A study recently released by Grant Thornton paints an optimistic picture for the future of food manufacturing around the world. We’ve gone through the entire report and pulled out some of the more interesting facts as they relate to our local area (Canada and the US). Here’s some of the highlights we found:
- Canada provides the most attractive financing options relative to all other surveyed areas in terms of access to capital throughout the recession and availability of low interest loans.
- Canada, among a few other choice global markets (Ireland, Australia) is dominated by a small number of vastly powerful and national retailers who retain a dominant market position. The study suggests a number of ways to address this issue as a processor, including:
1. Diversifying your customers by targetting food service, hospitality, consumer direct and other non-mass-retail markets
2. Building a product leader in your category
3. Developing niche markets
4. Diversifying your product portfolio
5. Exporting to other markets
- Localisation is a bigger trend in Canada than in other counties, in part due to government subsidized and funded advertising encouraging consumer participation in consuming locally grown food. Nearly 50% of those who source internationally are concerned with the traceability implications of buying from other counties which have different, sometimes less strict regulation.
- Food manufacturers are most likely to invest in equipment, information systems and product development, especially in North America.
- Generally food manufacturers are very optimisitic, with over 90% of those surveyed believing they will increase sales and over 80% believing they will increase profitability this year.
- The sectors most interested in investing in information technology are fruits, vegetables and seafood, with roughly 80% of respondents in each indicating they’d be putting money into IT investments this year.
- Regulation seems to stem from consumer demand rather than an in industry need for it, and often results in increased complexity.
- Environmental and tax regulations seem to hurt businesses the most, while grants, traceability and health/labelling regulations help the most.
- Retailer power is ranked as the biggest constraint on business growth.
- The biggest trend in foods is luxury/premium brand foods which focus more on customer experience and less on price.