The food processing industry in the USA
The food processing industry in the USA is the largest in the manufacturing sector. The industry has experienced growth with time, accounting for 10% of all shipments. The industry is expected to grow at a steady rate of 2.9% CAGR by 2022. According to the Bureau of Economic Analysis, the GDP of manufactured non-durable goods in 2019 decreased by 2.8%, which mainly reflected a decline in the food products. Since food is a necessity, the demand and supply of food products are less affected by economic downswings and upswings. Sustainable economic growth is expected to increase the demand for food with a rise in disposable income.
According to the U.S. Bureau of Labor Statistics, the U.S.’s unemployment rate is 3.7%, which is the lowest in 10 years. However, the figure in the food manufacturing sector, unemployment sits at 9.0%. The low unemployment can be attributed to acquisitions and mergers’ rash, which shrinks workers’ demand. The need for processed goods has led to a shortage of skilled workers to fill the positions. The highest unemployment rate is experienced in machine operators and food batch makers. Low wages in these sectors do not attract a lot of job applicants. More people continue to shift from farm work and move to urban areas searching for collar jobs, mostly affecting the sector.
Today, there is a great deal of uncertainty in the labor sector due to the Covid-19 pandemic. Covid-19 has introduced unexpected problems on the food systems. For example, the restrictions on movements have reduced the supply of seasonal workers in the farms. Shutdowns of different industries and labor shortages have also disrupted processing. Many dairy and meat processing companies have been forced to reduce their workers to comply with social distancing requirements. The disease is expected to double the unemployment rate in the industry. For example, in August only, the restaurants lost 417,000 employees, which erases the possibility of job growth in the sector in the future.
The food processing industries is expected to record numerous changes as the new generation of clients become health conscious. More people prefer to have healthier food options in their meal plans, and nutrients are prime. More consumers want plant-based products with 100% clean ingredients as the demand for buyers changes, food processing companies have to reevaluate their strategies. They have to deliver natural products that are also fresh. Supply chains in different parts of the country need to be reviewed. Plant-based, non-dairy products also drive a significant change. Food processing technologies are also expected to change in the future with a shift into electronic records.
The industry anticipates a steady of 2% by 2022, and the trailing of the global market is expected. The growth is driven by emerging markets like China, Argentina, India, and Brazil. A lot of innovations are also expected in the industry. Revenue in the industry is projected to reach $19 323 million by 2022. The markets are promising with meat & Poultry, fruits & vegetables, dairy, convenience food & snacks, and seafood. Major drivers in this industry are changing lifestyles, working women, need for ready-to-food, and increasing nuclear families. Significant opportunities exist for this industry in European companies and other regions in the world.