2017: The Year of the Small Food Manufacturer

Specialty foodThe food industry is in a constant state of change. This is largely driven by ever-evolving consumer preferences that are often nearly impossible to predict.

As an example, the Greek yogurt craze took the industry by surprise, especially as it went on to disrupt other areas of the market. Another example is sous vide cooking. This technique has supposedly been around for centuries, but it only started to take off a few years ago. Today, it’s one of the hottest trends in industrial food processing.

What these and other examples show is that consumers are on the lookout for new and exciting food products. They want more variety and more specialized choices. Consumers today want food that seems like it’s made just for them.

For these reasons and more, we believe that 2017 will be the year of the small food manufacturer. In this article, we present data that supports this prediction and then look at some of the tools that can help small food manufacturers succeed.

Why small food? Why now?

Food has never been a one-size-fits-all kind of thing. But it used to be more one size than it is now. Just think about what the dairy case or the frozen ready-meals section of a grocery store looks like today compared to 10 years ago.

Many recent studies have shown that today’s consumers want more choices, higher-quality choices, and healthier choices. Here are a few of them:

  • In IRI’s 2016 New Product Survey, 24% of respondents said they wanted to add excitement to their daily diet, while 21% actively look for products that are truly new and different (source).
  • A 2015 Mintel report found that almost half of consumers had purchased specialty foods in the previous six months and that specialty food consumers spend $1 of every $3 grocery dollars on the products (source).
  • Organic foods, which barely a decade ago were considered specialty items, are now grocery aisle mainstays. In 2015, U.S. organics sales topped $43 billion (source).
  • Even at quick-service restaurants, variety is important. According to a 2014 FoodThink study 40% of consumers say menu variety influences which QSR they choose (source).
  • Similarly, a 2016 Cargill study found that Hispanic customers want more variety in the meat department, and the availability of variety meats influences where they shop (source).
  • And then, of course, there’s the clean label movement. So many studies have demonstrated that consumers want clean labels and transparency that Food Business News named clean labels the 2016 Trend of the Year.

These are just a handful of the many studies showing how food preferences are changing. And thanks to these types of changes, as well as what Campbell Soup Co. CEO Denise Morrison refers to as a “mounting distrust of Big Food,” small food manufacturers are gaining ever more market share. In January 2016, Rabobank reported that, between 2011 and 2015, the top 10 branded processed food companies in the United States lost 4% of their market share to smaller manufacturers.

While life has no guarantees, all signs point to 2017 being a year where small food manufacturers have an even greater opportunity to compete in the big leagues.

What small food manufacturers need to grow and thrive

As demand grows for high-quality, specialty foods, small manufacturers will need to be ready and able to scale their production accordingly.

Here are three things small food manufacturers can do to be prepared for the growth to come:

  • Work with true partners, rather than just vendors. The suppliers you work with — from raw ingredients producers to equipment manufacturers — should be partners, not just vendors. That means they take the time to listen to and understand your needs so they can help you find the best possible solutions.
  • Select equipment that can grow with you. One of the challenges growth can bring is that processes and equipment that work great on a micro level don’t scale particularly well. By investing in machines that do scale, you can save yourself the headache of having to re-establish your processes every time you grow. For example, our spiral ovens come in five different sizes. So, when it’s time to increase production, all you have to do is move to the next size. The rest of your processing line can stay intact.
  • Make sure you have the right people on your team. Having the right people in the right seats is key at any stage of your business. But it’s arguably most important when you’re growing into new products and new markets. If you aren’t sure whether you have the right people in the right seats, the answer is probably “no.” This article from Business News Daily offers nine strategies for improving your hiring process.

If you’re a small food manufacturer, 2017 could be a red-letter year for you. And we can help you make it so. Contact us to learn more about how Unitherm’s flexible, scalable processes can help you grow this year and into the future.

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