What does 2020 hold? Most food and beverage industry professionals expect sales and employment growth
Mazars conducted an online survey between March and May 2019 and received responses from individuals in senior leadership positions at both large (over $50m in annual revenue) and small companies (less than $50m in annual revenue). Just above half of respondents worked at manufacturing companies, and 22% were wholesalers or distributors. Nearly three-quarters had sales of $50m or more.
The number of respondents who expected sales growth and net profit projections for 2020 fell since last year by 6%, however, more respondents anticipated employment growth in the coming year, increasing from 69% to 73%.
Major trends impacting sales
Asked which industry trends would have the most impact on sales growth: 19% said 'healthy/nutritious', 16% responded 'private label foods', and 14% surveyed either 'free from (allergen free, gluten free, non-GMO) and 'plant based options'.
"The ranking was consistent across large and small firms, pointing to uniformity in how the top trends are affecting food companies of different sizes," noted Mazars.
Top concerns and priorities for 2020
Respondents were asked about what type of competition they were most concerned about. 78% stated other producers/retailers, while 18% stated online. When asked about the impact of Amazon on their business, 58% did not think there will be any impact and 30% said that Amazon would have a positive effect on their business.
The top external concerns were food marketing/advertisements effectiveness, food safety, traceability and, quality assurance, and rising commodity and other costs. This was consistent across companies of all sizes. The lowest concern was mergers and acquisitions.
When asked about mergers and acquisitions, six in 10 respondents said they were not planning to sell their companies, 9% said they were looking at the possibility of selling in the next two years, and nearly 20% said they are planning to sell their company in the next five years.
Priorities for food and beverage companies heading into 2020, according to the report, include process-improvement activities, digital marketing/social media, new product introductions, and utilization of data analytics. Related to new product introductions in the new year, companies Companies were asked to rank their top motivators for introducing new food products, and health and wellness was the top motivating factor followed by sustainability.
CBD?
New to the survey this year, Mazars asked respondents several questions around CBD about their plans to introduce CBD products and challenges facing the market.
About 1 in 4 companies were planning on introducing or extending product lines with CBD. The same number of companies felt that CBD had the same level of transparency as other supply chains. A majority of respondents, (53%), stated that they would try CBD in products as a consumer.
