Perishable Prepared Food Manufacturers
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 815 perishable prepared food manufacturers in the US produce fresh, ready-to-eat or ready-to-heat food that provide convenience for consumers. Products include pastas and noodles, processed fruits and vegetables, salads and slaws, pizzas, sandwiches and wraps, tofu, hard-boiled eggs, refrigerated snack packs, cooked meats, refrigerated soups and stews, meat pies and quiches, and packaged lunches.
Competition for Retail Shelf Space
Firms can lose access to markets if products are slow movers or expire on retailers’ shelves, as competition for shelf space is fierce, especially for refrigerated foods.
Healthier Prepared Options
Consumers are looking for convenient prepared food options that are healthier than fast food.
Industry size & Structure
The average perishable prepared food manufacturer operates out of a single location, employs about 82 workers, and generates about $27 million annually.
- The perishable prepared food manufacturing industry consists of about 815 companies, which employ about 66,500 workers and generate about $21.7 billion annually.
- The industry is concentrated with the 20 largest firms representing 60% of industry revenue.
- Customer industries include food distributors, grocers, convenience stores, institutions, airports, and vending machine owners.
- Large companies include Fresh Express, Fresh & Ready Foods, E.A. Sween Company, Reser’s Fine Foods, and Spring Glen, as well as divisions of large food manufacturers such as Kraft Heinz (Lunchables).
Industry Forecast
Perishable Prepared Food Manufacturers Industry Growth
Recent Developments
Sep 30, 2024 - Prices Rising Amid Falling Sales
- According to the US Bureau of Labor Statistics data, producer prices for perishable prepared food manufacturers rose 5.3% in July compared to a year ago after rising 4.5% in the previous July-versus-July annual comparison. Meanwhile, food industry sales and after-tax profits are lower this year than last, Census Bureau data shows. Employment by miscellaneous food product manufacturers fell 2.4% year over year in July, extending a contraction in the workforce that began early in the year, BLS data shows.
- Competition for grocery store shelf space is heating up as brands vie for a shrinking number of spots, The Wall Street Journal reports. While claiming prime retail shelf space has always been competitive, it’s becoming more so as grocers trim the number of items they stock, shrink their retail footprints, and devote more space to their store brands, Steve Zurek, a VP at consumer research firm NIQ told WSJ. Between 2009 and 2023, square footage in supercenters and supermarkets decreased by 5% and 3.3%, respectively, NIQ data shows. Meanwhile, between 2020 and last year, retailers cut unique products by nearly 9%, per NIQ. Retailers are prioritizing products that help inflation-weary consumers save money to keep them coming back. In response, consumer-packaged-goods and food companies are “ investing in new products and working to ensure packaging and prices appeal to shoppers – and to grocers,” WSJ reports.
- Packaged food companies are seeing a divergence in consumer behavior, with lower-income consumers appearing to struggle while more affluent consumers are still spending freely, The Wall Street Journal reported in July. How companies respond depends partly on what type of consumer their products target. Food companies with greater exposure to lower-income shoppers face pressure to offer value through promotions and discounts to support unit volume growth, as well as greater competition from private-label goods, according to WSJ. Meanwhile, companies targeting higher-income households are pursuing a premiumization strategy by continuing to improve their products to justify their rising prices. Companies that target various income levels are tasked with appealing to the increasingly divided consumer market. The expiration of higher pandemic-related Supplemental Nutrition Assistance Program benefits in March 2023, coupled with years of price inflation, is hitting lower-income households, which tend to purchase more frozen foods, the hardest.
- In an effort to make Americans eat healthier diets, the Food and Drug Administration is considering requiring food manufacturers to put new labels on the front of packages, The Wall Street Journal reports. The front-of-package labels would display health risks, such as high levels of salt, sugar, or saturated fat. The FDA, which is mulling different options for displaying the health warnings, plans to propose a rule on the labeling this summer, according to WSJ. Such warnings already appear on the front of packaged foods in Mexico, Chile and some other countries. If adopted, the new labeling requirements would appear on products such as sugary breakfast cereals, cookies, and yogurts. The food industry opposes the FDA plan, asserting there isn’t enough evidence that labels can significantly change consumer behavior or that some labels are confusing. Early research has shown that some warning labels can help people make healthier choices.
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