An increasingly busy population will drive demand for prepackaged foods
Los Angeles, CA (PRWEB) October 08, 2012
The Baking Mix and Prepared Food Manufacturing industry has bounced back from a poor showing following the recession. Consumers' disposable incomes plummeted during the recession, which deterred them from buying discretionary industry products such as dessert mixes and sweeteners. As a result, industry revenue fell 0.4% in 2009 and 0.5% in 2010, according to IBISWorld industry analyst Olivia Tang. However, Americans' lifestyles are becoming more fast-paced, causing consumers to demand more pre-packaged foods and easy-to-prepare meals such as noodle mixes. In addition, more and more health-conscious consumers are seeking out healthier food options. This trend is driving up demand for pre-cut fruit and artificial sweeteners, which will lead to industry revenue growing 2.6% in 2012. Thus, higher demand for healthy and convenient meal options is anticipated to offset previous revenue declines, causing revenue to grow at an annualized rate of 1.7% to $22.9 billion during the five years to 2012.
Baking Mix and Prepared Food Manufacturing industry products are characterized by high profit margins because their convenience commands a premium. However, the cost of key inputs has been high and volatile during the past five years. For example, the price of corn jumped 58.0% in 2011, cutting into industry profit, Tang says. Some firms were able to pass on the high cost of major commodities in the form of higher prices to maintain profit. In addition, because companies have been investing more in technology to raise production volumes while making processes more efficient, per-unit costs have fallen.
In the next five years, the industry is forecast to continue growing. As more Americans return to work, they will have less time to cook meals and demand for pre-packaged foods will continue to rise. In addition, industry consolidation, through acquisitions, will allow resulting enterprises to better serve the global market, furthering export growth. Consequently, revenue is projected to grow during the five years to 2017. The convenience factor will also allow firms to continue charging a premium for their products. The industry continues to face intense internal competition so some firms are willing to invest in mergers and acquisitions, which increase market concentration slightly. The consolidation of ownership is expected to increase in the future engendered by acquisitions, continued product innovation, strong brand loyalty and aggressive marketing initiatives. For more information, visit IBISWorld’s Baking Mix & Prepared Food Manufacturing in the US industry report page.
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IBISWorld industry Report Key Topics
This industry manufactures perishable prepared foods, such as sandwiches, prepared meals and peeled or cut vegetables. Firms in the industry also use dried and dehydrated ingredients to manufacture dessert mixes, flavoring powders and processed eggs.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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