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U.S. Food and Beverage Industry Expects Double-digit Growth

Food and beverage sector decision-makers anticipate a substantial increase in sales, profit and employment for 2015, up considerably from last year’s performance.

That’s according to the latest survey of U.S. companies across the food and beverage industry by New York-based WeiserMazars LLP, a leading accounting, tax and advisory services firm.

The firm’s third annual U.S. Food & Beverage Industry Study, released today, cites new customers, sales performance improvements and new products as the major factors that are most likely to influence growth, with sales expected to increase an average of 18 percent in 2015 compared with a 13 percent increase in 2014.

The study was conducted in conjunction with The Food Institute, AFI and Stagnito Business Information, publisher of Progressive Grocer.

Profits, employment on the rise

Average net profits are also expected to increase 18 percent in 2015 compared with a 17 percent increase in 2014, while industry employment is predicted to post a 13 percent gain from 2014. Other key findings include an expected 7 percent average increase in labor costs, 12 percent average rise in overall health care costs and an 8 percent average growth in commodity costs.

“This year’s study reaffirms many of the trends we have seen emerge in the overall food and beverage industry over the last three years as companies continue to focus on new customers and improved sales performance to drive sales growth,” said Louis J. Biscotti, partner and national director of WeiserMazars’ Food & Beverage Practice. “At the same time, management has increased their efforts to improve both customer and product profitability by reducing costs, improving operations and introducing process improvements.”  

Trends differ by firm size

Similar to the 2014 study findings, this year’s respondents stated that the industry trends that are projected to increase sales are different for small and large firms. In small firms (less than $50 million in revenue) private label foods and organic foods are the top two trends, while large firms (more than $50 million in revenue), pointed to locally-grown/produced foods and allergen/gluten-free foods.  

Small and large firm respondents also differ on the top external and environmental concerns facing the industry. Small firms rank food safety, traceability and quality assurance as the top concern, with rising commodity costs second. Respondents from large companies ranked new government regulations related to the impending Food Safety Modernization Act as the top concern, followed by food safety, traceability and quality assurance and rising commodity costs.

“The survey findings represent a high level of consciousness within the industry for food safety, traceability and quality assurance, which mirrors the public’s concerns for healthy and safe foods,” Biscotti said. “What is a surprising finding among the larger industry respondents is their ranking of locally-grown foods as their top trend toward increasing sales.  This may have wider ramifications for the industry as a whole in the future.”

2015 ‘very profitable’

The study’s overall takeaway is a very profitable year in 2015.  Process improvement activities are taking center stage and the industry is continuing to invest in the future through succession plans and energy efficiency credits. At the same time, the industry seems slow to integrate online purchases and e-commerce, which remain a very small percentage of current sales and purchases.

Survey participants included manufacturers and wholesalers/distributors representing a range of annual sales volumes from $10 million or less to more than $100 million. The survey examines the ways these companies are adapting to changing consumer trends, proposed government regulations, new companies entering the field, and new product and service offerings. 

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