— This is the script of CNBC's news report for China's CCTV on July 14, 2020, Tuesday.
Although the epidemic has hit many industries, some have benefited from it. The snack food industry can be said to have benefited a lot. The latest financial report of the global food giant Pepsi proves that.
In the second quarter of this year, the epidemic generally put a negative pressure on PepsiCo's business, resulting in a 3% drop in total revenue, Pepsi's food brands, however, posted significant gains, which helped offset a 3 percent decline in soft drinks. Sales of Quaker Foods, which makes breakfast cereals, rose 23% in North America, Frito-Lay, which makes and sells crisps and snacks, grew 7 per cent. The uptrend in snack sales has been on the rise since the outbreak began, with Mondelez, which owns brands such as Oreo, reporting sales growth of nearly 30 percent in the initial phase of the epidemic earlier this year. In a study released in May, FMCG Gurus surveyed consumers in 18 countries around the world and found that 38% said they were buying more chocolate and 36% said they were buying more candy.
Although consumers have become more concerned about the health of food during the epidemic, they are still willing to buy some non-essential casual snacks to find psychological comfort. In addition, the way of working at home also increases consumers' demand for snacks. But is this trend sustainable? It remains to be seen.
For one thing, taking too much snacks has triggered alarm, now, there's a lot of discussion about how to give up snacks or choose healthier snacks when you work from home. In addition, the risk of recession has made people more cautious about spending. The American snack report released by Freedonia Focus Reports in June predicts that the growth of snack sales may decline from the early stage of the epidemic. It is expected that the annual growth rate will be 2.7% by 2024.
Food giants like PepsiCo may still have to rely on control of the epidemic to return to growth. The company's latest financial results show that the company's performance and the recovery of the epidemic has a relatively obvious positive correlation.
Its organic growth in China was 30% in the second quarter and 18% in Germany, significantly higher than other markets.
Hugh Johnston
PEPSI CFO
We do clearly as people tend to get out of it more You certainly see movement into into the channels that are more like restaurants and convenience stores and things like that. Overall, we we we feel like we can manage it well, but clearly, mobility helps our business quite a bit.
We will continue to pay attention to the development of the food industry