Food manufacturers are optimistic about future growth: report
A new international study released in Montreal this week finds food and beverage companies expect revenues and profits to increase
Montreal – Food processors are optimistic about the future and most of them expect to see growth.
That’s one of the findings from a new report called A Hunger for Growth: Food and Beverage Looks to the Future. The report was just released by Grant Thornton International Ltd.
The report is an international study with a Canadian perspective and was also released by Raymond Chabot Grant Thornton during a conference organized with the Conseil de la transformation agroalimentaire et des produits de consommation.
The study finds an improved global economic outlook is creating a favourable climate for the food and beverage sector.
In fact, the new-found optimism from producers in the sector is leading 90 per cent of them to expect revenues to increase in the near term.
The vast majority of them also expect profits to increase, with 25 per cent expecting double-digit growth in product sales.
“Food and beverage companies are fired up. After a few challenging years, business leaders are anticipating a period of growth and increased investment,” says Guy Barthell, partner in the Strategy and Performance Consulting Group and agri-food specialist with Raymond Chabot Thornton.
“The focus for investment is on efficiency gains to ensure that profitability keeps pace with growth and on new product development in order to cater to changing trends and tastes in Quebec, in Canada and, increasingly, in newer markets. Furthermore, a future free trade agreement with the E.U. suggests that new export avenues could be explored, albeit with a number of challenges that Quebec producers will need to prepare for,” adds Barthell.
Other findings from the report include:
-Overall 64 per cent of Canadian firms expect that investment in plant and facilities will increase over the next 12 months
-83 per cent of global producers expect investment in equipment to rise over the next year, with Canada slightly higher at 90 per cent
-84 per cent of Canadian producers plan to increase their product development investment
-75 per cent of Canadian respondents list access to a skilled workforce as a key growth driver
-64 per cent says new technology
-52 per cent say quality of suppliers
-50 per cent say exports
-39 per cent say new equipment
Constraints to growth
-60 per cent of Canadian firms say the power of retailers
-42 per cent say challenges finding skilled workers
-40 per cent say government regulations
Food and beverage trends
-39 per cent of Canadian respondents say organic foods will have a positive impact
-53 per cent of Canadian firms say ethnic product trends will have a positive effect
-69 per cent of Canadian respondents are more likely to expect positive effects from premium and luxury food and beverage trends
-31 per cent of Canadian respondents see private label brands as having a positive effect
Impact of government
-45 per cent of companies in Canada predict that food labelling regulations will have negative effect on their organization
-37 per cent of Canadian companies see traceability as having a negative effect
-84 per cent of companies in Canada will use a corporate website to market
-48 per cent will use print advertising over social media (42 per cent)
-Eight per cent of companies are likely to use Twitter
To view the complete study, click here.