Positive Outlook For Foodservice Packaging

Convenience stores are listed as one of the top five market segments survey respondents consider to have strong potential growth for packaging in 2011.

The results of the Foodservice Packaging Institute (FPI)’s “Foodservice Packaging Industry Surveys” indicates a growing enthusiasm within the industry for 2011.

The annual surveys gauge the state of the industry among top manufacturers and their suppliers in North America and Europe, as well as their customers.

Survey results found that 88% of foodservice packaging manufacturers in North America expect their sales volume to be better this year. This is up from 75% who reported better sales volume in 2010. The surveys also found that 81% of North American manufacturers expect their profits to be better in 2011 versus 40% of respondents who indicated better profits for 2010. In Europe, 75% of respondents are expecting volumes to be higher and 33% anticipate profits to be better than last year. Eighty percent of North American raw materials suppliers and 50% of machinery suppliers surveyed also indicated better expectations for both sales volumes and profits in 2011.

Respondents indicated expansions were planned for 2011, with nearly half of North American manufacturers and suppliers suggesting expansions to existing plants in North America.  In Europe, almost three quarters of respondents plan expansion to existing facilities located in Europe.

According to survey results, acquisition of machinery is a priority in 2011, with 81% of manufacturer respondents planning to purchase new machinery and 18% of respondents looking to obtain used machinery. In Europe, 44% of manufacturer respondents suggested plans to purchase new machinery and 11% would seek out used machinery.

“Our industry has weathered the storm of the last couple of years. Respondents seem more optimistic and are positioning themselves to handle potentially greater volumes as foodservice sales slowly recover. Manufacturers are making investments in the future, certainly a sign of good things to come,” said FPI President Lynn Dyer.

Survey respondents indicated they believe fast-casual restaurants will see strong growth in single-use packaging usage in the next five years, followed by quick service restaurants. Hospitals, convenience stores and catering rounded out the top five market segments respondents considered to have strong growth potential.

While there is enthusiasm about the future, foodservice packaging manufacturers and their suppliers also see challenges ahead. Five common issues ranked in the top 10 for the both the European and North American foodservice packaging industry respondents:

1.            Increasing raw material costs

2.            Margin compensation

3.            Global economic recession recovery

4.            Development of new products in response to calls for “sustainable” packaging

5.            Government regulations

Customers of the foodservice packaging industry are also more optimistic this year than they were in 2010. Over three quarters of the North American foodservice operator respondents expect better sales this year. This is an increase from the 43% of respondents who reported better sales for 2010.

While half of operators expect their catering offerings to increase this year, 80% of operators expect their take out (drive-thru, carryout or delivery) sales to remain the same in 2011, with only 10% reporting better expectations in the take out arena.

Source: Foodservice Packaging Institute



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