The first annual U.S. Food & Beverage Industry Study found that survey participants expect that the most important industry factors influencing sales growth in 2013 will be new customers (59 percent), new products (51 percent) and increased selling prices (40 percent).
The figures are optimistic, despite the current economic climate. According to a recent Symphony IRI report on the consumer packaged groups market, dollar sales growth was only around 3-4 percent in 2012, with unit sales flat in most categories.
According to the WeiserMazars report, the top four trends to impact the industry in 2013 are healthy/nutritious, organic, ethnic/international and private label foods.
"This, again, indicates the need for food and beverage companies to focus on trends impacting their particular sector or region, and, when possible, to develop offerings that can take advantage of multiple trends concurrently," the report said.
However, rising commodity and raw material costs are concerns for the industry, and these are predicted to off-set the solid gains in sales. The survey respondents projected that net profits to rise by about 6 percent.
"With food prices forecast to move 3 percent to 4 percent higher this year, it is not surprising that the major concern among food and beverage companies surveyed was the cost of goods," stated Brian Todd, president and CEO of The Food Institute.
"Inflation almost entirely offset sales increases last year at grocery stores, with the Food Institute noting that sales in the sector increased less than 1 percent last year after inflation was taken into account, based on the association's exclusive pricing indices."
While average responder predicted positive growth to continue, 18 percent of participants indicated profit would decline, while another 33 percent reported that profit would remain unchanged.
- Capital expenditures increased by an average of 9.3 percent.
- Expansion or new facilities based on facility square footage increased by an average of 9.1 percent.
- Product lines increased by an average of 4.9 percent.
- Employment increased by an average of 2.1 percent.
- Research and development spending increased by an average of 1.7 percent.
"The purpose of this study is to provide executives with comprehensive insight in comparing the state of their company to the overall food and beverage industry," said Louis Biscotti, partner & national director of WeiserMazars' food and beverage sector.
"This benchmarking can provide organizations with insight into predicting realistic levels of growth in 2013."
According to WeiserMazars, the 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 majority of participants were manufacturers (36 percent) and wholesalers/distributors (35 percent), added the report.
Symphony IRI's Center Store: Driving Growth from the Inside Out report painted a gloomier picture. Unit sales of cold cereal; fresh bread & rolls; chocolate candy; and salty snacks declined 3 percent, 3.3 percent, 3.7 percent and 0.6 percent respectively in 2012. On the other hand, unit sales of energy drinks, bottled water and coffee surged 18.7 percent, 4.6 percent and 4.5 percent respectively over the same period.
2012 was also a good year for unit sales of weight management products (up 15.1 percent); ready to drink coffee and tea (up 7.8 percent); crackers (up 5.1 percent); snack/granola bars (up 4.3 percent); and vitamins (up 4.5 percent), said Steven S. Ramsey, executive, client insights, at Symphony IRI.
However, the declines in most other categories reflected an "ongoing wariness" among consumers, he said.
"These declines are reflective of an ongoing wariness of many shoppers to open their wallets despite a rash of good news, such as the December 7 report that U.S. unemployment dipped from 7.9 to 7.7 percent, the lowest rate in several years."