2003 Food & Beverage Industry Outlook

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Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). With 2002 being a year of recovery, the food and beverage industry should have a more robust year ahead. In preparation for further recovery in 2003, companies in the industry used the soft economy of 2002 to digest previous acquisitions and realign operations for growth. Consolidation will continue to propel the industry and it is likely that food & beverage companies will show early merger activity in 2003.

Merger activity dropped off considerably in 2002 in comparison with 2001. Only 219 mergers and acquisitions during the first six months of 2002, that is a 26% decline from the same period in 2001. With the exception of a few major deals, the merger activity for 2003 should remain consistent with these levels.

Discussion of these topics and more can be found in industrialinfo.com's recently released 2003 U.S. Industrial Outlook. Click on the image on the right and try the free demo!

With the emergence of more farmer cooperatives and "value-added" crops, as well as new meat processing cooperatives, the forecast for the agriculture sector is one of growth. An increase in soybean and corn planting may get a boost if the renewable fuels standard portions of the energy bill are passed this year.

With the continuously echoing effects of September 11, food safety and protection will be a prime concern in the industry. These concerns range from methods used in growing livestock and vegetables to protection of human health in all channels of food distribution.

When it comes to the "sweet" side of the industry, things are looking rather sour. Many confectionary companies are continuing to bolt south to Mexico and north to Canada due to high domestic sugar prices. One of the largest and most surprising effects of this trend came in late 2002 with the announcement by Imperial Sugar, one of the largest sugar producers, to close its Sugar Land, Texas refinery. On the other hand, low sugar prices, cheap labor, and a growing market in Mexico have already attracted companies such as Brach, Mars, Tootsie Roll, and Hershey to establish plants there over the past year.

The spectacular rise and fall of flavored alcoholic beverages, or "malternatives" last year, is said to be over, but major marketers are now leveraging their traditional high profile brands to retain market share in this category. An influx of new products is expected in the first half of 2003, which will produce intense competition for existing brands.