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2016 Industry Snapshot – What Can We Expect?

For the past seventeen years, we have been asking raw material suppliers, machinery suppliers, converters, foodservice distributors and operators to share with us information that we compile into our state of the industry report.  In this survey, we ask as few questions as possible to help us get to that snapshot of what today’s foodservice packaging industry looks like.  It’s meant to be a reflection on 2015 as well as a preview of what folks think is coming in 2016.  We send the survey out in January of each year to try to capture those early impressions of the current year.  FPI members are, of course, asked to participate, but we also open our survey to non-members within the industry.  The benefit to participation by non-members is that we share the full report with those who complete the survey.

So, what did we see in this year’s report?  Things are positive.  2015 was a pretty good year.  About 57 percent of supplier and converter respondents experienced growth in volume, and nearly 60 percent reported profit growth in 2015.  One hundred percent of the responding foodservice distributors rated 2015 better than 2014 in terms of sales of foodservice, and over 75 percent of the foodservice operators polled claimed better sales in foodservice for 2015. 

We’ve all seen the bouncing around taking place in the markets as of recent.  The first few days of 2016 were a little unsettling and sometimes when I listen to the reports from Wall Street on my way home, it’s a little unnerving to think about what’s going on with my retirement accounts!  I think maybe a little of this volatility rubbed off on our respondents as they made their predictions for 2016.  Lots of people believe 2016 will be a good year, the optimism feels a little more cautious.  Almost 70 percent of responding foodservice operators felt that foodservice sales would be better in 2016 than they were in 2015, and 75 percent of foodservice distributors thought 2016 would see better foodservice sales over 2015.  For converters and suppliers, 65 percent of the North American manufacturers reported corporate expansion plans through construction of new facilities, expansion of current facilities, and mergers and acquisitions. More than half of North American converters also plan to purchase new machinery in 2016.

In addition to questions related to last year and this current year, we also ask a few mid-term questions about the next 5 years.  The raw material and machinery suppliers as well as converters are asked about specific areas they feel are poised to grow.  Respondents this year foresee that the greatest area for market expansion over the next five years is in the fast casual sector. This is due to the segment gaining the attention of the millennial generation and drawing customers from traditional quick- and full-service restaurants. Other areas for potential growth include convenience stores and quick serve restaurants.

These are just a few tidbits, of course.  The report itself is a meaty 50 plus pages, with compiled and aggregated responses from all of our sectors.  For everyone who did participate this year, thank you! A copy of the report should be on its way to you.

If you are eligible (aka a raw material or machinery supplier, a converter, foodservice distributor or foodservice operator) and haven't participated before in the survey, I would highly encourage you to do so.  We know it takes a few minutes and surveys get old fast, but the knowledge we gain back from you is so important.  If you would like more information or would like to be on our lists for next year's survey, shoot me an email.

Posted By Natha Dempsey (Vice President) | 3/15/2016 9:22:46 AM