Last updated on September 6th, 2012 at 12:03 pm
Senior financial executives of global food and beverage companies expect to achieve improved financial performance in 2011, but foresee difficulty in sustaining profit margins and increasing market share, according to a survey by KPMG International.
In the KPMG survey of 138 food and beverage executives, 20 percent expect “significant increases” in financial performance this year versus last, and 58 percent are expecting “some increase.” Only 11 percent expect a decline in performance.
This optimistic view is a result of a noteworthy increase in consumer demand. In fact, 30 percent said they’ve already seen a sustained increase in demand for their company’s products and services since the economic slowdown, with 44 percent expecting the increase in 2011 and 20 percent in 2012 or later.
In sharp contrast with the optimism expressed about their companies’ financial performance in 2011 and the recovering economy, 49 percent surveyed by KPMG indicate that they will have difficulty sustaining profit margins. In addition, 45 percent say they will have difficulty increasing market share.
While the economic downturn has had a significant impact on profits and growth over the past three years, company execs feel that their firms have been strengthened in many ways: 48 percent said cost structures have improved (14 percent said they are in a worse position); and 43 percent said they are in a better position today with suppliers (with 8 percent saying worse). To improve supply chain efficiency and costs over the next two years, the execs see investing in production or distribution technology, enhancing distribution structure, decreasing inventory levels and consolidating suppliers as the greatest priorities.