Grassi, NJFPA release 2023 Food Manufacturers Survey

Despite inflation, supply chain disruptions and higher labor costs, New Jersey’s food manufacturing industry is continuing its post-pandemic rebound, a new report finds.

Released March 17 by the New Jersey Food Processors Association (NJFPA) and New York-based accounting firm Grassi, the 2023 State of Food Manufacturing survey showed that, overall, food manufacturers and distributors are seeing rising growth and revenue gains and expect the trend to carry through the next 12 months.

The annual survey, which was initially launched in 2021, aims to assess the state of the industry locally as well as identify trends from the past year. It also seeks to pinpoint opportunities and challenges for the year ahead.

In commenting on the latest results, Sam Pipitone III, NJFPA president and vice president of Vineland’s F&S Fresh Foods, highlighted the positive findings, saying the industry is holding up well in the face of pricing and inflationary pressures.

“Just as importantly, it reveals the innovation and strategies companies are using to sustain this upward trajectory,” Pipitone said.

Administered in January and February, this year’s questionnaire – which is presented in partnership with Crain’s New York Business – includes feedback from 141 online respondents and 20 focus group participants.

The majority of respondents (60%) are owners, presidents/chief executive officers and C-level executives from companies across the industry, with food manufacturers the most strongly represented, according to the report.

• 67% reported that their revenues increased in 2022 and 82% are optimistic that they will increase this year, as well;
• 60% credited the growth to improved employee productivity—thanks partly to more streamlined processes and automation, improvements in customer relations, marketing/sales strategies and workplace safety.

The three most common distribution strategies companies are using to overcome challenges are improving customer service (52%); increasing the use of analytics to optimize production, distribution or customer service (40%); targeting new distribution channels (40%); and increasing sales force (34%).

Supply chain woes ranked the highest of this year’s obstacles, followed by inflation and increased labor costs, the survey found.

When asked what strategies they are employing to combat rising costs, absorbing a portion of the costs ranked highest, followed closely by renegotiating costs with vendors and passing some of the costs on to consumers. Food manufacturers, however, know they may be hitting the ceiling on cost increases that they can pass along to customers without facing steeper pushback, according to the report.

Nearly 60% are concerned about staffing levels for 2023, including almost three-fourths of those at larger companies. While businesses reported looking into more line automation (49%) as a solution and hiring temporary workers (38%), a greater emphasis is on their employees, with 54% looking at flexible scheduling and 53% offering financial incentives.

Despite rising interest rates, 69% plan to increase capital spending this year. Sixty-five percent expect to invest in technology, while 56% will look to expand production lines, and 48% are set to begin projects to enhance facilities and buildings.

A copy of the full report can be downloaded here.

Robert Grote, Grassi’s Manufacturing & Distribution Practice leader, said the firm was “thrilled to partner with NJFPA again this year “to bring the food and beverage sector this valuable benchmarking tool.”

He went on to say, “These insights into industry-wide trends, such as shifting consumer demands, supply chain disruption and inflation, bring unique opportunities for businesses to evaluate their own positions and plan for strategic growth.”

‘Complicated’ recycling bill faces uphill battle

A measure designed to hold producers of packaging products sold in New Jersey accountable for the costs associated with recycling and disposing of their material will likely face an uphill battle in the state Legislature. Click here to read the story.