Three takeaways from the food & bev world in 2022

Spoiler alert: They’re almost all related to inflation.
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4 min read

2022 was an ~interesting~ year for the food and beverage industry. In addition to a slew of shortages, TikTokers convinced us to mix LaCroix and balsamic vinegar, and then Lindsay Lohan tried to get us to add milk to our Pepsi.

A few slightly more impactful things happened this year, too, so we rounded up the major trends we saw in the industry throughout the year. (It will come as a surprise to no one that they were mostly byproducts of inflation.)

How the labels have turned

Private-label food products had a banner year as US consumers sought cheaper alternatives to reduce their grocery bills.

“One of the top things we’ve been asking for over a year now is how consumers are adjusting, trying to save on groceries,” Emily Moquin, food and beverage analyst at Morning Consult, told us. “And one of the top things consistently over time that people have said is that they’re buying more private-label store brands to save costs.”

  • According to a November Morning Consult survey, 81% of consumers said they opted for store brands to save $$.
  • Private label had such a big year that a product from Walmart’s owned brand, Great Value, made the Morning Consult’s Fastest Growing Brands 2022 list, with its cream cheese landing at No. 8.

This year, Thrive Market continued to grow its ~$100 million private-label business, expanding into cleaning products, while Misfits Market and GoPuff also intro’d their own brands.

Target’s private label also scored big, generating $30 billion in annual sales, Brian Cornell, chairman and CEO, told investors during its Q3 earnings call.

“Across the portfolio, owned brands continue to outperform their national brand counterparts, growing at double the rate of the total enterprise in the third quarter,” Christina Hennington, Target’s EVP and chief growth officer, said during the same call.

Faux meat falters

In January, we previewed what 2022 would look like for plant-based meat, and experts anticipated a tougher year for the category as competition grows and retailers, fast food chains, and VCs get a bit more selective.

The category has been stagnant as adoption slows: A Deloitte survey published in September found 47% of US shoppers sometimes buy plant-based, down 3% YoY.

Beyond Meat CEO Ethan Brown said in August consumers were shifting purchases to cheaper animal protein and private-label items. Its third-quarter earnings in November saw the trend continue, as the company reported a 22.5% drop in net revenue, and $101.7 million in net loss.

  • Beyond’s peers have also had trouble meating expectations: Maple Leaf Foods said in August it planned to cut down its plant-based protein division, Greenleaf Foods, by 25%, while meat giant JBS shuttered its plant-based Planterra Foods business entirely in October.
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A “shakeout does appear to be underway” within the category, Brown noted.

“As is the case with many emerging industries that challenge the status quo, the path to mainstream adoption is rarely straight and smooth,” he said. “Turbulence along the way generally does not signal a diminished long-term total addressable market.”

Online grocery ripens

While grocery delivery companies boomed during the peak of the pandemic, they hit speed bumps this year. In addition to more consumers returning to in-store shopping, Moquin noted that consumers are “a bit concerned” to add extra fees to their grocery bills when prices are already so high.

Instacart delayed its IPO due to tough market conditions and cut its valuation three times this year: The first time, in March, by 40% to $24 billion, then to $15 billion in July, and $13 billion in October.

  • Other rapid delivery players faltered too: Jokr ended its US operations, Fridge No More and Buyk ended all of their operations, and Gorillas was acquired by Getir.

“There’s a lot of noise and competition all around for a space that is meeting its full potential and has stayed stagnant in a way,” Jackie Tubbs, intelligence analyst at CB Insights, told us in March.

All access: Still, making online grocery widely accessible for those participating in SNAP (Supplemental Nutrition Assistance Program) was a major priority for retailers and the USDA this year. In September, the USDA announced 150+ grocery chains are now offering online shopping for SNAP recipients, across 49 states and Washington, DC.

“Expanding the diversity of our online shopping retailers is a critical component of our nutrition security goal to provide better access to healthy, safe, affordable foods,” said Stacy Dean, the USDA’s deputy under secretary for food, nutrition, and consumer services, in a statement.

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