2021 CAGNY Report Day 2: A More Calculated Approach to Growth
Day 2 of the 2021 Virtual Consumer Analysts Group of New York (CAGNY) Conference had a slightly different tone than Day 1’s optimism. Presentations by the executives of Kellogg Co., J.M. Smucker, PepsiCo, and Hershey all seemed to have a consistent message about calculated growth in 2021.
"Our balance sheet is stronger," says Steve Cahillane, Chairman and Chief Executive Officer of Kellogg Company, who led off the second day of the annual event.
Earlier in the month, the company had announced its 2020 results and financial outlook for 2021. In that call, the Michigan-based cereal-maker says it finished the year with results that were 'on or better than its guidance.'
Year-end reports for 2020 showed net sales coming in at $13,770 million, up 1.4% over 2019. In 2021, the company is expecting an annual growth of 2.5%
During the presentation, senior leadership focused on the how agility and a strong focus on data and analytics have helped the company navigate the choppy COVID waters. Though the company did not introduce new products in 2021, they did ensure the 2021 pipline was ‘full and ready.’
Also touting an “agile, lean, and focused” strategy was the J.M. Smucker Co. The company, which posted its second quarter FY2021 results in November, has seen a 4% sales increase ($76.2 million), which is reflective of its consumer foods and retail coffee segments. Year-end totals showed the company brought in $7.3 billion in sales in 2020. Of that $7.3 billion, $2.6 billion came from pet food sales while $2.1 came from coffee sales, and $1.5 billion for consumer food sales.
Building on last year’s conference report, the company’s superstar in the consumer portfolio, Uncrustables, has seen continued growth, having done $365 million in sales in 2020. Staying in line with its other CPG competitors, J.M. Smucker Co. plans to reduce its SKUs by 30% in 2021, accounting for 3% of its sales.
PepsiCo CFO Hugh Johnston reported on the snack and beverage giant’s past, present, and post-pandemic plans. With 23 brands each generating more than $1 billion each in annual retail sales in 2020, this Food Processing Top 100 mainstay saw $70.4 billion in net revenue in 2020, up from $67 billion in 2019.
Having delivered consistent organic growth for the last eight years, the company looks to stay on target, projecting 4-6% growth going forward. To reach those targets, PepsiCo is anticipating 9% growth in its beverage category and 7% growth in snacks. With $10,585 million invested in merger and acquisition activity 2018-2020, Johnston indicated the company would be prioritizing capital investments for growth and productivity initiatives in 2021.
“Operating from a position of strength,” is how Hershey CEO Michele Buck described the confectionery manufacturer. Consolidated net sales of $2,185.2 million in 2020 gave the company an increase of 5.7% over 2019.
Holding the top spot for confection in the U.S., Buck indicated the company is exploring additional opportunities in the snack and better-for-you categories, with new product introductions planned in the permissible indulgence segment.
While Hershey gained more household penetration because of the coronavirus pandemic, the company expects 2021 performance to be in line with its long-term growth algorithm of 2-4% net sales growth.
