Food Industry Shifts Gears Towards Retail During Pandemic. Used Food Machinery Values Stable.
Otto Cuyler
Throughout early stages of the pandemic, panic buying, and hoarding led to a sharp spike in the sale of packaged food products. Although the country is slowly beginning to open back up, a resurgence of cases in some states is causing major economic setbacks. There is also worry from many that the looming cold weather months will further spike the number of cases, therefore causing another spike in grocery store demand.
During a recent inspection, we had the opportunity to discuss with the client how COVID-19 has affected their production. The answer is most likely one that is common all across the country, and possibly the world. Throughout the full-fledged quarantine, their orders in their foodservice supply sector practically ground to a halt, however, their demands in the retail sector made it hard to keep up. Their answer was to re-allocate employees to their retail production lines and to add extra shifts in an effort to complete their growing orders. They are also considering adding more efficient machinery.
This is something, we think, that has been true for food processing plants all over the country. The lack of demand in the foodservice department was more than made up for by the serious demands in the retail department. In fact, according to a recent Yahoo! Finance article, the Global Packaged Food Market is expected to reach a worth of $4.89 trillion by 2027, helped tremendously by COVID-led stockpiling.
Here are a few brands that, according to Yahoo! Finance, have seen growth amid the COVID-19 pandemic (along with their expected earnings growth rate for 2020):
-B&G Foods, Inc. – 31.1%
-United Natural Foods, Inc. – 15.4%
-General Mills, Inc. – 10.1%
-McCormick & Company, Inc. – 7.7%
-Conagra Brands, Inc. – 5.3%
-Flower Foods, Inc. – 2.8%
Additionally, according to a FoodProcessing.com article, companies like Quaker Foods, Frito-Lay, Smuckers, Kraft Heinz Co., and Kellogg’s, have seen significant increases in sales.
As a result, there has been an uptick in sales of used food machinery relating to retail food products and packages at used machinery dealers as well as food industry auctions. As always, a premium is paid for excellent condition, brand name, late model used machinery.
· https://www.foodprocessing.com/articles/2020/power-lunch-john-yoler/
· https://www.foodprocessing.com/articles/2020/how-the-coronavirus-is-affecting-food-processing/
· https://www.foodprocessing.com/industrynews/2020/coronavirus-pandemics-silver-lining/
· https://finance.yahoo.com/news/6-packaged-food-stocks-snap-120812823.html