Top ten food companies in 2020

Environmental impact, trade disputes, and fluctuating business conditions are posing great challenges to food companies worldwide.

From Cargill to Mondelez, Food Processing Technology lists the top ten publicly-traded food companies in 2020, based on 2019 revenues, and details the impact of COVID-19 on their business.

World’s biggest food companies: Top ten by revenue

1. Cargill – $113.5bn

2. Archer Daniels Midland Company – $64.65bn

3. Nestle – $63.8bn

4. Sysco Corporation – $60.1bn

5. JBS – $51.7bn

6. George Weston – $50.1bn

7. Tyson Foods – $42.4bn

8. Bunge – $41.14bn

9. PepsiCo – $36.26bn

10. Mondelez -$25.9bn

1. Cargill – $113.5bn

Cargill’s net revenues declined by 1% to $113.5bn in 2019 compared with the previous year, due to a challenging business environment and adverse weather conditions throughout the year.

Strong demand for beef and eggs propelled the growth in the protein business segment in North America, however. The company is investing in the development and expansion of multiple facilities in various Chinese provinces to address the increasing demand for protein, particularly in Asia. It is also diversifying its protein business and expanding the food ingredients and applications business with new acquisitions.

Cargill adjusted its manufacturing operations and supply chains to the consumer demand shift during the COVID-19 crisis and reported a 3% rise in the first six months revenues in 2020 compared to the same period in 2019.

Based in the US, Cargill employs 155,000 personnel and operates in 70 countries across North America, the Middle East, Europe, Africa, and Asia.

2. Archer Daniels Midland (ADM) Company – $64.65bn

Multiple factors, including adverse weather conditions in the US, African Swine Fever, and the US-China trade dispute, significantly impacted Archer Daniels Midland’s 2019 performance, resulting in just 0.4% revenue growth compared with the preceding year.

ADM company operates agricultural services and oilseeds, carbohydrate solutions, nutrition, and other business segments. The passage of biodiesel tax credit (BTC) for 2018 and 2019 resulted in strong revenue growth in refined products in agricultural services & oilseeds segment which earned approximately $270m in net operating profit.

The carbohydrate solutions segment delivered an adjusted operating profit of $644m in 2019 contributed by manufacturing costs reduction and greater income from co-products in North America. In the nutrition segment, margins were under pressure in emulsifiers and edible beans but the continued growth of margin in proteins came to the rescue.

Net revenues declined by 4% to $46.3bn in the first nine months of 2020, compared with $48.3bn in the same period in 2019. Crushing margins in North America shrunk due to slow farmer selling and COVID-19 pandemic impact on meal and oil demand.

Headquartered in Chicago, US, ADM is a multi-national food processing company with subsidiaries in 70 countries in North America, South America, Europe, Middle East, Africa, and Asia.

3. Nestle – $63.8bn

Nestle reported organic growth of 3.5% in 2019, attributed to the strong momentum in the US and performance of Purina PetCare, Nestle’s pet food company, worldwide.

The company’s net sales grew by 1.2% to $95.3bn, of which the food business, including milk products and ice cream, nutrition and health science, prepared dishes and cooking aids, confectionery, and pet care segments reported combined revenue of $63.8bn.

Vegetarian and plant-based food products such as the Sweet Earth Awesome Burger and the Garden Gourmet Incredible Burger, saw double-digit organic growth, recording sales of $205.9m.

The company transformed its pizza and ice cream businesses in the US from a direct-store-delivery network to a warehouse distribution model in 2019.

Nestle’s net sales declined by 9.4% to $67.4bn in the first nine months of 2020 compared to $74.5bn in the corresponding period in 2019. In response to COVID-19, Nestle increased its spending in media, including digital channels, to support brand and consumer engagement. Reduced in-store activity during the lockdown and lower structural costs offset the expenses related to COVID-19.

Based in Vevey, Switzerland, the food and beverage company employs 291,000 personnel. The company offers a range of products and services, including baby foods, bottled water, cereals, chocolates and confectionery, coffee, dairy, drinks, food service, ice-cream, and pet services.

4. Sysco Corporation – $60.1bn

The net sales of Sysco Corporation increased by 2.4% to $60.1bn in 2019, aided by a 4.2% increase in sales of the US foodservice operations, while international sales declined by 0.2% compared to the prior year.

Fresh and frozen meats, canned and dry products, and frozen fruits, vegetables, bakery, and other segments generated 19%, 17%, and 15% of the net sales respectively in 2019. Restaurants are the company’s major customers that contributed 62% to the net sales in 2019.

Sysco’s sales declined by 12% to $52.9bn in the current financial year versus the last year, significantly impacted by the COVID-19 outbreak.

Headquartered in Houston, US, Sysco Corporation has approximately 323 distribution facilities globally and employs more than 69,000 people. The company’s primary operations are situated in North America and Europe.

5. JBS – $51.7bn

The net revenue of JBS climbed by 12.6% to $51.7bn in 2019 compared with the previous year, attributed to strong demand from China.

Beef and lamb exports from Australia to China increased by 80%, while the US pork export volume to China increased by 10% in 2019. The company’s gross profit grew by 21.3% compared with 2018.

JBS business unit Seara posted a 15.2% rise in net revenue driven by the growing preference for the brand among consumers in Brazil. Seara launched more than 180 products across Seara Nature, Seara Rotisserie, and Incredible Seara lines and expanded the Seara Gourmet range in 2019.

The COVID-19 pandemic did not impact the revenue growth of the company significantly. The company reported a 32.9% increase in net revenue in the second quarter of 2020 versus the second quarter of 2019.

Headquartered in São Paulo, Brazil, the global meat processing company’s business operations are categorised into two segments, namely beef and pork. It serves 80 countries in six continents, including North America, South America, Europe, and Australia, employing more than 240,000 personnel.

6. George Weston – $50.1bn

George Weston’s net revenue grew by 3.2% to $50.1bn year-on-year in 2019, while operating income rose by 14.4%, driven by all the three operating segments, Loblaw food and pharmacy stores, Choice Properties, and Weston Foods.

Weston Foods is a North American bakery engaged in commercial bread, artisan, doughnuts, cakes, biscuits, rolls, and more. It comprises 40 bakery facilities in Canada and the US that employ approximately 6,000 people. Some of the popular Weston Foods brands include Wonder, Ace Bakery, Country Harvest, Casa Mendosa, and D’Italiano.

Weston Foods sales were negatively impacted by the decline in volumes in 2019. Its sales grew by 1.6% in 2019, compared with the prior year.

Net sales in the Weston Foods segment reduced by 4.8% in the first half of 2020 compared with the corresponding period in 2019, attributed to declining volumes in certain retail categories and food services channels due to the impact of COVID-19.

George Weston is a Canadian public company with businesses in food and grocery retail, real estate, and consumer goods. The company employs more than 200,000 people.

7. Tyson Foods – $42.4bn

Tyson Foods’ sales grew by 6% year-on-year in 2019, driven by acquisitions and rise in average sales prices in beef and prepared foods segments.

The beef segment accounted for 36% of the net sales of $42.4bn, followed by chicken (31%), prepared foods (20%), and pork (10%).

The decline in average sales price in chicken and pork segments offset the beef segment growth, resulting in an approximately 6.7% decline in the operating income in 2019 compared to the prior year.

COVID-19 negatively impacted the first nine months of the company’s 2020 financial performance due to direct incremental expenses of approximately $340m. Tyson Foods, however, reported strong results in the third quarter driven by beef and pork segments.

Based in the US, the company operates 42 distribution centres and external cold storage facilities, and two research and development centres. It has a workforce of approximately 141,000 people, with 122,000 employees in the US alone.

Tyson Foods sells its products to approximately 145 countries in 2019. Its key markets include Australia, Canada, Central America, Chile, China, the European Union, Japan, Mexico, Malaysia, the Middle East, South Korea, Taiwan, and Thailand.

The core brands of the company include Tysoni^®, Jimmy Dean^®, Hillshire Farm^®, Ball Park^®, Wright^®, Aidells^®, ibp^®, and State Fair^®.

8. Bunge – $41.14bn

Bunge reported a 10% year-on-year decline in net sales in 2019, due to poor performance of its agribusiness, and sugar & bioenergy segments.

Oilseed processing, grain origination, grain trading, and distribution businesses caused a 12% decline in net sales of the agribusiness segment in 2019.

Lower global sugar sales volumes and prices, as well as the company’s exit from international trading and merchandising business in 2018, led to a 43% sales decline in the sugar & bioenergy segment in 2019, partially offset by higher ethanol sales volumes and prices in Brazil.

Sales in the edible oil products segment increased by 1% primarily due to Loders’ acquisition in 2018, offsetting lower prices in the US, Europe, and Brazil. Despite the COVID-19 pandemic, the segment continued to perform strongly in 2020, reporting higher earnings in Brazil and Asia due to improved demand from food processor and consumer retail channels.

Bunge is a global agribusiness and food company based in the US. It operates five business segments, namely Agribusiness, Edible Oil Products, Milling Products, Sugar and Bioenergy, and Fertilizer. It employs approximately 25,000 people and operates grain facilities, oilseed processing facilities, and food and ingredient production and packaging facilities worldwide.

9. PepsiCo – $36.26bn

PepsiCo’s revenue in 2019 was $67.16bn, of which food revenues accounted for $36.26bn, primarily driven by the sales of Frito-Lay North America (FLNA).

Effective net pricing and volume growth increased the net revenue of FLNA by 4.5% and volume growth by 1%, primarily by brands Doritos, Cheetos, and Ruffles. In Latin America, the food & snacks division generated approximately 90% of the region’s combined revenue.

The additional charges incurred during the COVID-19 pandemic negatively impacted PepsiCo’s operating profit in 2020, although net revenues in the first nine months of 2020 grew by 9% versus the corresponding period in 2019. The growth was attributed to strong food and snacks business and improved beverage business globally.

Based in the US, PepsiCo owns popular brands such as Frito-Lay, Gatorade, Pepsi-Cola, and Quaker. It serves more than 200 countries and territories such as North America, Europe, Latin America, Africa, Middle East, China, Australia, New Zealand, and South Asia.

10. Mondelez – $25.9bn

Mondelez’s net revenue declined by 0.3% in 2019 due to unfavourable currency and the impact of the divestiture of most of the company’s cheese business in the Middle East and Africa, which was partially offset by a 4.1% increase in its organic net revenue and acquisitions.

The company generated approximately 74.4% of its net revenues outside the US in 2019. The organic net revenue growth was driven by higher net pricing and favourable volume or mix. Mondelez acquired majority stakes in Perfect Snacks in 2019 and Tate’s Bake Shop, in 2018.

Higher net pricing, favourable volume or mix, and improved net revenues from the Give & Go and Perfect Snacks acquisitions offset the COVID-19 pandemic’s impact, resulting in a 0.1% increase in net revenues in the first six months of 2020.

Based in the US, Mondelez markets snacks, including biscuits, chocolate, gum and candy, cheese, grocery, and powdered beverage products, in more than 150 countries in Latin America, North America, Europe, Asia, Middle East, and Africa.

The company operates in approximately 80 countries served by a workforce of roughly 80,000. It has 126 manufacturing and processing facilities in 44 countries.