Increases in population and per capita income, popular social trends,
low prices, quality of products, and convenience drive growth in the Food &
Beverage industries. Companies that can control and improve these factors will
do well in the Food & Beverage markets.
People need food and drinks to survive, which makes
every human a potential consumer. The growth in human population and a rising
per capita income therefore make for an increase in wealthier consumers, which
causes growth in the Food & Beverage industries.
Popular social trends influence the demand for
certain sectors of the Food & Beverage industries. For example, people in
first world countries such as the United States of America are becoming more
health conscious. Because of this, sales in organic foods are increasing.
Good quality and low prices of products will
increase demand and promote growth for the industry. This is proven by the
success of products such as Private-Label products (in-house brands such as the
stereotypical CVS brand) and frozen foods. In July of 2009 private-label foods
accounted for 27% of all food introductions in the United States. The frozen
food sector has also been growing recently, with a projected net worth of $95.9
billion US Dollars worldwide by 2013, a $13.4 billion increase from $82.5
billion US Dollars in 2008.
Increasing
convenience in the availability of food and beverages has also helped foster
growth in the industry. People are more likely to purchase a product if it is easy
for them to acquire it. The presence of supermarkets and warehouses creates a
central location for people to purchase foods and beverages. This creates a
center for convenience and makes people more likely to purchase products that
they would otherwise have to go out of their way to get. For example, 54% of
organic foods sold in 2010 were sold in mass-market retailers (such as
supermarkets). The presence of organic foods in supermarkets has increased
organic sales drastically.
"Food and Beverage
Industry Global Report -2010." www.imap.com. IMAP, n.d. Web. 12
Feb. 2012. <www.imap.com/imap/media/resource. Page 10.
"Industry Statistics and
Projected Growth - Organic Trade Association." Organic Trade
Association. N.p., n.d. Web. 12 Feb. 2012.
<http://www.ota.com/organic/mt/business
"Global Food, Beverage, &
Tobacco." www.marketlineinfo.com. Datamonitor, n.d. Web. 12 Feb.
2012. <www.marketlineinfo.com/mline_pdf/industry_example.pdf>.
Although organic food is considered healthier, because of the lack of pesticides, it is generally more expensive. With the recent recession that affected middle and lower class families, I wonder if demand for organic food decreased, or if organic food is purchased mostly by wealthier people, the ones who were not affected as much by the recession.
ReplyDeleteAdding onto Aviva's comment, I feel that due to the increasing divide between classes ("the rich become richer and the poor become poorer") that there is and will continue to be an increase in two different sections of the Food & Beverage Industry. First, the wealthy will be buying the organic foods at places like Trader Joes. Second, the less wealthy people will continue to buy cheap foods that are easy to acquire, such as McDonald's.
ReplyDeleteOther possible things that may even drive the growth of the food and beverage industry are unanticipated events such as disasters. For example, the demand for water and food most likely went up in Japan after the earthquake and tsunami disaster occurred. The government would probably pay for these goods in order to supply their citizens with the necessities of survival.
ReplyDeleteFood and Beverage industry dramatically growing around the world..This blog focused on various factor which contribute for growth of this industry..Demand of organic food products are increasing day by day..as a result it increased organic sale drastically..Thanx for sharing informative post
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