CAGNY 2022: Seven Food and Beverage Companies That Had Great 2021 Financials

March 3, 2022
Coca-Cola and PepsiCo had blowout years, and Hershey, Tyson, Mondelez, McCormick and Kellogg all did well.

Half of the presenting companies at the 2022 Consumer Analyst Group of New York (CAGNY) meeting had very good years in 2021.

Coca-Cola had a blowout year. After sales and income dipped in 2020, Coke in 2021 had its best sales year since 2016 (sales of $38.7 billion) and apparently its most profitable year ever (net income of $9.8 billion). James Quincey, chairman and CEO, said current forecasts predict 4-5% growth for overall "packaged beverages," and "sparkling beverages" (carbonated soft drinks) will not be the laggards they once were predicted to be. Quincey noted the growth came during a period of portfolio pruning, although Coca-Cola grew into new categories (like hot coffee), partnered for new niches (like energy drinks) and "experimented" with others far outside of soft drinks (like hard seltzers).

PepsiCo too, had a great 2021. Sales grew by $9 billion to $79.5 billion; net income was up $500 million to $7.6 billion. The company reorganized a bit, restructuring North American beverages; creating PepsiCo Foods North America, so Frito-Lay and Quaker are now under the same leadership; and splitting Africa, Middle East and South Asia (AMESA) from APAC (Asia Pacific, Australia, New Zealand and China). Gone are the Tropicana and Naked Juice businesses. Chairman & CEO Ramon Laguarta spent quite bit of time on Pep+ (PepsiCo Positive), "a fundamental transformation of what we do and how we do it to create growth and shared value with sustainability and human capital at the center."

At Hershey, sales were up 10% to just shy of $9 billion and net income increased 15.5% to just under $1.5 billion. The sales bump was aided by 2021 acquisitions of Lily’s Sweets in June and Dot’s Pretzels and Pretzels Inc. in December. The last two motivated the former chocolate company to create a new financial reporting segment, North America Salty Snacks, which has grown to $555 million with the past purchases of SkinnyPop and Pirate's Booty. Chairman & CEO Michele Buck said the company added seven manufacturing lines in the past year.

Tyson Foods plans to build on its already healthy operating margins and bottom line. “We expect volume growth and strong profitability across the board,” said CFO Stewart Glendinning. The company is seeing sales growth and improved margins across all of the proteins it processes, including plant-based alternative proteins, Glendinning said. Sales in FY 2021 (the company's fiscal year ended Oct. 2) were up nearly $4 billion, to $47 billion, and net income increased nearly $1 billion, to $3.06 billion.

Mondelez sales grew 8% last year to $28.72 billion, and net income was up 21% to $4.3 billion. Dirk Van de Put curiously said nothing about the North American business, quickly putting the focus on the company's Asia/Middle East/Africa reporting segment. The Chairman & CEO said he was "excited by the long-term prospects there" because the region is "a powerful growth engine." That remains to be seen: the region in 2021 accounted for 22.5% of sales and 22% of operating income ($1.054 billion). Other execs spoke to prospects in India and China.

McCormick added $700 million in sales in its FY 2021, which ended Nov. 30, 2021, and increased net income by 8% to $824 million. Small wonder when "72% of people are cooking more at home and 50% from scratch," according to Chairman/CEO Lawrence Kurzius. Small wonder, too, when the company made two big 2020 year-end acquisitions: Cholula Hot Sauce and Flavors of North America (aka FONA). The company claims the No. 1 (Frank's Red Hot) and No. 2 (Cholula) hot sauces, which Kurzius predicts will be "the condiment of the next generation." In addition to strong consumer sales, the company's Flavor Solutions Segment, which sells ingredients to other food processors, is growing well, too, buoyed by that FONA acquisition.

Back to Kellogg, which we mention in part 1 of our CAGNY series, Both sales ($14.2 billion) and net income ($1.43 billion) inched up in 2021. "Facing significant cost inflation, worldwide bottlenecks and shortages, and even a labor strike at all of our U.S. cereal facilities in the fourth quarter, the team executed with agility to deliver another year of on-guidance results," Cahillane said. Kellogg predicts organic net sales growth of 3% in 2022, with operating profit up 1-2%.

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