Details

  • Service: Tax, Mergers & Acquisitions, Advisory
  • Industry: High Growth Markets, Mid Market, Private Equity, Food, Drink & Consumer Goods
  • Type: Survey report
  • Date: 10/17/2011

Food & Beverage Executives Eye Acquisitions to Add Customers, Spur Growth 

Food & beverage industry executives see moderately improved revenue and profitability this year and expect better conditions in 2012, according to a recent KPMG LLP pulse survey. The biggest drivers of revenue growth over the next one to three years will include retaining and adding new customers, expansion in core/new markets, and product innovations.
Food and Beverage Executive Survey: Executives to Pursue M&A for Growth
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Notably, industry executives will step up merger and acquisition activity and they have the cash to do so.

Food & beverage executives indicate pricing pressures as the most significant growth barrier they are facing, followed by volatile commodity and input prices and labor costs. They also identify costs of inputs and discounting as the greatest threat to profit margins.

Other key findings from the sector include:

  • On average, respondents do not predict a full U.S. economic recovery until 2013-2014. This is a longer time line to recovery when compared to their responses in last year’s survey, when they predicted a recovery by June 2012
  • Executives see a gradually improving jobs picture, as they expect to keep headcount relatively the same or increase slightly next year. One of out every five respondents indicate that they do not think headcount would ever return to pre-recession levels.
  • More than half of respondents indicate that their companies will increase capital spending over the next year on acquisitions and new products and services
  • Respondents identify investing in organic growth, improving operation processes and related technology, and cost reduction as their top initiatives over the next two years