Food and Beverage Survey Reveals Industry Strengths, Opportunities
By Donald Snyder, partner at accounting firm Green Hasson Janks
This article is the final installment in a series of three articles discussing the Green Hasson Janks white paper “Women in the Food and Beverage Industry,” which examines the results of the firm’s annual survey of West Coast food and beverage executives.
In the 2015 Green Hasson Janks survey “Women in the Food and Beverage Industry,” West Coast business executives shared their views on a variety of industry-related topics. In the first two articles in this series, we discussed our findings that women are not yet filling leadership roles as often as men in the industry but that there can be real benefits for women-led companies. We also found that there are many areas where women have a major influence on the industry — for example, women are driving the tidal wave of consumer interest in natural, organic and non-GMO products. Please see the first two articles in this series for more insights on women as leaders and women as consumers. In this article, we turn our attention to the industry as a whole.
Driven in many respects by women consumers, the industry is moving swiftly and is constantly adapting to stay a step ahead. Respondents were enthusiastic about industry growth and reported that 77.8 percent of their companies saw an increase in gross annual sales over the last calendar year. Only 8.3 percent saw a decline.
Some 52.8 percent of survey respondents said their company’s gross annual revenue increased by more than 10 percent from the last calendar year.
Respondents expect to keep growing in 2015, using tried and true methods like:
- Selling more to existing customers (71.4 percent)
- Acquiring new customers in existing markets (62.9 percent)
- Expanding into new markets (40 percent)
- Developing new products (31.4 percent)
Those taking the survey also saw no major threat to growth on the horizon. Respondents cited a number of smaller threats, but none were cited by the majority. Some of those smaller threats included pricing competition, adding market share, increased competition, developing new sales channels, operational efficiency, cost of labor/employee retention and financing/cash flow options.
Pricing competition is seen as a major industry challenge. As part of the survey, we interviewed industry expert Nicole Fry, managing partner at First Beverage Group, who said, “You can create a brand for very little, so there are smaller players competing ferociously for market share. An example I see is healthy drinks like coconut water, aloe water, etc.”
Sabrina Merage, who is a principal at Echo Capital Group, a leading food and beverage private equity firm, adds, “As many similar products come to market, they will compete largely on price, and some will fall by the wayside.”
Another industry trend worth noting is social media. Most food and beverage companies are using social media, according to the survey. Almost all (90.6 percent) of survey respondents have a company website (some of which include a company blog) and 56.3 percent use Facebook. Other major channels being used included Twitter, LinkedIn and Pinterest. There appears to be room for food and beverage companies to expand their social media presence to begin building stronger relationships with Millennials.
In a growing industry, it might be easy to sit back for a minute and enjoy, but the food and beverage industry is moving too fast for complacency. There are opportunities that shouldn’t be ignored, like the power of women consumers and the potential power of women as leaders. Pricing competition and under-utilization of social media are threats that smart food and beverage companies will address sooner rather than later. With the economy strengthening, the industry’s future looks bright.