According to the recently released 2002 Industrial Outlook ( http://www.industrialinfo.com/indoutlook.htm ), food & beverage companies will continue restructuring to find growth in 2002.
Merger, acquisition and consolidation trends will continue to shrink the industry as food and beverage processors maintain their ravenous appetite for acquiring assets that can help increase their market share and improve efficiency. Five of the biggest industry players now control about 50% of sales in this industry sector in the United States.
Since improved efficiency is one of the typical reasons for mergers and consolidations, often the result is the closure of less-efficient plants. Once that process begins, there are many related decisions that need to be made that quite often can lead to decisions regarding the consolidation of other facilities in a company and sometimes replacing an aging facility with new construction. Capital spending on new construction and expansion projects will vary by region and industry segment in 2002.
Since the beginning of the year, Industrialinfo.com has been tracking activities in mergers and acquisitions and also plant closings. 181 plants in the U.S. and Canada have closed their doors and over 85 major mergers/acquisitions have been made for the year 2001. Companies seeking to construct new facilities are also facing more stringent state and local regulations regarding air emissions and water pollution. Given the increasing cost of capital investment, manufactures are more likely to expand, when possible, rather than build new plants.
IIR's recently released 2002 Industrial Outlook, available on CD-ROM, outlines in detail issues and trends plus capital spending and MRO projections that will drive the food & beverage industry in 2002.