Survey shows continued growth in foodservice

Last year’s growth and sales has led the foodservice packaging industry to forecast continued confidence for 2016 despite familiar challenges, according to Foodservice Packaging Institute’s (FPI) 17^th annual State of the Industry Survey.

FPI’s survey included input from raw material and machinery suppliers, converters and foodservice distributors and operators. More than 65 FPI members and invited guests shared business growth successes and challenges from 2015. FPI then collected the changes to sales volume and profits, expansion and purchasing plans, opportunities and challenges.

“FPI’s State of the Industry Survey provides insight into the conditions facing our members,” says Lynn Dyer, president of the Falls Church, Va.-based association. “Although challenges remain year over year, so does confidence in growth.”

About 57% of respondents experienced growth in volume, and nearly 60% reported profit growth in 2015. This year, more than three quarters of the industry expect volume expansion and half expect profit growth.

In another positive indication for the industry, 65% of North American manufacturers reported corporate expansion plans through construction of new facilities, expansion of current facilities and mergers and acquisitions. More than half of North American converters also plan to purchase new machinery in 2016.

Respondents foresee that the greatest area for market expansion over the next five years is in the fast-casual sector. This is due to the segment gaining attention from Millenials and drawing customers from traditional quick- and full-service restaurants. Other areas for potential growth include convenience stores and quick-serve restaurants.

Based on the responses from North American converters and suppliers, five common challenges facing the industry over the next few years are (in order of importance):

1. Margin compression.
2. State of the global economy.
3. Development of new products in response to customer demands.
4. Public perception of packaging or foodservice packaging as “waste.”
5. Environmental activism.