A new report that surveyed over 200 US wholesalers, distributors and manufacturers in the food and beverage industry during February and April 2017 indicates that 83% of participants, on average, expect sales to increase 21% and net profits to rise 16% in 2017. Influencing this growth in sales are the growing popularity of private label foods, “free from” foods (i.e., gluten-free, allergen-free, nut-free, etc.) and healthier foods.

Large firms, defined as companies with more than $50 million in annual revenue, expect a 9% jump in sales and an 8% increase in net profits. Small firms, or companies with less than $50 million in yearly revenue, expect a 32% increase in sales and a 23% rise in net profits. Although 60% of respondents expect to increase employee numbers in 2017, with an average projection of a 14% increase, 80% indicated that they do not have plans to expand or change facilities. Seventy percent indicated no change in R&D expenditures and 87% forecast no change in M&A activity.

Although tax changes benefitting the food and beverage industry have been implemented, 61% of respondents do not plan to purchase any new equipment. Although these general results were true for both small and large firms, 45% of large firms plan to invest in new equipment compared to 34% of small firms. Priorities for companies in 2017 include cost of goods, food safety, knowledge and information sharing, and food quality. Major concerns cited by participants were food safety and traceability, as well as new federal regulations implemented through the Food Safety Modernization Act.

Source: Mazars