Food and beverage companies feel the effects of a sour economy, though industry professionals see opportunities in market shifts.
Throughput gains at North American food and beverage plants this year are expected to be about a third of the levels two years ago, with the proportion of facilities registering a loss in production triple the rate of 2007. At the same time, spending for production, packaging, process control equipment and professional services is shrinking. Manufacturing assets will claim 17% of the typical plant budget, the lowest share in five years. The high water mark was 2007, when manufacturing assets accounted for 23% of spending.
Like healthcare and other vital services, food and beverage enjoys a built-in cushion against recessions and other economic disruptions. Food and beverage retail sales may gain share over food service volume in tough times, but both channels rely on manufacturers for the products they sell. Still, the industry is not immune to economic difficulties, and food and beverage professionals are feeling the pinch.
Though capital budgets aren’t shrinking, they are growing at a much slower rate, according to Food Engineering readers who answered this year’s State of Food Manufacturing survey. The proportion of companies adding engineers to their staffs dipped to 10%, the lowest level since 2002, the last time manufacturing was pulling out of an economic downturn. One in seven firms is downsizing its engineering staff, the highest ratio since 2004. Yet food and beverage companies continue to invest in their infrastructures and processes and adjust to growth opportunities.