How did the pandemic impact key addiction industries in 2020 and what lies in store for the next year1?  Let us take you by the hand to addictions land.

Cheers!  Booze is one of the addictions that typically generates some of the highest revenues. After an overall decline in industry revenues of -9% in 2020, we can expect the year ahead to toast to a sober growth in the U.S. (+1%) and a glass-clinking festive +11%YoY growth worldwide. With restrictions on parties, festivals, eateries, and anything remotely fun during 1H20, alcohol revenues were down -2.8% in the U.S. and -18% YoY worldwide*. In 2H20, restaurants and bars around the world started to open their doors. Consequently, the U.S. market grew a frothy +6.4% YoY (much higher than in recent years), and while global market growth was not yet positive (-1.6% YoY), it showed a strong comeback.

Fast-food nation. Drive-throughs and food delivery services didn’t save the fast-food industry during the pandemic. For 2021, our machines predict that fast-food nations will maintain their healthy appetite with a whopping +8% and +9% YoY growth in revenues in the U.S. and worldwide, respectively. Fast-food was one of the hardest hit addictions in 1H20, with a -5% YoY drop in the U.S. market and -10.4% in growth worldwide. Nevertheless, 2H20 saw a hungry recovery, with U.S. and worldwide fast-food sales reaching their highest levels in recent years (+5.8% and +2% YoY, respectively).

Thirsty for sugar. For the highest addictions’ revenue generator at the moment, our algorithms predict that nonalcoholic drinks will bubble into 2021 with growth of +7% in the U.S. and +9% YoY globally. In 1H20, soft drinks sales lost some of their fizz with -1.1% growth in the U.S. and only -2.7% YoY globally. Revenues were back on track in 2H20 with +5% and +3% YoY growth for the U.S. and worldwide.

Puff puff. Our models predict that in 2021, tobacco revenues will be a rolling smoking +1% YoY in U.S., with zero growth worldwide. During the pandemic, the tobacco industry was the only addiction in our analysis that grew in 1H20 in the U.S. at least (sales rose +7.1%), although global sales were slightly down (-1% YoY). Growth continued in the U.S. in 2H20 (+8.3% YoY) with a slight recovery globally (+1% YoY).

 

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* Worldwide revenues include U.S. revenues.
[1] Tickers used in this analysis:
Alcohol: DEO, BUD, STZ, BF.B, SAM, TAP, PDRDY
Fast-food: MCD, CMG, QSR, YUM, DPZ, WEN, WING, SHAK, PZZA, JACK, DENN, RRGB, TAST, TACO, LOCO, NATH, PBPB
Nonalcoholic drinks: KO, PEP, MNST, KDP
Tobacco: PM, MO, BTI, TPB