What determines future market opportunities and job creation? If your answer is “confidence,” here’s good news: a November 2013 survey by the Institute for Supply Management (ISM) measuring market confidence could portend a great year ahead. It determined both service and manufacturing sectors expect sales hikes in the 4% range and plan to hire appropriately. Also, Grant Thorton International LTD’s 2013 Global Food & Beverage Benchmarking Survey notes, “After years of belt-tightening and deferred investments, the global food and beverage industry is back — and growing. Revenues, profits and employment are expected to improve in the next 12 months.”
It’s good to know what the optimists among us expect, but many analysts believe we get what we inspect, not what we expect. So what are the facts supporting the trend toward optimism?
Earlier this month, ISM reported that a sudden spike in global export orders triggered an unexpected manufacturing acceleration in November – at the fastest pace in more than two years. In fact, end-of-year headlines suggest that 2013 is the tipping point when depression-era retraction finally gives way to expansion.
Want proof with your pudding? Even if we limit entrepreneurial inspection to food and dairy production or sales, here are 10 concrete reasons to enter 2014 with a degree of optimism:
- U.S. dairy exports continue to be driven by Mexico, but orders from Asia and emerging markets are on the rise. In 2013, demand was high for nonfat dry milk and skim milk powder, cheese, butterfat and dry sweet whey. Land O’Lakes recently became the second U.S. company to join the Global Dairy Trade platform established in 2008; it will export skim milk powder in March, adding butter later in 2014.
- Dominos is currently the second largest pizza chain in the world, due in part to its focus on India in 2013, where it now has 650 restaurants in 137 cities. Its largest foreign market remains the U.K., which has about 100 more stores than India, but the race is on and India is proving to be a market-share contender.
- Whole Foods Market is experiencing its most aggressive expansion, planning to add about 35 stores with a goal of owning 1,000 outlets. (Hint: watch for more urban inner-city sites, since its success with a model setting in a Detroit neighborhood). Whole Foods rose to No. 38 on this year’s Bloomberg Businessweek ranking of best-performing U.S. companies (up from rank 75 last year). Also expanding: Vermont-based Commonwealth Dairy is expected to go from $70 million annual sales in 2013 to $140 million in 2014, due to strong sales of Greek yogurt and its new kids’ line of yogurt in a pouch. Commonwealth produces Greek yogurt under its own Green Mountain Creamery brand and also makes it for private labels.
- Kroger reported a 2013 third-quarter sales hike of 3.2% to $22.5 billion, with identical-store sales increasing 3.5%. Following 40 consecutive growth quarters, and intensified market research, Kroger will answer rising consumer demand for its natural and organic foods portfolio with its own private-label brand in 2014, called Simple Truth. In related news, WhiteWave Foods announced 2014 plans to expand food and beverage products in its $750 million organic Horizon brand.
- Full-line dairy products manufacturer HP Hood, named Dairy Foods “Processor of the Year”, is spending about $100 million on capital projects to invest in new technology and equipment. The Lynnfield, Mass. Company hopes to boost product shelf-life. The Alpina Foods Greek yogurt plant in Batavia, N.Y., is also making infrastructure investments; new equipment should allow it to double output.
- Now hiring: Bel Brands USA will produce Mini Babybel cheeses at its new facility in Brookings, S.D., in July. The 170,000-square-foot-plant will employ 275 people. Meanwhile, Sartori will begin work on a $14 million plant expansion and renovation in 2014 at two locations in Wisconsin. The cheese producer will add up to 53 new jobs.
These are all positive indicators that decision makers have confidence that it’s time to invest – in infrastructure, in R&D, in brand expansion, in brick-and-mortar sites, and in employment. Now that’s reason for optimism!