New York, NY (October 2, 2015) – WeiserMazars LLP, a leading accounting, tax and advisory services firm, today released its third annual U.S. Food & Beverage Industry Study, which found that sector decision-makers anticipate a substantial increase in sales, profit and employment for 2015, up considerably from 2014. The study is based on a survey of U.S. companies across the food and beverage industry.
This year’s study 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% in 2015 compared with a 13% increase in 2014. Average net profits are also expected to increase 18% in 2015 compared with a 17% increase in 2014, while industry employment is predicted to post a 13% gain from 2014. Other key findings include an expected 7% average increase in labor costs, 12% average rise in overall healthcare costs and an 8% average growth in commodity costs.
The WeiserMazars LLP 2015 Food & Beverage Industry Study, conducted in conjunction with The Food Institute, AFI and Stagnito Media, offers benchmarks against which to assess 2014 performance, insights into potential drivers for the industry in 2015, and best practices to stay ahead of the competition today and tomorrow.
“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 & 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.”
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,” noted Mr. Biscotti. “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.”
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.
Click here to read the study in its entirety.