A new survey by the Foodservice Packaging Institute (FPI), Falls Church, Va., revealed strong industry growth and sales in 2016 and expected volume growth and profit expansion in 2017.
“This year’s State of the Industry Survey forecasts a promising outlook for the foodservice packaging industry and our members,” says Lynn Dyer, president.
Compiled from FPI’s annual State of the Industry Survey, results included input from raw material and machinery suppliers, converters and foodservice distributors and operators. Nearly 60 supply chain partners shared business growth successes and challenges from 2016. FPI also collected this year’s expected changes to sales volume and profits, expansion and purchasing plans, opportunities and challenges.
Nearly 75% of foodservice packaging manufacturers and suppliers reported volume growth, and nearly half reported profit growth last year.
Positive indicators for industry growth in 2017 include:
- 60% of North American manufacturers reported corporate expansion plans through construction of new facilities, expansion of current facilities and mergers and acquisitions.
- More than 80% of North American converters plan to purchase machinery in 2017 — up 30% over last year.
Survey respondents anticipate that the greatest area for market expansion is in the fast-casual sector due to its continued popularity and ability to adapt to an evolving consumer. New this year, respondents predict other major expansion opportunities in convenience and grocery stores, as these markets try to capture consumers’ food dollars. Catering and delivery services were also referenced, as operators seek to expand sales opportunities beyond their physical establishments.
“Growth in markets such as fast-casual restaurants and catering provide new opportunities in packaging that our industry is embracing,” says Dyer.
The survey also disclosed the top common challenges facing the industry over the next few years, based on the responses from North American converters and suppliers:
- Increasing raw material costs.
- Recovery/end-of-life options for foodservice packaging.
- Margin compression.
- Public perception of packaging or foodservice packaging as “waste.”
- Environmental activism.