Product innovation to drive revenue growth
July 14, 2010
by Meat&Poultry Staff
NEW YORK — Food and beverage manufacturers most frequently cited product innovations and innovative merchandising strategies as the top factors that will drive company revenue growth during coming years, according to a survey conducted by KPMG L.L.P.
“Food and beverage executives are seeing a better economic picture this year relating to their overall business,” said Patrick Dolan with KPMG. “However, significant concerns remain over the employment outlook and continued challenges of heightened competition and aggressive pricing and discounting practices.
“The executives tell us they are also focusing on innovation — in products, in services and in branding and promotions — to drive growth. A clear illustration of this is the skyrocketing use of mobile Internet and on-line shopping. Food and beverage executives will need to meet the challenge of marketing to a consumer base growing more technologically savvy every day.”
Specifically, 89% of executives said product innovations would be a top driver of growth and 82% of executives said merchandising strategies also would be a top factor. The survey found two-thirds of executives said revenue and profitability were better now than a year ago, and 39% of respondents were more optimistic about employment in their sector over the next year. In addition, 59% of respondents believe their sector will recover ahead of the U.S. economy as a whole, with them believing the timeline for overall economic recovery being about 2.2 years away.
“While there is an uptick in the level of optimism this year from the food and beverage execs, they are pushing their recovery outlook even further out from last year’s predictions,” Mr. Dolan said. “These results illustrate that the economy will most likely not recover as rapidly as hoped, placing additional emphasis on food and beverage companies to continue to employ strategies to manage costs and improve productivity. Companies are trying to achieve sustainable margin improvement in the face of continuing challenging times.”