This article was originally distributed via PRWeb. PRWeb, WorldNow and this Site make no warranties or representations in connection therewith.
Though manufacturers' sales branches and offices (MSBOs) are giving the industry a considerable advantage to previous practices, it brings about an uncertainty as to the future divide between wholesalers and manufacturers. Given the cloudy nature of the industry, total revenue is expected to increase modestly over the next five years mainly because of increasing beef and pork prices. Revenue will continue to be threatened by growing health concerns with red meat and substitution of pre-made and frozen meat products. For these reasons, industry research firm IBISWorld has updated a report on the Beef & Pork Wholesaling industry in its growing industry report collection.
Los Angeles, CA (PRWEB) November 25, 2012
Over the past five years, the Beef and Pork Wholesaling industry has had a hard time selling premium meats, especially during the recession. Though downstream customers generally maintained the quantity of meat they purchased, they often opted to buy lower-quality products, and the lower margins realized on such sales hurt profit growth; margins remained virtually flat over the five-year period. Besides financial limitations, health concerns have also challenged the industry. Increasingly, health-conscious consumers have sought to reduce their fat intake and lower their risk of heart disease. “Because red meat options are considered unhealthy, regardless of quality, consumers have been shifting toward protein sources outside of this industry, such as poultry and seafood,” says IBISWorld industry analyst Josh McBee.
Despite the changing nutritional landscape, high meat prices and stable downstream demand from retailers and food-service industries have helped offset declining beef consumption. IBISWorld expects revenue to decline at a marginal average annual rate of 0.5% during the five years to 2012, as recessionary losses offset previous and subsequent gains. Slowly recovering disposable income has increased demand from supermarkets and grocery stores, and revenue is expected to grow 1.9% in 2012 to reach $41.7 billion, McBee says. In the past decade, the business of wholesaling has undergone some structural changes. To begin with, a long-term trend toward wholesale bypass, in which processors sell their products directly to retailers to save costs, has suppressed industry growth. In addition, vertical integration between manufacturers and distributors has caused a decline in traditional wholesaling, making way for a new wholesaling generation made up of manufacturers' sales branches and offices (MSBOs). An MSBO in the Beef and Pork Wholesaling industry consists of a wholesaling division within a meat-processing company.
Through 2017, demand is projected to pick up, especially from food services establishments. Combined with rising prices for red meat, revenue is forecast to increase by 2017. Meanwhile, the MSBO structure will continue to solidify and benefit from economies of scale at the expense of traditional merchant wholesalers. Consolidation among the largest vertically integrated beef and pork processors and increased technological advances are forecast to reinforce healthy profit margins over the period. The concentration of ownership in the Beef and Pork Wholesaling industry is high. The four largest firms account for well over half of industry revenue, due in large part to increasing vertical integration and wholesale bypass. For more information, visit IBISWorld’s Beef & Pork Wholesaling in the US industry report page.
Follow IBISWorld on Twitter: https://twitter.com/#!/IBISWorld
Friend IBISWorld on Facebook: http://www.facebook.com/pages/IBISWorld/121347533189
IBISWorld industry Report Key Topics
This industry includes wholesalers of beef, pork and other red meat products. Canned and packaged frozen goods are excluded, as are poultry and seafood products. There are two types of wholesalers: merchant wholesalers, which include independent wholesaling operations, and manufacturers' sales branches and offices, which represent the wholesale division of vertically integrated meat processors.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.
For the original version on PRWeb visit: http://www.prweb.com/releases/prweb2012/11/prweb10166963.htm