Los Angeles, CA (PRWEB) April 23, 2014
Food and beverage cans have a buyer power score of 3.6 out of 5. The score means that buyers have slightly more power in negotiations than suppliers. According to IBISWorld procurement analyst Jeffrey Cohen, “on average, suppliers only increased the price of food and beverage cans at an annualized rate of 0.9% during the three years to 2014.” Suppliers slightly increased the price of their products to attract recession-weary buyers. Factors that boosted buyer power include a low level of product specialization and low switching costs.
The price of food and beverage cans is increasing at a low rate during the past three years, even as the economy slowly recovered, thereby increasing buyer power. While a growing number of consumers spent more money on canned beverages and food, demand among key buyers remained low due to the toll the recession took on several of them. Also, manufacturers were hit with a variety of problems during the past three years that negatively affected them, but benefited buyers. The world price of aluminum and steel, which are key inputs in the production of food and beverage cans, experienced high volatility. Typically, high input volatility has a negative impact on buyers, but manufacturers largely absorbed these costs while only slightly raising prices for key buyers to promote demand. In addition, freight costs and the price of gasoline increased during this time and manufacturers largely, albeit not completely, absorbed these costs. “These trends increased negotiation power for buyers because suppliers competed against each other to provide them with low prices,” says Cohen.
Buyer negotiation power is positively affected by the fact that food and beverage cans are standard products. Because there are more than 1,000 suppliers of food and beverage cans in the wholesale and manufacturing channels, buyers have a wide selection to choose from. In addition, when a buyer wants to switch suppliers, this is relatively easy because several suppliers provide these products and have vast experience serving buyers in various industries. The largest vendors in the market are Ball Corporation, Crown Holdings Inc., Silgan Holdings Inc., and Rexam PLC.
For more information, visit IBISWorld’s Food and Beverage Cans procurement category market research report page.
Follow IBISWorld on Twitter: https://twitter.com/#!/IBISWorld.
Like IBISWorld on Facebook: http://www.facebook.com/pages/IBISWorld/121347533189.
IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of food and beverage cans. Food and beverage cans are made of metal, tin and aluminum and used for food and beverage packaging. Food and beverage cans are sold by metal can and container manufacturers and food packaging wholesalers. This report excludes other packaging cans, such as aerosol, paint, varnish and fiberboard cans.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Buying Lead Time
Key RFP Elements
Buyer Power Factors
About IBISWorld Inc.
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.