Though food and beverage products in general are necessities, the industry’s trajectory through the pandemic has had ups and downs, according to Dave Fusaro, editor in chief at Food Processing magazine. Fusaro was one of the featured presenters at the VMA/Hydraulics Institute Market Outlook Workshop August 5 and 6.
“Big Food” companies (the big-name organizations in the industry) have lost sales in recent years, some of it going to upstart, entrepreneurial companies serving up selections such as natural and plant-based foods. At the same time, these bigger companies have been quietly buying up some of their small competitors.
When the pandemic hit, the situation evolved. Some segments of the industry did well; some were hit hard. Those that concentrated on the food service industry were hurt badly while those producing comforting and convenient food for home showed upticks and, in some cases, surprising growth. Fusaro gave a few examples:
- Canned soup was briefly up 200% and still was up by an impressive 22% as of the market outlook.
- Frozen foods were up 40% in the 11 weeks ending May 16.
- Flour purchases increased by 73% in the same 11-week period.
- Egg sales went up 42% for a period but returned to normal after that.
Another development with food was an increase in online sales. In June, Nielsen reported an increase of 58% for such sales during the pandemic and about 26% of those respondents indicated they would continue buying food online.
Some food processing facilities, notably meat processing plants, have had to close because of employee COVID-19 infections. Meanwhile, plant-based meat substitutes have been working their way into American diets, even in fast food. Fusaro reported that the meat/animal protein business may have difficulty coming back to previous levels.
In the stock market, many food companies have experienced a bump up in share price, Fusaro said.
“Food sales growth is perpetual but unexciting,” Fusaro said, growing usually at about a 2% rate or “Maybe in a good year 3%.” But many of the Big Food companies that took a hit earlier were already back in line at the time of the workshop, and while smaller food companies are struggling, that’s where the innovation is.
Fusaro predicted the food and beverage industry of the future will face these upcoming challenges: new nutrition fact labeling, the 2020 dietary guidelines, progress on cannabis and CBD; the trend toward plant-based “everything” and lab-created meats.
“The trends and tactics may be different, but one thing is for sure: there will always be a food and beverage industry. Which is good news for you folks,” he told the audience.
The upcoming Fall issue of VALVE Magazine features many other forecasts of what’s to come for end-user industries of valves and related equipment.