Global food industry executives forecast for mergers and market consolidation during next 12 months
A global survey of food industry executives has found that merger and acquisition activity is expected to increase in the industry over the next 12 months.
The “Global Food Survey 2012-2013: Market Trends, Marketing Spend and Sales Strategies in the Food Industry ” report was published this week by UK-based specialist market research company Canadean. It is the result of a survey drawn from 152 leading global food industry executives.
According to the report, executives from the global food industry expect increased levels of consolidation, with 45 per cent of respondents anticipating that there will be either a ‘significant increase’ or an ‘increase’ in mergers and acquisitions activities over the next 12 months.
According to Canadean’s report, mergers and acquisitions activity is expected to increase as a result of margin pressure on manufacturers, shortage of skilled labour, increasing cost pressures, new consolidation opportunities, and the weak liquidity position of many small companies.
China, India and Middle East identified as important regions for growth
Canadean’s research found that global food manufacturer industry respondents identified China to be the most important region for growth among emerging markets, along with India and the Middle East.
Furthermore, Brazil and Indonesia are considered the two most important emerging markets by respondents from food manufacturing companies.
“With strong economic growth in China and India, along with a significant increase in household income, possibility of reduction in food prices due to ease of agri commodity prices, and changes in consumer attitude towards processed and healthy foods, makes them attractive to foreign investors,” the report said.
Food manufacturers optimistic, survey finds
Of respondents across the global food manufacturers’ industry, 58 per cent said they are ‘more optimistic’ about revenue growth for their company over the next 12 months than the previous 12 months, Canadean said.
According to the report, reasons behind this include increased consumer demand towards health and wellness oriented food products, such as organic and gluten-free food, and increased growth of private label products.
“The optimism level in the global food manufacturing sector is expected to be fuelled by increased consumer demand towards health and wellness oriented food products,” the report said.
