FIRST

RESEARCH

FAHAD IQBAL

FIRST RESEARCH

• Leading provider of industry intelligence tools

• Help sales and marketing teams perform faster and

smarter, opening doors and closing more deals

• Outreach efforts with up-to-date industry information that

demonstrates a thorough understanding of your

prospects’ challenges and opportunities

• The following is a sample of a First Research Industry

Report

SNACK FOOD

MANUFACTURING

INDUSTRY OVERVIEW

• Companies in this industry make snack foods such as nuts,

chips, and popcorn, as well as peanut butter

• Industry generates about $300 Billion in revenue worldwide

• Largest Market : Europe and US

• Fastest Growing: Asia, Eastern Europe, Latin America

• US Snack Foods includes about 500 companies with annual

revenue of $27 Billion

COMPETITIVE

LANDSCAPE

• Demand driven by consumer tastes and health

considerations

• Profitability depends on efficient operations, effective

marketing and strong sales force

• Industry is highly concentrated

• Top 50 companies account for 90% of industry revenue

PRODUCTS, OPERATIONS

& TECHNOLOGY

PRODUCTS, OPERATIONS

& TECHNOLOGY

Major Products:

• Corn chips, bulk nuts, peanut butter, popcorn, potato chips

After Production:

• Rejected Potatoes (Animal feed)

• Starch (Starch processors)

Technology:

• Advanced quality control measures (sensors)

• Quality control managers

• Multiple manufacturing plants (cost reduction)

• Advancement in creating crunchier chips

• Genetically modified potatoes

SALES AND

MARKETING

Typical Customers:

• Grocery wholesalers, warehouse club stores, vending

machine distributors, convenience stores

• Major sales channels:

• Independent distributors, third-party brokers, internal sales

force, direct store delivery

Marketing:

• TV, radio ads, coupons in newspaper, magazines, internet

• Customer service operations (help lines for suggestions or

reporting)

• Websites

FINANCE AND

REGULATIONS

• Cash flow is steady throughout the year

• Companies enter multi-year contracts with key suppliers

to limit costs

• Gross margins: 30% to 40%

• Finished good inventory sale: 60 days

• Receivables: 30-45days

REGULATIONS

• Industry is highly regulated by federal and state

governments

• FDA oversees food safety

• Food allergic labeling and consumer protection act

FALCPA

• OSHA manages workplace safety

• EPA monitor environmental protections

• Government taxes for controlling snack consumptions

INTERNATIONAL

INSIGHTS

• Generates $300 billion revenue

• $380 billion by 2017

• Europe is largest snack food manufacturing region and US is

second

• Competition is fierce: small companies compete with

regional multinational companies

• MNCs create new flavors to match regional taste preferences

• Less healthy products in US are more popular in Asia

HUMAN RESOURCES

• Hourly wages are slightly lower than national average

• Workers must have basic mechanical and technical skills

• Online education for managers

• Annual injury rate are 50% higher than national average

CRITICAL ISSUES

Volatile ingredients prices

• Increase in price due to poor farm yield

• Prices of white potatoes fluctuate 25% to 50% every year

Highly competitive industry

• Cookies, candies, crackers, energy bars

• Private labeling offerings

BUSINESS

CHALLENGES

Vulnerability to regulations

• Increased awareness of obesity, ingredients

• Usage of word “Natural” on labels

Dependence on large customers

• Buying power in hands of large supermarkets

Dependence on consumer tastes

Cost of product innovation

BUSINESS TRENDS

• Healthier products

• Private label category grows

• Shrinking display space

INDUSTRY

OPPORTUNITIES

• Boosting convenience stores

• Reinventing nuts

• Promoting sustainability

• Spicier flavorings