All Signs Point to… Uncertainty
If you’ve been around for a while, you’ll know that each year we publish our State of the Industry Report. This year was no different. After 24 years of producing this report, we tend to have a good sense of what the results will show. But, with continued fallout from the COVID-19 pandemic and increased economic uncertainty, the industry is left without a clear grasp of what will happen in 2023. The 24th State of the Industry Report doesn’t reflect a unified outlook, but it does provide valuable insight of the current foodservice packaging industry.
We get this snapshot every year during the first quarter by sending out the State of the Industry survey to FPI members as well as non-members within the industry. This gives us the viewpoint of folks we don’t always hear from, and it provides non-member participants a chance to view the report. Most importantly, it tells us what the industry thinks when looking back at 2022 and ahead to 2023.
Only 60% of foodservice packaging manufacturers and suppliers experienced growth in volume, compared to 80% in the previous survey. In a large jump from 2021, 70% reported profit growth in 2022. But, in a show of continued uncertainty, only 50% of the industry expect volume expansion and 39% expect profit growth this year. Foodservice operators who responded saw increased sales, and were overwhelmingly optimistic that this trend would continue in 2023.
Sending another signal that the outlook for 2023 is uncertain, 37% of the North American manufacturers reported another year of planned corporate expansion primarily through expansion of current facilities, compared with 50% in 2022. In a continued decline from previous years, 60% of North American converter respondents plan to purchase machinery in 2023.
One thing that is certain is respondents’ view on the fast casual segment and grocery stores — they’re seen as the greatest areas for market expansion. This is due in part to continued use of take-out post-pandemic, along with inflation. Convenience stores and chain quick-service restaurants are also noted as opportunities for market expansion because of increased foodservice solutions and the ability to eat foods on-the-go.
Despite the uncertainty, there is room for optimism. People are going to continue to want their food on-the-go and our industry will continue to provide ways that make it easiest for that to happen.
We’d like to thank the organizations that participated in this year’s survey. If you haven’t participated before, but are eligible (raw material or machinery supplier, converter, foodservice operator or foodservice distributor), please think about participating next year. We realize it’s a time commitment on your end, but the survey is meaningful because of your responses. If you’d like more information or would like to be on our list for next year, let us know.
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