The price of food cutting machinery is forecast to increase due to rising downstream demand.
Los Angeles, CA (PRWEB) January 08, 2014
Food cutting machinery has a buyer power score of 3.0 out of 5.0. Factors that are expected to negatively impact this market's buyer power score in the three years to 2013 are increasing input costs, freight and gasoline costs. These cost increases prompted suppliers to raise the price of food cutting machinery. However, factors that are expected to contribute positively to buyer power are low switching costs and a moderate level of product specialization. According to IBISWorld procurement analyst Jeffrey Cohen, “the price of food cutting machinery is expected to increase at a low rate during the three years to 2013 as the economy continues to recover from the damaging effects of the recession”. When the economy started to recover from its lowest point, demand among the key buyers such as restaurants and hotels increased because consumers started spending more money at these establishments. As demand increased, distributors responded by increasing prices to expand slim profit margins. However, rising input costs prevented any significant increases in profit margins.
In the three years to 2013, distributors experienced a variety of problems that negatively affected buyers. As the world price of steel, a key input into the production of food cutting machinery, increased during the period, manufacturers passed this cost on to distributors in the form of higher product prices. In addition, freight costs and the price of gasoline increased as well, and distributors passed these costs on to buyers by increasing the overall price of food cutting machinery. “These trends have reduced negotiation power for buyers because they have caused distributors to achieve lower profit margins than before the recession, making distributors less willing to negotiate”, says Cohen.
Despite these strains on buyer power, the fact that food cutting machines are homogenized products positively affects buyer negotiation. Because there are hundreds of suppliers of food cutting machinery throughout the retail, wholesale and manufacturing channels, buyers have a wide selection of suppliers to choose from. In addition, when a buyer wants to switch suppliers, this is a relatively easy task because several distributors purchase products from the same manufacturer. The top four vendors in the market are Wasserstrom Company, Clark Associates, TriMark USA and C&T Design & Equipment Co.
For more information, visit IBISWorld’s Food Cutting Machinery procurement research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to help buyers of food cutting machinery. Suppliers provide a variety of machinery including dicing, slicing, chopping and grinding machinery. Food cutting machinery is sold through sales channels such as direct sales, mail-order sales, on line sales, retail sales and wholesales, with direct sales being the most common. Restaurants, hotels, supermarkets and educational institutes are the main buyers of these products. Products excluded from this report include food cooking and preparation machinery.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Vendor Financial Benchmarks
Buying Lead Time
Key RFP Elements
Buyer Power Factors
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IBISWorld is one of the world's leading publishers of business intelligence, specializing in Industry research and Procurement research. Since 1971, IBISWorld has provided thoroughly researched, accurate and current business information. With an extensive online portfolio, valued for its depth and scope, IBISWorld’s procurement research reports equip clients with the insight necessary to make better purchasing decisions, faster. Headquartered in Los Angeles, IBISWorld Procurement 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.