Friday, 22 July 2011

Global Food and Beverage Manufacturing Supplier Industry Outlook Survey 2011–2012

New industry survey reveals that the majority of respondents are optimistic about their company’s revenue growth in 2011, on the back of steady revenue growth in the food and beverage industry since 2004.

London – July 22, 2011 – Survey results show that respondents are optimistic regarding the revenue growth of their companies in 2011. Growth in the industry has been strong since 2004 due to increased consumption and demand for healthier products. Although respondents are concerned about ‘cost containment’ and ‘market uncertainty’, they expect to generate growth in emerging regions such as China, India and the Middle East. Suppliers expect to increase their marketing budgets in line with buyer expectations, and new media marketing channels will dominate this investment.

China and India identified as top emerging regions for revenue growth
Both buyer and supplier respondents believe that China, India and the Middle East will provide the most growth potential in 2011, and Brazil and Eastern Europe were also identified as important emerging regions. In the case of developed regions, respondents expect the US, Germany, Australia, the UK, Canada, South Korea, and Singapore, Taiwan and Hong Kong to deliver the most growth potential in 2011.

Consolidation in the industry expected to increase in 2011
The majority of respondents expect increased consolidation in the food and beverage industry in 2011 as a result of the problems small companies have faced due to the global economic crisis. Valuations of small companies are increasingly attractive to larger companies, who can use consolidation to increase their market share. Consolidation can also help companies to reduce operational costs, optimize resources and attain economies of scale.

Buyers want suppliers to improve customer service, products and prices
Buyer respondents identified that they want suppliers to ‘improve customer service’, ‘innovate products’ and ‘reduce prices.’ These actions are vital for suppliers to gain contracts with buyers, and suppliers are focused on product innovation and development in order to meet buyer requirements and remain profitable and sustainable.

Suppliers to increase marketing budgets to win buyer contracts
As a result of buyer demands, suppliers’ marketing budgets are set to increase in 2011, and the average size of global, annual marketing budgets in the food and beverage industry are set to rise to over US$2 million. Large marketing budgets indicate that suppliers will use aggressive marketing campaigns in 2011 in order to win buyer business. This also indicates that there is increased confidence in the industry due to recovery after the global economic crisis.

New media will dominate marketing in 2011
Respondents identified that they plan to increase investment in ‘email and newsletters’, ‘corporate and brand websites’ and ‘online content sites’ in 2011. Global use of the internet is increasing in both developed and developing regions, and internet marketing is therefore a viable way to reach potential customers. It is also a relatively inexpensive method, as online marketing is cheaper than traditional forms of advertizing.

Respondents concerned about ‘cost containment’ and ‘market uncertainty’ in 2011
The majority of respondents highlighted that ‘cost containment’ was their company’s leading business concern in 2011, followed by ‘responding to pricing pressure’ and ‘market uncertainty.’ Increasing raw material costs, operating expenditure and transportation costs have led to concerns over cost containment, and companies plan to reduce costs at each stage of the processing chain.

Suppliers use marketing to acquire and retain customers and build brand awareness
The majority of respondents expressed that they use marketing for ‘customer retention’, followed by ‘customer acquisition’ and ‘brand building and awareness’, and these aims have not changed significantly since the 2009 and 2010 surveys. Regardless of company region or turnover, ‘customer retention’ emerged as the leading marketing aim. In line with this, respondents identified their key marketing amendments in 2011 as the need to ‘focus sales efforts on generating new business’ and ‘focus sales efforts on existing markets.’

To purchase the full version of this report, ‘Global Food and Beverage Manufacturing Supplier Industry Outlook Survey 2011–2012: Industry Dynamics, Market Trends and Opportunities, Marketing Spend and Sales Strategies,’ please click here.


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For more information on the article, please contact:
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Shelly Wills
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