Improved Economy Boosts Food, Beverage Sector

In its latest executive briefing, “The U.S. Food and Beverage Market: 2010 Performance and Outlook for 2011 and 2012," SymphonyIRI Group analyzed the food and beverage industry and predicts improved economic conditions and consumer confidence will help the U.S. food and beverage industry rebound in 2011 and 2012. That’s good news since the sector slowed to 0.6 percent growth in 2010 as compared to 1.3 percent in 2009.

“As the economy continues to improve, shoppers are more likely to remain with a set of brands and retailers that they know delivers the value they expect," said Dr. Krishnakumar (KK) Davey, managing director, Symphony Consulting. “It is important for these companies to invest in gaining the most detailed understanding of their shoppers possible. To succeed, these manufacturers and retailers must innovate by continuously introducing new products, packaging, pricing, merchandising and promotion strategies, and customizing these initiatives to highly-discrete shopper microsegments."

According to the report, U.S. food and beverage market will grow in the 1 percent to 1.5 percent in 2011 and 1.8 percent to 2.2 percent in 2012. The growth is significantly slower than the 3.6 percent to 3.9 percent CAGR anticipated for U.S. gross domestic product (GDP) by Moody’s. Among surveyed shoppers, 38 percent anticipate their food and beverage spending will increase in 2011, while just 10 percent project their spending will decline.

“Because the economic recovery is, and will continue to be, uneven, CPG and retail leaders must identify and focus on market segments where growth is likely to occur over the coming months and years," said James Rushing, partner, Symphony Consulting. “While there are exciting opportunities for CPG and retail companies to attract new shoppers and increase shopper loyalty, there are still challenges ahead. Many shoppers expect their food and beverage spending to be flat or increase just slightly this year."

Sources:

* SymphonyIRI: New Symphony Consulting Food & Beverage Industry Report Predicts Accelerating Market Growth in 2011 and 2012