Food Products Industry Shows Growth Despite Headwinds

 

Hello again, and welcome to this week’s Thomas Index Report. If you’re one of the more than 300,000 subscribers that gets this report through our daily Thomas Industry Update, you may have seen a recent update covering how a national trucker shortage is eating into profits for food manufacturers. Industry giants such as General Mills, Kellogg’s and Hershey are pointing to the fact that trucking companies are charging as much as 30 percent more for long-distance routes than they did last year – and those trucking companies point to the growing lack of drivers as the reason that capacity is down, and prices are up.

On top of this challenge, an industry-wide grocery price war is also eating into margins. With Amazon’s purchase of Whole Foods, and with European chains such as Lidl and Aldi planting their flag here in the U.S., grocers and food producers are forced to cut prices in an effort to retain customer loyalty. 

Despite these challenges, people still have to eat, so the industry keeps moving on, and on that note, our data shows some interesting sourcing activity in categories related to America’s food producers.

Sourcing activity in the broad category of Food Products is up 46 percent week-over-week and 47 percent month-over-month in the Thomas Network at Thomasnet.com. Over the past two years, Food Products is actually the fifth most sourced category by volume on our platform of over 60,000 product and service categories, so this is significant sourcing activity we’re seeing.

Over the past month, our data has also shown sourcing increases in the related categories of Food Additives, Food Packaging Containers, and Fabrication of Stainless Steel Foodservice Equipment.

Like many industries, there’s a sea change happening in the food industry, as things like e-commerce, technology, subscription food services, and the tastes and preferences of the growing millennial generation create new challenges and opportunities for businesses throughout the entire supply chain. It’s an exciting industry to keep an eye on, and we’ll do so at Thomas.

On another note, here’s a quick look at the top ten categories by sourcing volume over the last four weeks on Thomasnet.com. Steel tops the list yet again, as American manufacturers look to source domestically as a result of the new tariffs on foreign metals. All of these categories indicate a strong and growing industrial market:

  1. Steel
  2. Contract Manufacturing
  3. CNC Machining
  4. Fasteners
  5. Machining
  6. Printed Circuit Boards (PCB)
  7. Metal Fabrication
  8. Food Products
  9. Pharmaceuticals
  10. Springs

Well, that’s what our data shows this week. The best way to get this weekly Thomas Index report – and other useful industry news – is to sign up for our daily Thomas Industry Update. You can do so by visiting Thomasnet.com.

Thanks for watching!

 

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