In the coming years, the food and beverage industry is expected to continue its growth in both revenues and profits, according to a new survey released recently by an industry analyst group.
Nearly 60% of F&B executives said they expect consumers to continue to have increased demand for both new and familiar food and beverage products. Yet F&B industry leaders remain cautious when it comes to taking strategic risks and protecting their companies’ reputations. Increased competition, food safety issues and increasing efficiency in marketing and sales are other top concerns.
A Wide-Reaching Spectrum
The survey — which was conducted by McGladrey LLP, the leading Chicago-based consulting group for F&B and other industries — was based on responses from 179 of F&B’s most important chief executives, including growers, manufacturers and processors, distributors, and retailers. The businesses participating have annual revenues of at least $10 million and up to $1 billion.
How are F&B executives planning to sustain this increased demand for their products? About 80% said it’s going to be through the development of new products, according to the survey. And they plan to exploit today’s most popular trends in F&B to identify this next generation of “must-have” F&B products.
5 Biggest F&B Trends Right Now
The biggest and most influential trends in food and beverage right now include focusing on a products’ health and wellness benefits, using only natural or organic ingredients, incorporating ethnic foods or flavors into existing food and beverage products, seeking locally sourced providers for ingredients and products, and enhancing simplicity and convenience.
Christen Singer, who is a partner with McGladrey and the head of its F&B team, said that everybody is looking for the next kale or quinoa, relatively exotic foods that are known for their health benefits.
Worry about Product Recalls
But F&B industry leaders today are also very sensitive to their company’s reputation among consumers. A single product recall can seriously damage a company in the eyes of its customers.
About 45% of the executives surveyed said maintaining product recall capabilities was a major priority while 40% said product quality was their biggest day-to-day risk. As a result, most companies today are focusing on sourcing the highest quality ingredients and establishing supply chain tracking systems.
Still, despite these actions only about 33% of executives surveyed said they were satisfied with their current safety and recall strategies.
Cyber Safety A Serious Issue
Another area of deep concern is the security of their information technology systems. Corporate piracy and hacking the personal information in their databases is something most companies have to be worried about these days, especially in the wake of the nearly daily reports of the latest hacking scandal.
Fewer than 50% of the F&B executive interviewed said they felt confident about the safety of their data and IT systems. Most said they were looking at new ways to reinforce cyber security and enhance security protocols, including installing new or upgraded software systems.
The survey, which was conducted online, found that despite these concerns most F&B executives remained optimistic about the future of the industry. And most plan to continue to introduce new products or expand existing product lines in order to build their customer base in the coming years.