U.S. food and beverage manufacturers are set to enjoy an average cash windfall of $94,000 as they get back on track after last year’s overstocking crisis, this is according to The Cash Flow and Overstock Report by inventory management software provider Unleashed. The company is basing this after analyzing 381,000 products, ingredients and components stocked by more than  1,800 firms across North America, the UK, Australia and New Zealand. 

Jarrod Adam, head of product at Unleashed, says, “Firms last year were forced to stockpile in response to supply chain shocks. But that's had serious cash flow impacts. Now the challenge for many is freeing up cash flow as economic conditions tighten—and the good news is the money is there, when you look closely at the numbers.” 

The $94,000 figure from the report represents an average "overstock position" for U.S. food and beverage manufacturers—the difference in value between optimal stock levels for each different firm, versus the actual value of stock held. 

The breakdown of figures for each industry were as follows:


Average capital held in overstock (USD)

Beverages (alcoholic and non-alcoholic)




"It's a genuinely eye-opening number,” says Adam. “What we’re seeing here, really, is the cost of caution: a dollar value that shows where firms are, against where they could be while still doing business at the same levels.” 

Unleashed says the figures will be good news for many North American SMEs, especially those looking to improve the health of balance sheets ahead of the new financial year. However accountants are cautioning that the savings won’t apply to all.

Commenting on the figures, Maria Pearman, principal and beverage practice leader with GHJ, an advisory and accounting firm headquartered in Los Angeles, says, “There are two kinds of businesses affected by this news. If you have a relatively short cash flow cycle—if you turn over goods quickly and buy new stock all the time—then these savings are something you can bank straight away. Simply by adjusting each re-supply order down to where it should be, you immediately have more cash in hand.” 

But the situation will be different for many firms, adds Pearman. “These figures are calculated based on a ‘just in time’ approach and not everyone can work like that. Some businesses have to order in bulk at set times—or to get a better price. Others have been forced to stockpile by volatile supply chains.

“Companies in this boat will have longer cash flow cycles, and that means less opportunity to correct course on the purchasing side. For these people, acting on this new data might be more about selling excess stock before it’s obsolete.” 

Alex Townson, head of outsourced supply chain at FMCG food and beverage specialists YF, says, “Given the economic conditions we're facing at the moment it’s no secret that brands are being forced to free up some cash where they can. This obviously comes with some challengesparticularly for food and beverage brands where you need to be able to shift stock before it comes obsolete. 

“The good news is we are seeing that the demand is there. Our clients are continuing to grow at great pace and the extent to how quickly they can recover from their overstock position and free up cash really is going to depend on how fast moving their stock is and how short the payment terms they've negotiated with their retailers are. 

“Brands in this space are always likely going to err on the side of caution and maintain a slightly swollen stock position, but accurate forecasting and planning will be critical in order to get back to their business as usual position, with brands needing to have their finger on the pulse when it comes to their data.”

Ultimately, Unleashed’s Jarrod Adam believes the findings will make a real difference for product businesses pressured by inflation and supply chain shocks. Everyone who needs to hold inventory has had a tough few years, he saysand most of it’s been out of their hands. 

“It's all about finding ways to control the controllables,” says Adam. “That can mean anything from improving internal efficiencies, to using a more granular, data-based approach to rebuying.” 

The latter point is something he says he’s committed to delivering to his customers, by turning their business data into practical tools. 

“We know that unlocking cash flow is a priority for our customers ahead of this new financial year,” says Adam. “As a software company, it’s on us to help them do that.” 

For more information and for the full research, visit: https://www.unleashedsoftware.com/blog/cash-flow-overstock-report


The ideal stock levels used in this report levels were found using industry-standard formulas that examine the rate of sale against delivery lead times. All data points were unique to the different product lines analyzed, meaning the values generated were accurate for each company’s different circumstances. 

  • The figures showing cash flow potential held in overstock in this report were generated by comparing an "optimal" stock position vs the actual stock held by 1,886 firms In the UK, New Zealand, Australia, the U.S. and Canada.
  • Optimal stock positions were calculated individually for 381,000 different product and component lines (SKUs)
  • For each SKU Unleashed calculated a minimum and maximum stock level based on rate of sale (or use) and lead time from suppliers. Minimum stock levels were set to actual average lead time, plus seven days. Maximum stock levels were based on this minimum stock level, plus 28 days.  
  • All figures were calculated based on the last 12 months of actual lead time and rate of sale (or use) data.
  • Firms in the study were all manufacturers, manufacturer wholesalers or manufacturer retailers of under USD$25 million in turnover.
  • It should be noted that reasons for holding overstock vary from firm to firm, and individual circumstances will always determine if companies can release the cash flow held within overstock.