Profit Growth

Food & Beverage Companies Predict Profit Gains, Reveal Growth Strategies

In Research, Trends by Hilary Smith0 Comments

2017 is projected to be a profitable year for the food and beverage industry, according to data in the Mazars USA 2017 Food & Beverage Industry Study released last month.

Despite the positive outlook, new government regulations, consumer expectations, food safety, and other industry complications pose significant challenges. The annual study provides valuable insight into the trends, challenges, and opportunities for the food and beverage industry to remain competitive now and in the future.

Sales and sales growth projections

Survey respondents anticipate substantial growth in sales (21% over 2016) as well as slower cost increases, resulting in a projected net profit growth of 16% in 2017.

The participating firms were asked to rank factors that will influence their sales growth.

Top three factors influencing sales growth:

  • New customers
  • Increased awareness
  • Improved sales performance

Top three industry trends projected to increase sales:

  • Healthy/nutritious food
  • Free-from foods (allergen free, gluten free, non-GMO)
  • Private label foods

Company concerns

Reaching double-digit net profit increases won’t come without some roadblocks, and respondents identified both internal and external concerns that will potentially affect their bottom line.

Internally, the top concerns are increasing sales, improving operations, and improving the supply chain. Externally, companies are concerned about food safety, the effectiveness of their marketing campaigns, and rising commodity costs.

Company strategies and priorities

Companies are taking a multi-faceted approach to respond to their internal and external challenges. Action-oriented initiatives and projects, investments, and priorities all align with the primary goal of increasing sales while directly addressing internal and external concerns.

Operational initiatives

Top three operational initiatives being planned or already underway:

  • Process-improvement activities
  • New product introductions
  • Digital marketing/social media

New equipment investments

Most companies (61%) are not planning on investing in new equipment in 2017. However, large companies are more likely to make new capital purchases than smaller ones.  

Supply chain priorities

Top three supply chain priorities remained much the same as last year:

  • Cost of goods
  • Food safety
  • Knowledge/information sharing

Project implementations

Major projects have a significant impact on the bottom line, especially when they’re a response to consumer concerns.

Top three projects companies plan to implement:

For more information about the study participants, methodology, and data, read the full study.

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