U.S. Grocery Manufacturers See Sales Decline; But Leaders Prosper

Leaders in the grocery manufacturing industry continued to grow their sales in 1998 while overall declining sales plagued the remainder of the industry, according to the 1999 Financial Performance of the Grocery Manufacturing Industry report by the Grocery Manufacturers of America and Swander Pace & Co. The top quartile of performers grew sales at two-and-a-half to four times the median rate and reached a five-year compound annual growth rate of 15.7%. Sales growth in the overall Food and Beverages, and Wholesale and Retail categories for the 1997-98 period was one-third of what it was in the 1996-97 period. The report also outlined four strategies for creating long-term, sustainable growth:

  • Following core consumers to rapidly growing channels of distribution such as warehouse clubs, convenience and drug stores;
  • Developing products that provide health and wellness benefits;
  • Using acquisitions to expand into high-growth channels, product categories, or geographies;
  • Developing a strong international presence to capitalize on emerging markets. The report was based on a database of 217 public and private food, beverage, and consumer products manufacturers.
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