Editor's Plate: Unabashed Signs of Optimism

Jan. 15, 2010
A couple of our surveys – but more importantly, real results from General Mills and other processors – point to a strong 2010.

I do tend to be a bit of a cheerleader when it comes to the economy. But there have been numerous voices in the food & beverage industry other than mine heralding the economic boom that is just about to sound.

More surveys on the way

As I said above, we do a lot of surveys at the turn of each new year. That pace continues as we start 2010. Two immediately come to mind.

  • Our Readers’ Choioce Awards already are well under way, but we could use a few more votes before we close things down. This is a vote for your favorite suppliers. In addition to our e-mail method of polling, we’re also voting on our web site. We’ve developed a way to weed out vendors voting for themselves. So go to http://bit.ly/rcaequip or http://bit.ly/rcaingred.
  • We’ve also just begun a poll for our second annual R&D Teams of the Year. Last year’s voting was an incredible success – 1,555 of you voted on our web-based form. It’s a two-step process, starting with nominations. We look for nominees in three sizes of company: small (less than $100 million in sales),medium ($101-500 million) and large (more than $501 million). It’s OK to nominate your own company.We’ll take nomations through the end of February. In March, we’ll announce our finalists and ask you to vote again among them. The R&D teams will be profiled in our July issue. The 2009 R&D Team winners winners were General Mills, Kettle Foods and Peas of Mind. Wouldn’t you like to see your R&D team on this list? Go to www.FoodProcessing.com/nominate.

For me, it started in our December issue when we were writing about Nestle USA as our Processor of the Year. In the anufacturing-oriented story, Allan McIntosh, Nestle’s senior vice president of technical and manufacturing, told us he thinks the era of restructuring, which even predated the recession, has run its course. It’s giving way to a “really exciting” period that will let Nestlé refocus on “growth and investment and on the development of appropriate technologies.”

He said he’s optimistic and sees “even more potential now to develop our manufacturing operations and deliver improvements in performance than we’ve delivered over the last 10 or 15 years.” Nobody forced him to say that.

About the same time, we were conducting a joint survey with accounting firm Grant Thornton. Titled Reflections and Projections, it was a management-level survey looking back at the lessons of 2009 and ahead at what 2010 could hold. Eighty three percent of its respondents foresee an increase in revenues in 2010 over 2009, only 9 percent see a decrease. The numbers are very similar regarding profits. Asked when they thought their business would return to pre-recessionary levels, 32 percent said it already had; 9 percent said by end of March, 14 percent by end of June and 35 percent by the end of this year.

Shortly after we closed that survey, we took our annual Manufacturing Trends Survey (my apologies – we do a lot of surveys on the cusp of the year). I expected doom and gloom or at least caution. But 66 percent of respondents said they were optimistic going into the new year; only 7 percent are pessimistic.

An astonishing 68 percent of respondents project some increase in production next year; 16 percent foresee increases of 20 percent or more. Only 8.6 percent expect a decrease. Significant majorities predict maintaining or increasing staffing levels, production lines and salaries.

Yeah, yeah, it’s all hopelessly optimistic survey-takers.

Where is any proof?

The proof is in the news story  What Recession? General Mills Quarterly Profit Up 50 Percent And that leap didn’t come after a disappointing year-earlier quarter. The Big G company earned $566 million in the quarter ending Nov. 29, 2009; it made a respectable $378 million a year earlier. By the way, a day or two later, ConAgra came in with quarterly financials that beat Wall Street expectations.

I guess I should temper all that giddyness in some way. Our cover story this month, “A Look Into the Future,” acknowledges the weaknesses as well as the strengths in the categories within the broad food & beverage industry. It identifies the opportunities in the year just under way, but also warns of some pitfalls.

It may not turn out to be the easiest year, but 2010 certainly looks to be better than 2009. The recovery is under way; do your part to capitalize on it.