Healthy outlook for food and beverage companies

By: 
Food Engineering Magazine

The food and beverage industry leads all other industry segments when it comes to weathering the economic downturn, with 49 percent indicating their companies are “thriving and growing,” according to McGladrey’s fifth annual Manufacturing and Wholesale Distribution Survey. The survey asked leaders of US-based manufacturing and wholesale distribution enterprises to provide perspectives on the current state of their companies and industry and the strategies they are implementing to sustain or grow profitably in the coming year.

Of the 1,601 respondents included in the final survey analysis, 124 companies (about 12 percent of the total sample) represent the food and beverage industry.

Ninety-one percent of food and beverage respondents report being very or somewhat optimistic about growth prospects for their companies, a 20 percent increase from the 2009 survey. Ninety-one percent of the food and beverage companies responding are privately held; 37 percent are manufacturing only, 31 percent are distribution only and 40 percent have a combination of manufacturing and distribution activities.

The survey also found:

  • When compared to all industries, food and beverage companies are more aggressive about introducing new products and analyzing customer/product profitability.
  • The percentage of food and beverage companies that say working globally is part of their business strategy increased from 64 percent in 2009 to 75 percent in this year’s study.
  • This year, 16 percent of food and beverage companies say they will invest $10 million or more in capital projects (up 10 percent from 2009).
  • Two-thirds of the respondents expect price jumps in raw materials and energy.

Because food and beverage companies weathered the recession better than most industries, their hiring needs over the next year are not so great. However, companies that are hiring are seeing skill shortages for entry-level, supervisory, quality control, sales and warehouse workers.

“The emphasis on introducing new products and analyzing customer/product profitability reflects the critical balance food and beverage companies must strike between developing profitable products to meet fast-changing consumer tastes while accurately forecasting sales,” says Cristin Singer, RSM McGladrey partner/managing director.

For more information and to download the report, visit McGladrey’s website.