Demand for premium-priced healthier popcorn is driving the industry's growth
Los Angeles, CA (PRWEB) January 14, 2013
Popcorn consumption dates back thousands of years to Native American tribes eating Zea mays everta (corn grain) seeds and using it in necklaces and headdresses. However, popcorn did not become a mainstream snack until the Great Depression, when it soared in popularity due to its affordability. Since then, the United States has become the top producer and consumer of popcorn worldwide. Domestic popcorn demand peaked in the early 1990s with the growth of the microwave popcorn segment and has remained stable since. The Popcorn Production industry has recently faced multiple challenges. Most notably, consumers tightened spending during the recession, cutting demand for nonessential purchases like popcorn. Additionally, health-conscious consumers became wary of eating caloric and high-sodium flavored popcorn. Nevertheless, the industry remained resilient due to major companies' ability to quickly adapt to changing consumer preferences by introducing healthier product lines. “Furthermore, consumers continue to regain disposable income as the economy recovers, driving demand for premium-priced healthier and organic popcorn products, with revenue expected to grow 2.8% in 2013,” says IBISWorld industry analyst Agiimaa Kruchkin. Over the five years to 2013, industry revenue is forecast to grow at an annualized rate of 2.1% to $1.1 billion.
Industry operators also benefited from effective marketing, which solidified companies' brand-name reputation. “Producers are charging premium prices for their products' perceived superior quality and are growing their pool of customers willing to pay these high prices,” continues Kruchkin. Major producers' ability to charge a high price also allowed them to maintain profitability despite rising input costs. The price of corn, for example, skyrocketed 58.0% in 2011 on the back of biofuel demand, yet popcorn producers were able to raise prices, allowing revenue to grow 1.9% in the same year. Innovative technologies also cut labor costs, further boosting profit. The Popcorn Production industry has a moderate-to-high level of market share concentration. The industry is dominated by major companies ConAgra Foods Inc. and Diamond Foods, while others hold smaller portions of market share. Concentration is expected to have increased slightly over the past five years, as the number of enterprises has fallen at an average annual rate of 2.2%. Concentration is expected to continue to grow further in the next five years as well.
The industry is expected to continue growth by increasing investments in technology to develop new flavors and healthier products. Although certain commodities and downstream markets are susceptible to volatility, this industry is able to weather the storm because popcorn is a staple in the American diet. Therefore, revenue is forecast to grow during the five years to 2018. For more information, visit IBISWorld’s Popcorn Production in the US industry report page.
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IBISWorld industry Report Key Topics
Companies in this industry produce popcorn, including microwaveable, ready-to-eat and unpopped popcorn.
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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