This year marks the 22nd anniversary of FPI’s State of the Industry Report. We’re amazed that we’re here, looking back at one of the strangest years on record, and able to see that 2020 wasn’t a complete wash for the foodservice packaging industry. Each year this report provides a valuable snapshot of the current foodservice packaging industry and, despite the many changes we all faced this year, the value of this report hasn’t changed.
Each year during the first quarter, we send out the survey to FPI members as well as non-members within the industry. This provides us the viewpoint of folks we don’t always hear from, and gives non-member participants a chance to view the report. Most importantly, it gives us a look back at an unusual 2020 and ahead to 2021.
Not surprisingly, this year’s report highlights the impact COVID-19 has had, and will continue to have, on the industry. More than one-third of foodservice packaging manufacturers and suppliers experienced growth in volume while nearly one-quarter remained at the same level. Forty percent of respondents reported profit growth, a slight decrease compared with 45% of respondents in 2019, the last time the report was released. Looking forward to 2021, 84% of the respondents expect volume expansion and 72% expect profit growth. Foodservice operators who responded saw decreased or flat sales for 2020, but were overwhelmingly optimistic that this trend would reverse in 2021.
In an interesting split, 50% of the North American manufacturers reported another year of planned corporate expansion through construction of new facilities, expansion of current facilities, and mergers and acquisitions. Similar to previous years, 80% of North American converter respondents plan to purchase machinery in 2021.
Respondents continue to view the fast casual and quick service sectors as the greatest area for market expansion. This is largely due to COVID-19 and post-pandemic health and safety concerns as continued use of take-out is expected. Sectors like grocery stores and convenience stores continue to be noted as opportunities for market expansion because of increased foodservice solutions and the popularity of being able to purchase products to eat at home.
Continuing a trend from previous years is that North American converter and supplier respondents have varied opinions on the challenges facing the industry. Environmental issues continue to take center stage, along with commonly seen business issues like government legislation/regulation and margin compression. This tells us that the industry continues to face traditional business issues, but the increased public perception of packaging or foodservice packaging as “waste” and increased environmental activism is forcing them to consider and explore larger changes, just as it was before COVID-19.
We’re looking forward to a better year for our industry, and for everyone. It’s encouraging to see some growth despite new and ever-changing challenges.
A huge thank you to the many 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 consider participating next year. We recognize that it’s a time commitment on your end, but your responses make the survey results even more meaningful. If you’d like more information or would like to be on our list for next year, let us know.