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 Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Quarterly Insight, 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

                                    Coronavirus Update

                                    Apr 26, 2022 - High Rates, Low Capacity for Refrigerated Freight
                                    • Rising refrigerated freight rates are freezing some perishable food makers out of the market and keeping products off supermarket shelves. Perishable food makers in the US are facing a refrigerated trucking capacity shortage. Finding available and affordable refrigerated trucking options during the summer months – a major pain point for shippers – may be an even bigger challenge in 2022 as trucking rates soar amid higher fuel prices and limited capacity, according to DHL Global Forwarding.
                                    • Faced with rising ingredient, supply chain, and other operating expenses, food companies are passing along their higher costs to consumers. In a recent survey conducted by international advisory firm Mazars, more than three quarters of food industry executives said they’ve raised prices to recover at least some of their increased costs. Only 2% of respondents reported passing along 100% of their costs, while 25% said they passed between 5% and 9% of their additional costs to customers. Despite the price increases, 83% of respondents expected sales to increase in 2022.
                                    • Perishable prepared foods manufacturers are benefiting from continued strong consumer demand for convenience and comfort foods. Convenience foods are growing as many people continue to work from home. Sales of handheld refrigerated entrees (burritos, corndogs, quesadillas, taco) climbed 19.5% in 2021, according to Nielsen/NFRA.
                                    • Meal kits seized the market when consumers were without restaurant options during the pandemic. Sales of meal kits jumped nearly 69% in 2020 and 19% in 2021 to reach $6.9 billion, according to the Food Processing Suppliers Association. However, the industry has challenges moving forward with over 150 companies vying for consumers attention and dollars. The segment is facing increased competition from restaurants reopening and meal delivery services, like Uber and Door Dash. The cost of $10 per person is also prohibitive for some now that unemployment benefits have been reduced. Finally, the segment has created its own competition by providing customers with laminated recipes that they can recreate at home, for less, without the kit.
                                    • Workplace occupancy, an indicator of demand for perishable prepared foods, was 40.5% for the seven-day period ending on April 20, up from about 20% at the start of 2022, according to data gathered from swipes of access control cards in buildings with security systems provided by Kastle Systems. The Austin, TX, metropolitan area had the highest occupancy for the seven-day period ending on April 20 at 58.8%. The San Jose metropolitan area trailed all others tracked at 31%.
                                    • About 92% of families plan to continue eating together at home at least as often as or more often than they do now, according to sales and marketing firm Acosta. Perishable prepared food manufacturers that rely heavily on sales to restaurants may continue to be negatively impacted even as pandemic-related social distancing policies are eased. Some 30% Of those surveyed by Acosta expressed misgivings about dining at a restaurant again, 16% saying they’re not sure when they will go back, and 3% saying they’ll never go back to restaurants.
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