Business report 2020: Consumer Foods

Due to the countermeasures taken to contain the pandemic, the business development within segment was very diverse. The majority of our customers saw solid volumes in product segments addressing home consumption and conventional mainstream products, for example in crackers, tablet chocolates, mainstream biscuits, and family size packages. By contrast, gifting, and seasonal related product categories, which are often distributed through flagship stores and airport shopping, experienced a sharp decline if not a standstill.

Consumer buying behavior has also changed with a reduction in spontaneous purchases in supermarkets, such as confectionery products on display in cashier areas and products for immediate consumption, such as ice-cream. The snacking segment is also affected by an increased number of people working from home.

The fact that schools and universities were closed in many parts of the world led to a swift decline from point of sales snacks partly serving as meal replaces, such as cereal, nut, and protein bars towards more traditional and mainstream snack products, including chips and tortillas. Although some segments showed even stronger volume growth compared to the previous year, it was particularly the missing volume in the premium and high margin categories which lead to a much stronger impact on our customer’s profitability. Also, many of those players that were able to increase their sales volume could not show this increase in their bottom line.

Consequently, Consumer Foods faced a diverse market environment in which smaller projects have been stopped or shifted, whereas producers were continuing with bigger projects for their strategic long-term initiatives. However, these larger projects could not compensate for the shortfall in the small- to midsize business.

One highlight for CF was the continued buildup of a food complex in Egypt for the customer NSPO – globally one of the largest food plants ever built. The government owned NSPO is investing into this project to improve nutrition for children and students in the Upper Nile region. The state-of-the art food complex includes bakery, wafer, biscuits, confectionery, chocolate, pasta, and milling solutions. This order confirms our positioning as a true solution provider to our industries. The first lines are already in installation and start of production is planned to begin in 2021. The whole food complex will be completed by 2022. The NSPO project will change the food system in Egypt, providing more safe and secure nutrition, especially for children and young people.