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2014 Survey Results Sum Up Growth, Challenges in Foodservice Packaging Industry

Encouraging sales and growth in 2013 has led foodservice packaging converters, raw material and machinery suppliers as well as foodservice distributors and operators to forecast optimistic industry circumstances for 2014, according to an annual survey conducted by the Foodservice Packaging Institute (FPI).

More than 80 FPI members and invited guests shared their successes in 2013 and their concerns for the future that might hinder industry growth. Changes to sales volume and profits, expansion and purchasing plans, opportunities and challenges were collected.

Nearly 60% of foodservice packaging manufacturers and suppliers experienced growth in volume, and nearly 50% saw growth in profit last year. This year, two-thirds of the industry expects volume expansion and 60% anticipate profit growth. Over three-quarters of foodservice operators predict sales to increase by year-end, although many reported that this past winter's harsh weather played a role in reduced sales traffic in the first quarter.

In another positive sign for the industry, more than half of the North American and European manufacturers reported plans to grow their companies this year through construction of new facilities, expansion of current facilities and mergers and acquisitions.

When considering growth potential during the next 5 years, respondents expect market expansion in convenience stores, fast-casual and quick-service chain restaurants. Many believe the potential for growth is imminent because of the demand for immediacy in busy and on-the-go lifestyles.

North American and European converter and supplier respondents highlighted five common challenges facing the industry:

1. Increasing raw material costs

2. Margin compression

3. Public perception of packaging or foodservice packaging as "waste"

4. Global economic recession/recovery

5. Mergers and acquisitions

North American foodservice operators noted increased competition and rising commodity costs as two challenges they face, and foodservice distributors expressed concern over more manufacturing consolidation.

Founded in 1933, the Foodservice Packaging Institute (FPI) is the leading authority for the North American foodservice packaging industry. Members include foodservice packaging manufacturers and their raw material and machinery suppliers, restaurants, grocery and convenience stores, distributors and nearly 50 school districts, colleges and universities. Learn more at www.fpi.org.

SOURCE: Foodservice Packaging Institute