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 770 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, meal 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.

Healthy 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 79 workers, and generates about $23 million annually.

    • The perishable prepared food manufacturing industry consists of about 770 companies, which employ about 61,000 workers and generate about $18 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
                                    Source: Vertical IQ and Inforum

                                    Recent Developments

                                    Feb 28, 2023 - Rising Demand for Cold Storage
                                    • High demand for cold storage space is expected to persist throughout 2023, as food and beverage companies look to quickly increase capacity, Refrigerated & Frozen Foods (R&FF) reports. Moreover, increasing demand from retailers for fresh and frozen foods is straining US cold storage capacity. Responding to heightened demand, cold storage construction is projected to reach $18.6 billion in value by 2027 – an increase of 13.8% per year, according to Emergen Research. Reports project the total market for cold storage will reach $212 billion by 2025, yet capacity is only projected to grow by 1% this year. Food and beverage companies looking to add build-to-suit cold storage facilities will find projects challenging from a location and timeline perspective, according to R&FF. The US’s cold storage capacity is aging and outdated, with 78% of existing facilities built before 2000, according to Emergen Research.
                                    • Grocery price inflation is driving sales and volume growth of private-label products, the Private Label Manufacturers Association (PLMA) reported in its 2023 Private Label Report. Store brands, which typically cost less than national brand products, contributed to an 11.3% sector sales increase in 2022, according to full-year data from IRI Unify. In 2022, store brands’ annual dollar volume increased by $23.2 billion, setting a new record of $228.6 billion for sales across all US retailing channels, according to the PLMA report. The fastest-growing segments are beverages, up 19% to $12 billion; deli prepared foods, up 17% to $5.9 billion; and refrigerated foods, up 17% to $47.4 billion.
                                    • To crack down on fraud and strengthen oversight, the US Department of Agriculture in January issued new requirements for foods labeled organic, Food Manufacturing (FM) reports. The new rule strengthens enforcement of the department’s strict definitions of organic, which must rely on "natural substances and physical, mechanical or biologically based farming methods to the fullest extent possible." It requires USDA's National Organic Program certification for all imported organic food, increases certifications of more businesses in the supply chain, and boosts authority for inspections, record-keeping, traceability and fraud prevention practices. The Organic Trade Association (OTA), which lobbied for the rule, said it represents the biggest change to organic regulations since the creation of the USDA organic food program. Sales of organic foods in the US topped $63 billion in 2021, according to OTA.
                                    • Amid higher prices for ingredients, packaging, and other inputs, some consumer packaged goods manufacturers have decreased product weight, quantity, or size to reduce costs. Known as “shrinkflation,” downsized products for the same price come at a time when inflation-pinched consumers are hypervigilant about getting the most for their dollar. According to a recent survey by Morning Consult, nearly two-thirds of shoppers are worried about shrinkflation. To cope with shrinkflation, nearly half of consumers say they’ve switched brands, and/or bought generic brands. A third have switched to buying in bulk, and 30% have stopped buying specific brands. Of all major grocery categories, snacks are most affected by shrinkflation, with 55% of shoppers reporting they have noticed the phenomenon in the snack space. Other food categories that have most affected consumers include frozen foods, bread and pastries, and dairy.
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