GCG’s September 2020 Food & Beverage Pulse provides an overview on recent news topics and trends within the Food & Beverage sector.

Key findings include the following:

• • COVID-19’s impact on how consumers perceive ‘clean’. The COVID-19 pandemic is fueling the demand for cleaner, healthier food options among consumers. As consumers explore their food options, clean and clear labels are a vital part of influencing their purchasing behavior. The “natural” label claim specifically remains the most influential product claim when purchasing food prepared outside the home. Consumers are also stocking up on frozen products, particularly frozen fruits and vegetables due to fewer trips to the grocery store.

• • Online could make up 6.4% of total grocery sales by 2021. Rabobank International forecasts online grocery sales, spurred by consumer stay-at-home habits during the pandemic, to reach 6.4% of total grocery sales by the end of 2021. Without COVID-19, online grocery store sales were forecasted to have made up 4.6% of sales by the end of 2021. Rabobank’s model suggests that there has been a 12 to 18-month acceleration in online grocery penetration compared to a scenario in which the pandemic never occurred.

• • Hint raises $25 million in funding. Flavored water brand, Hint, Inc. has closed a $25 million Series D financing round led by Springboard Growth Capital. Hint water is available in more than 30,000 retail outlets nationwide and is growing eight times faster than the premium still water segment overall, with retail sales growth surpassing 80% in the past 52 weeks. Hint plans to use the latest funding to fuel its continued growth online and in retail stores.

• • Investors pour $200 million into Oatly. Oatly, the popular Swedish oat milk brand, has received $200 million from a Blackstone-led, star-studded investment group that included Oprah Winfrey, Natalie Portman, Jay-Z and former Starbucks CEO Howard Schultz. This equity investment represents a 10% share of the company and will go towards expanding production and distribution capabilities in Europe, the United States and Asia.

• • Dunkin’ US to close as many as 800 locations. Dunkin’ is permanently closing 8% of its United States locations, which amounts to roughly 800 restaurants. Dunkin’ described the closures as “real estate portfolio rationalization” and said the affected locations are in “low-volume sales locations” that only represent 2% of its US sales as of 2019. Dunkin’ also said approximately 350 locations “may permanently close” outside of the US.

• • Immunity boosting wellness shot maker secures $13 million investment. Functional beverage brand Vive Organic has raised $13 million in a Series B funding round led by Monogram Capital. Founded in 2015, Vive produces ‘wellness’ shots which claim to have immunity-boosting benefits. Vive plans to use this capital to increase its digital footprint, foster its innovation pipeline and make its plant-based merchandise more accessible to customers nationwide.

• • Less is more: Why retailers and CPGs are moving toward selling fewer products. As the coronavirus pushes some items off supermarket shelves, the food industry is finding a smaller selection reduces consumer confusion, boosts sales and trims expenses for grocers. Analysts who follow the food and grocery space say not only are product categories overloaded with multiple brands, product sizes, flavors or other attributes – making them ripe for a pullback to begin with – but retailers are planning to cut back on less profitable or slower-selling items in an effort to bolster their own profitability once the retail environment becomes more predictable.

• • Impossible Foods closes $200M funding round. Plant-based burger maker Impossible Foods has secured $200 million in funding, less than six months after it raised the largest investment ever for a food tech startup, bringing total funds raised since its founding in 2011 to $1.5 billion. The company says it will use the money to expand research, develop new products and for internal operations.

See here for all Food & Beverage News and Updates

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