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What's the State of our Industry?

It's hard to believe, but for the past 18 years weve been conducting our annual State of the Industry Survey. Each year, we ask raw material suppliers, converters, foodservice distributors and operators to share information that we compile into our State of the Industry report. We try to really get a snapshot of what today's foodservice packaging industry looks like both as a reflection of 2016 and as a preview of what's to come in 2017. 

The survey goes out in the first quarter of the year to FPI members as well as non-members within the industry. This gives us an additional viewpoint, and gives non-member respondents an opportunity to view the full report. 

You're probably wondering what we saw in this year's report. Much like last year, things remain positive. Nearly three quarters of foodservice packaging manufacturers and suppliers experienced growth in volume, while more than 40 percent reported profit growth in 2016. This year, 77 percent of the industry expect volume expansion and 57 percent expect profit growth. Foodservice operators who responded were also overwhelmingly optimistic and all predicted sales to increase by year-end.

If last year's respondents were cautiously optimistic, many this year were just plain out optimistic! More than 60 percent of the North American manufacturers reported corporate expansion plans through construction of new facilities, expansion of current facilities, and mergers and acquisitions, while more than 80 percent of North American converters also plan to purchase machinery in 2017.

Also in line with previous years, respondents see the fast-casual sector as one of the biggest areas for market expansion. Something new this year is that respondents predict major market expansion in convenience and grocery stores because of improved food and packaging. Catering was also mentioned as more and more consumers look to online ordering and competitive delivery systems. 

One area where we saw some change is in the challenges facing the industry. Usually the suppliers and converters are all on the same page when it comes to naming a priority area, but this year the responses were all over the place. We really saw a good mix of traditional business issues like labor and margin compression, paired with more environmental issues like recycling and end of life. 

Perhaps this is a sign that things are being viewed more holistically. Perhaps its just one of those years where different businesses are experiencing different challenges. Either way, it's something that certainly caught our eye. 

For everyone who participated this year, thank you! We know it takes time from your busy day, but the knowledge we gain from you is so important. Hope you enjoy reading the report. 

For those who did not participate this year, we hope you'll participate next year. The report will only get more valuable with more companies contributing to it. 

In the meantime, the full report and executive summary are available in the "Publications and Resources" section of FPI's online Resources.
Posted By Lynn M. Dyer (President) | 4/28/2017 8:47:35 AM