Revenue will increase as firms target health-conscious consumers
Los Angeles, CA (PRWEB) April 18, 2012
The Cookie, Cracker and Pasta Production industry has fought an uphill battle with consumer trends in the five years through 2012. The era of health, nutrition and convenience ushered in new consumer tastes, and producers have had to adapt quickly to remain relevant. According to industry analyst Mary Nanfelt, “an emphasis on healthy eating and living has adversely affected demand for the industry's products, especially for sugar-rich cookies and high-carbohydrate pasta products.” Furthermore, the changing composition of the average American household and periods of unsustainably high input prices have led to changing profit margins. Despite all these challenges, the industry has fared quite well. While sales slowed at some points, overall industry revenue is expected to grow by an average annual rate of 2.2% from 2007 to 2012. For 2012 alone, revenue is anticipated to increase 1.6% to $22.6 billion. As Americans continue eating healthy, many will steer away from cookies, but others will continue to purchase pasta and cracker products.
While modest, the industry's prospects present some niche opportunities. The high-margin cookie segment often incorporates healthy ingredients, which is ideal for the new-age, adult consumer. Nanfelt says, “the reduction in the number of the households with children under 12 also provides room for innovation and new products.” However, high input costs will slightly offset these niche growth opportunities. The prices of sugar and wheat, key ingredients in industry products, are expected to rise in the next five years, though at a slower rate than in the previous five years. In the five years to 2017, IBISWorld projects that revenue will increase at a modest annualized rate.
The Cookie, Cracker and Pasta Production industry's revenue is expected to grow from 2012 to 2017, but the number of establishments is set to shrink. With such a competitive market, firms will increase technology to reduce costs. With more advanced technology, production will be more efficient and companies will need fewer establishments for manufacturing. From 2012 to 2017, establishments are anticipated to decline at an average of 0.2% per year to 763. The industry has a low level of market concentration. Concentration increased slightly because of increased growth for some major players, along with many firms exiting the industry during the recession and 2010. Also, the industry experienced some merger and acquisition activity. For instance, the Kellogg Company acquired assets of IndyBake, which expanded the company's product offerings. Furthermore, Kraft Foods acquired Cadbury in 2010.
For more information visit IBISWorld’s Cookie, Cracker and Pasta Production in the US industry page
Follow IBISWorld on Twitter: https://twitter.com/#!/IBISWorld
Friend IBISWorld on Facebook: http://www.facebook.com/pages/IBISWorld/121347533189
This industry makes products from ingredients purchased from other food manufacturers. These ingredients may include flour, sugar, starch, salt and seasoning, emulsifiers, flavorings, syrup, preservatives, additives, gluten, vitamins and food acids. The end-products are then packaged and distributed to grocery wholesalers, supermarkets, specialty food stores and food service contractors for human consumption.
IBISWorld industry Report Key Topics
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.