Consumers opted for frozen fruit and juice because of their low prices in the past five years
Los Angeles, CA (PRWEB) November 05, 2012
Revenue has remained fairly steady for the Frozen Fruit and Juice Production industry in the five years to 2012. During this time, industry revenue was mainly boosted by decreased consumer income and consumer preferences. Producers have increasingly commercialized the benefits of fruit as an essential part of a healthy diet. In addition, consumer desire for convenient and faster-to-prepare foods has increased demand for frozen fruit, which eliminates the preparation associated with fresh fruit. Revenue has grown at an annualized rate of 0.6% to $3.3 billion in the five years to 2012, but the industry faced significant competition from fresh fruit, which curbed industry growth. “The economic downturn forced consumers to save money as their disposable incomes declined,” says IBISWorld industry analyst Lauren Setar. “Many consumers substituted fresh fruit and juice with frozen fruit and juice during the economic downturn due to its cheaper price, boosting industry demand and revenue in the five years to 2012.”
Nevertheless, the Frozen Fruit and Juice Production industry has faced significant challenges, particularly from a health and nutrition movement highlighting the importance of fresh fruit. “Consumers often buy fresh fruit because of its perceived superior nutritional qualities,” adds Setar. “However, the US Food and Drug Administration and the International Food Information Council have reported that fruit's nutrients are typically retained while frozen, and frozen fruit offers the same health benefits as fresh fruit.” These findings have contributed to an expected industry revenue increase of 1.2% in 2012.
In the past five-year period, the agricultural price index, which measures prices received by farmers for all US agricultural products, has grown at an average rate of 6.9% per year. This increase has lifted input costs for operators; however, due to strong brand and customer loyalty, some operators, including major players National Grape Cooperative and Dole Food Company, have passed this cost on to downstream buyers in the form of higher prices, raising profit margins. Smaller players are more prevalent in the industry, as enterprises with less than 10 employees make up the greatest share of firms. Concentration has been increasing over the past five years due to merger and acquisition activity. These acquisitions are mainly occurring among smaller firms that are aiming to expand their market reach and capitalize on economies of scale.
In the next five years, the industry is anticipated to experience slightly stronger growth, bolstered by advancements in the freezing process and a continually increasing emphasis on a healthy lifestyle. Demand and revenue will be hampered, however, by stronger competition from fresh fruit. Rising disposable income will allow and encourage consumers to buy more fresh fruit instead of opting for frozen fruit and juice from industry operators. In the five years to 2017, IBISWorld forecasts revenue to increase. For more information, visit IBISWorld’s Frozen Fruit and Juice Production in the US industry report page.
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IBISWorld industry Report Key Topics
This industry produces frozen fruit and frozen juices, including frozen concentrated orange juice, among other types. This industry excludes fresh fruit and other frozen products.
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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