Industry study Food & Beverages 2011
Commodity prices direct market development
There is no breathing space for the German food industry: the prices of many raw materials have reached astronomical heights - further increases seem inevitable. Major domestic markets are saturated, growth in young foreign markets is limited by brand awareness. A market shakeout is programmed. But which strategies can companies still use to free themselves from the cost trap? What options do you have in the "sandwich position" between price and cost pressure? The current industry study "Food & Beverages 2011" by Dr. Wieselhuber & Partner (W&P) in cooperation with West LB.
The results show an unvarnished picture of the situation in the industry: Smaller companies in particular will increasingly struggle to survive as a result of rising raw material prices and saturated markets. Putting the strategic orientation to the test is a must for all players - regardless of the size of the company. This is the conclusion of the survey conducted from March to June 2011 among 29 top managers in the food and beverage industry. Those involved - 82 percent manufacturers and 18 percent traders - answered questions on hot topics and trends in the industry in in-depth interviews.
Accordingly, rising raw material prices are almost certain: 95 percent expect further price increases for raw materials and expect the markets to remain highly volatile. Responsible for this are above all the increasing demand for agricultural raw materials as a result of population growth, crop failures due to environmental influences and the significant increase in the use of raw materials for energy production. The most important measure taken by manufacturers in response to the development of raw material prices: price increases (94 percent). Retail is much more reserved here (67 percent). The unwillingness of consumers to spend more money on groceries and the price competition among the players are slowing down the passing on of prices to customers. One thing is clear: Large manufacturers in particular with a corresponding brand bonus will find it easier to "pass" the higher prices on to retailers.
70 percent of those surveyed see correspondingly small or medium-sized companies with a focus on end-product manufacture - mostly with a high material quota and at the same time low market share - as victims of a market shakeout. "As a rule, smaller players lack the necessary resources to adapt their value-added model. They are virtually trapped in their value-added chain - buying raw materials, processing them, selling them," says Dr. Timo Renz, industry expert and head of studies at W&P. In addition, these companies are only of secondary importance for retailers and suppliers and are therefore easy to replace.
The developments on the raw material markets accelerate, among other things, the internationalization tendencies - access to regional raw material sources and suppliers play a major role. In addition, since the German food and beverages market has been stagnating for years, 96 percent of those surveyed see internationalization as the most important strategic growth measure. dr Renz: "The expansion tendencies will not lose momentum in the medium term either. On the contrary: The use of resources to conquer foreign markets will intensify in order to absorb the stagnating domestic business." Export and foreign activities are currently focused on sales markets in the EU and Russia.
"Not all companies will be able to react appropriately to the developments on the raw materials and sales markets and realize the growth opportunities that still exist, for example by re-segmenting the markets. These owners must not stick their heads in the sand, but have to think about selling the company, for example," advises Renz.
Source: Munich [ RHIuIFdpZXNlbGh1YmVyICYgUGFydG5lciBHbWJI ]
