companies, although even the bottom company on our list, Monogram Foods, is no midget at $566 million in sales.
No, the sales are going to the really small ones, the entrepreneurial upstarts with sales in the $1 million-$50 million range. With names like Enjoy Life Foods, Angie’s Boomchickapop, Beyond Meat. Individually, they’re mosquitoes, but collectively they sucked millions, maybe a billion or more, out of the sales of Big Food. And now Big Food is buying or investing in them.
First, an explanation of how we calculate those numbers in the first column (which you can see in our interactive chart). We rank companies based on value-added/consumer-ready (but not necessarily branded or in final form) foods and beverages that were manufactured in U.S. and Canadian plants. That’s why PepsiCo’s figure is $39 billion, not $63.5 billion (its global sales). Cargill appears as a $9 billion meat packer, not a $110 billion owner of ships and trains around the globe. ADM is not on the list at all. Neither is Monster Beverage Corp. – even at nearly $3 billion in sales, the company manufactures none of its own beverages; all are done by copackers.
And that’s what makes this list unique … and, we think, a fair comparison of companies as food and beverage manufacturers in the U.S. and Canada.
The biggest sales increase on our table belongs to Danone North America, its $6 billion in 2017 sales were nearly triple the $2.1 billion we recorded for the company in 2016. But this is a far different company. The French parent’s 2017 acquisition of WhiteWave Foods, with sales twice the size of the former Dannon North America, moved the new entity 30 spots up the list.
“With WhiteWave, we have found a perfect match to build a global leader leveraging consumer trends and expectations for healthier and more sustainable eating and drinking choices,” Danone SA wrote in its annual report. “The former Danone Dairy and WhiteWave activities in North America have been combined into a new subsidiary that has been incorporated as a Public Benefit Corporation, and is now the largest company of this type in the world. In the U.S., this entity is one of the top 15 food and beverages companies [No. 24 by our count] and the largest refrigerated dairy company, excluding cheese.”
The USA, by the way, is now the French company’s biggest market. (For an explanation of public benefit corporations, see Power Lunch: Growing Interest in Public Benefit Corporations).
Also due to a big acquisition, Molson Coors Brewing Co. recorded a 66 percent increase over its 2016 sales. But back then, its sales represented only the Canadian and export sales of primarily Molson brands. U.S. sales were tied up in the Miller-Coors joint venture, which was reported as a separate company. When Anheuser Busch InBev in 2016 bought SAB Miller, the Miller business had to be sold off (“less filling”).
JBS USA saw a $5 billion bump in its 2017 sales. In addition to good organic growth, the meat company acquired Plumrose, which makes bacon, ham and other processed meat products from five case-ready food plants and two distribution centers in the U.S. In 2017, the Brazilian parent firm celebrated 10 years since its entry into the U.S. market via the purchase of Swift & Co.
Pilgrim’s Pride, which is majority-owned by JBS (but which reports its financials separately) acquired GNP Co. (dba Gold ’n Plump) in the U.S., as well as Moy Park, the largest privately held company in Northern Ireland. That accounts for its 8 percent sales increase.