Operators have introduced healthier and organic products to fight competition.
New York, NY (PRWEB) April 19, 2014
The Canned Fruit and Vegetable Processing industry suffered from declines in demand for canned fruit and vegetable products during the five years to 2014. According to IBISWorld Industry Analyst David Yang, “Repressed discretionary income in the years following the recession and higher product prices, driven by inflationary input costs, caused demand for industry goods to significantly decline in 2010.” Furthermore, growing health concerns have caused consumers to grow wary of consuming processed fruits and vegetables, further curbing the demand for industry goods. Additionally, improvements in transportation and storage technologies have made fresh produce more readily available, which increased competition from fresh fruit and vegetable producers. Overall, revenue is estimated to decrease at an average annual rate of 1.7% to $38.5 billion during the five years to 2014, including a decline of 1.7% in 2014.
Despite overall lower demand for industry goods, product innovations, including the introduction of a greater variety of organic canned food products, have helped decelerate the industry's decline. Producers also reformulated many products by reducing fat, sugar and sodium content to appeal to a growing number of health-conscious Americans. While the promotion of healthy canned food has benefited the industry, the growing popularity of imported canned food and sauces has placed downward pressure on industry revenue growth. At the same time, exports have risen partially due to the growing popularity of American food abroad. Similarly, the rising costs of fresh fruits and vegetables in countries such as Japan has made US processed food more affordable than domestically produced goods in certain markets.
During the five years to 2019, higher per capita disposable income and health concerns will push consumers to purchase more fresh produce rather than processed alternatives, contributing to the industry's decline. “Competition from imports is forecast to intensify as Americans increasingly seek ethnic food products and as the dollar appreciates, making foreign goods more affordable in the domestic market,” says Yang. Also, as profit margins remain low due to rising input costs, particularly among smaller companies, the number of enterprises is anticipated to fall over the five years to 2019. Overall, revenue is forecast to decline during the next five years.
The canned fruit and vegetable processing industry exhibits a low level of market share concentration. It is difficult for a single company to control a large share of the overall market because this industry includes a variety of product segments. Furthermore, a majority of enterprises in this industry are small- to medium-sized companies that employ less than 100 people. Industry concentration has slightly increased in the five years to 2014 as larger companies found it beneficial to diversify their product portfolios through acquisitions. IBISWorld expects concentration to increase over the next five years as larger companies capitalize on expanding logistics and distribution technologies to boost efficiency.
For more information, visit IBISWorld’s Canned Fruit and Vegetable Processing in the US industry report page.
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IBISWorld industry Report Key Topics
Operators in the canned fruit and vegetable processing industry purchase fruits and vegetables and process them with other ingredients to create a variety of food products including canned juices, canned soups (except seafood), jams, baby food, sauces and dehydrated fruits and vegetables. The final products are then packaged and sold to consumers at various retail channels.
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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