Resilient Food Industry a Reason for Optimism

Our Manufacturing Survey shows the resilience of the food and beverage industry.

By Dave Fusaro, Editor-in-Chief

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The economic crisis obviously is deeper than just high-risk mortgages and car makers and has gripped the entire world. Even China’s growth is slowing to a halt. And the week I write this, the head of India’s Satyam Computer Services admits to Enron-like overstatement of earnings and assets.

But a new president will move into the Oval Office. Lifelines have been tossed to key industries and companies, and those should start paying off shortly. It’s doubtful things can get any worse than they were in the waning days of 2008.

So think in terms that we’ve hit bottom, you’ve survived the worst and things are only going to get better. Attitude is half the battle.

Our Annual Manufacturing Trends Survey was taken during perhaps the darkest days, during the month of November. Despite a lot of caution and a fair amount of anxiety expressed in it, there’s also resilience and optimism. Our report can be found by clicking over to 2009 Manufacturing Trends Survey: Economy Ahead, Proceed with Caution!

Looking at a couple of questions, you have to ask if the glass is half full or half empty. When asked “How has the economy affected your plant?” exactly half answered “not much.” Which, however, means the other half checked off layoffs, reduced production and closing of facilities.

“How is your company dealing with the economy?” Forty percent said “no great changes” and another 20 percent actually answered “we’re growing.”

When asked how they anticipate production changing this year, 30 percent said it would stay about the same and 57 percent predicted growth – 12 percent foresee growth above 20 percent. Only 13 percent predict decreases.

Generally, the most common answer in several questions about growth or contraction was “stay the same.”

Maybe most importantly, we asked “How do you feel going into 2009?” Forty-three percent said optimistic, 22 percent said pessimistic; a third were neutral.

Those may not be the most positive signposts for the new year, but frankly they’re more buoyant than I expected. 

Which is not to say the collective food industry feels immune to the economic downturn. “The economy is slow and appears to be continuing to slow down. What can we produce that will be consumed at a rate that will give us profit?” wrote one respondent. “I think the challenge for us is to find the correct products for today’s consumer and to plan for tomorrow’s consumer.”

The economic toll on the food industry has taken some company leaders in recent weeks. Clint Rivers resigned after just nine months of heading Pilgrim’s Pride, which filed for bankruptcy protection. You gotta believe economic turmoil was behind the sudden resignation of Dick Bond after several years of heading Tyson Foods.

But it’s a new year with a new administration in Washington. People gotta eat, so stay the course. But to paraphrase one of our survey respondents: What can you make that people will buy and eat even in times like these?

Who’s got the best R&D team?
Speaking of inaugurations, a new feature we’re planning this year is an R&D team of the year. Actually, we’re shooting for three, in three different size categories: less than 250 employee, 250-499 employees and more than 500 employees. And you get to nominate and vote on them.

More details are spelled out on p.30. But generally, go to our web site, or directly to www.foodprocessing.com/nominate. Now through about Feb. 28, you can nominate a food or beverage processor’s R&D team in any or all of those categories. After March 3, you can vote for the finalists in each category. Then we’ll profile the winning teams in our July issue.

Don’t be modest: It’s OK to nominate your own team. Any questions, shoot me an e-mail.

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