Revived demand from restaurants and grocery stores will support marginal growth
New York, NY (PRWEB) May 29, 2014
Consumers often view frozen foods as either nutrient deficient and inferior to fresh foods, or as time-saving options that are simple to prepare. The Frozen Food Wholesaling industry, along with its assistance groups, aims to capitalize on the latter view. As consumers become increasingly busy, yet remain cost-conscious, the need for convenient meals has bolstered demand for industry products, both in the form of frozen meals for home consumption and frozen inputs to fast-food and quick-service meals. Nevertheless, the industry has experienced only slow growth during the five years to 2014, primarily due to escalating competitive pressure. IBISWorld expects industry revenue to grow just 0.3% per year on average to $96.3 billion in 2014.
According to IBISWorld Industry Analyst Jocelyn Phillips, “Frozen foods manufacturers are lobbying hard for consumer respect and attention, but product perception is only one issue threatening consistent revenue growth for the Frozen Food Wholesaling industry.” Merchant wholesaling in the United States is largely collapsing because of the costs associated with having a middleman. As processors and retailers attempt to maximize shrinking profit, they increasingly do business with each other directly. Major manufacturers have established wholesaling divisions known as manufacturers' sales branches and offices, whose advantages of scale and established relationships have made the market increasingly difficult for independent wholesalers that have had to turn to niche products and markets to stay competitive.
Fortunately for the industry, this structural shift will likely strengthen average industry profit. “Competition has driven consolidation across the industry, with operators looking to expand operations, increase market share, reduce costs and achieve higher margins,” says Phillips. As new product development keeps interest in frozen foods afloat at supermarkets and restaurant chains, IBISWorld expects revenue to grow in the next five years. However, the growing popularity of organic, natural and fresh foods will likely keep this growth minimal: Frozen Foods Wholesaling revenue is expected to stumble in 2014, precipitating slower revenue growth during the next five years.
For more information, visit IBISWorld’s Frozen Food Wholesaling in the US industry report page.
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IBISWorld industry Report Key Topics
Operators in the Frozen Food Wholesaling industry primarily wholesale packaged frozen foods, excluding dairy products. Wholesaling in this industry involves the resale of frozen food products to downstream sectors, including restaurants, food-service outlets, grocery stores and other retailers and wholesalers. Products include packaged frozen meats, poultry, seafood, fruits and vegetables, juice, bakery products, pizzas and other frozen meals.
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