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

                                    Oct 27, 2022 - FDA to Redefine “Healthy” Food
                                    • Foods currently marketed to consumers as “healthy” may lose that designation under the Food and Drug Administration’s updated definition of the marketing term “healthy.” The FDA in September announced it is updating the marketing term "healthy" to reflect what has been learned about what makes a wholesome diet since 1994 when the agency last revisited the issue. To meet the proposed definition, a food product would need to contain a certain amount of food from at least one of the food groups or subgroups (e.g., fruit, vegetables, grains, dairy and protein foods) recommended by the 2020-2025 Dietary Guidelines for Americans. The specific limits for added sugars, saturated fat and sodium would be based on a percentage of the Daily Value for these nutrients.
                                    • Persistent inflation drove retail prices of organic fresh produce higher in Q3 2022, generating a 4.1% increase in total organic dollars, but also contributing to a decline of 4.5% in organic volume compared to the same period last year, according to the Q3 2022 Organic Produce Performance Report from Organic Produce Network and Category Partners, as reported in Supermarket News. Overall, organic fresh produce pricing per pound increased by 8.9% for Q3 2022 compared to the same period last year, with sales for the quarter topping $2.4 billion. By comparison, the average price per pound of conventional produce increased by more than 10%, with total sales of $17.93 billion. Berries and packaged salads continue to be the top two organic produce categories, responsible for nearly 40% of all organic produce dollars.
                                    • 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.
                                    • To cope with rising food prices, consumers are trading down and spending less, according to data from the recently merged market research firms IRI/NPD. Year over year, store prices rose 13.4% during the 52-week period ended August 28, led by a 30% increase in butter, margarine, and spread prices. Frozen dinner prices have also risen sharply. While dollar sales of food have gone up, sales volumes were down 4% year over year. The IRI/NPD report said shoppers are cutting back on discretionary foods, turning to value brands, and shopping more frequently in search of better prices.
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