16.07.2024
Study
7 out of 10 food and beverage executives expect revenue growth in 2023
Dive Insight:
Food and beverage companies will be forced to make strategic operational decisions this year. But despite economists predicting a tough year ahead, with supply chain challenges continuing and inflation affecting consumer behavior, most executives surveyed expressed optimism and opportunity for 2023.
According to the firm, there are signs that the industry is evolving. The survey found that more than 70% of executives said that last year’s revenues were up compared to 2021.
“There are nuances and challenges for every sub-sector of the industry,” said Louis Biscotti, national head of food and beverage at Marcum, in a press release about the report. “Companies need to use all available tools to drive growth and capitalize on market opportunities, and this requires an integrated approach to customers, suppliers and employees.”
Since last year, food and beverage companies have been working to optimize their profits in a challenging economy. In the summer, when some economic forecasts began to predict a recession, several companies outlined strategies they planned to implement to remain profitable. Among them, McCormick made calculated pricing decisions for its home-cooked products, and Kraft Heinz tested smaller packages for its Kraft Singles and Mac & Cheese products. Danone North America CEO Shane Grant said the company is poised to benefit from the tough economic situation, when consumers may favor products such as coffee creamer and yogurt.
Some of the challenges that survey respondents expect this year include inflation, securing a skilled workforce, managing supply chain relationships, and the ongoing impact of the pandemic.
After tens of thousands of layoffs in industries such as technology and media over the past year, CPG companies may have to wrestle with decisions about the size of their own workforces this year. Executives surveyed by Marcum expressed confidence: 58% said they would raise salaries to attract and retain employees. However, less than half (46%) said they expect their workforce to grow in 2023.
Several CPGs have already restructured their workplaces ahead of potential future economic challenges. In November, Coca-Cola announced a voluntary buyout program for its North American employees. In December, Ingredients giant IFF announced job cuts.