As more consumers become health-conscious, producers will aim to introduce healthier products
Los Angeles, CA (PRWEB) April 12, 2013
The Cookie, Cracker and Pasta Production industry benefited from increased demand for cookies and crackers during the past five years as household disposable income increased, which offset declines in pasta consumption. As the price of wheat and sugar increased, many large and established industry producers have been able to pass on cost increases to consumers in the form of higher product prices, driving revenue growth. “Many small- to medium-size companies, however, were unable to pass on cost increases to consumers without severely damaging demand and either merged with larger companies or exited the industry,” says IBISWorld industry analyst Jeffrey Cohen. This trend caused the number of enterprises to decrease at an average annual rate of 0.5% to 671 in 2013. Overall, IBISWorld expects industry revenue to rise a mere 1.7% annually on average during the five years to 2013 to total $23.5 billion; this includes growth of 0.6% from 2012 to 2013.
During the past five years, foods with high sugar content were increasingly linked to diabetes and other preventable diseases in the media, making consumers more aware of the negative health effects that can occur from eating too many cookies and crackers. Producers quickly adapted to changing consumer tastes by offering more healthy options, such as whole grain crackers and reduced calorie snack packs for cookies and crackers. “Companies successfully charged a premium for these products because consumers perceived them to be of higher quality than generic brand products,” adds Cohen. “The success of these healthier options raised demand for Cookie, Cracker and Pasta Production industry products, expanding profit in 2013.”
The industry has a moderate level of market share concentration; concentration increased slightly over the past five years due to mergers and acquisitions among industry operators. For instance, major player Kellogg Company acquired IndyBake Products LLC. And Brownie Products Co. in 2008, expanding the company's product offerings and market reach. Concentration also increased among the major players as smaller companies exited the industry during the recession.
The industry's future prospects look bright, with faster revenue growth anticipated through the five years to 2018, compared with the previous five years. Forecast increases in household disposable income will drive demand for cookies and crackers. Additionally, as the number of health-conscious consumers continues to grow, producers will introduce a greater variety of healthier product options for cookies and crackers, which will increase demand for industry products. Furthermore, price increases for wheat are anticipated to provide an additional boost to industry revenue. As a result, revenue is projected to grow during the five-year period to 2018. For more information, visit IBISWorld’s Cookie, Cracker and Pasta Production in the US industry report page.
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IBISWorld industry Report Key Topics
This industry produces cookies, crackers and pasta from purchased ingredients, such as flour, sugar, salt, seasoning, emulsifiers, flavorings, syrups, preservatives, gluten and food acids. The final products are then packaged and distributed to grocery wholesalers, supermarkets, specialty food stores and food service contractors.
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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