Not unlike other industries, the food and beverage markets saw hardships throughout 2020. Going forward, various market segments are likely to see ongoing challenges. Navigating the proverbial waters can be tough and a skilled food business consultant can help you achieve your goals and avoid problematic issues in 2021.
Problems with Market Concentration
Cornering a market segment is a good thing, until you get too large. What happens to companies that become too successful with market concentration? For starters, competitors often merge or acquire smaller companies which gets the attention of law enforcement over antitrust allegations.
Assertions of price-fixing or setting artificially high prices are also common for companies who dominate an industry which leads to class-action civil lawsuits and other litigation. This has an impact on the entire industry. In 2020, regulators focused on tech, but the food industry is another market they are watching. It would not be surprising to see more activity in 2021.
Small or struggling companies can develop smart approaches to focus on innovations in 2021 rather than selling off to the big guys – a food business consultant can help develop a strategic plan.
Price Fixing vs. Gouging in Pandemic Conditions
The COVID-19 pandemic sent the economy reeling in 2020 and many companies were accused of gouging to make a quick profit. Those businesses in question maintain the spike in demand caused prices to soar. Law enforcement seems to disagree, stating due to the nature of the pandemic, the situation constitutes an emergency, and demand for food was not due to routine market forces. Going forward, it’s almost certain food industry regulators and law enforcement will be watching closely to ensure gouging doesn’t occur.
Recovering From the Pandemic
In 2020, many food and beverage companies struggled and will spend much of 2021 recovering from the conditions set by the pandemic. Struggles to recover from including restrictive containment measures driven by social distancing requirements, supply chain disruptions, remote work, temporary closure of stores and, in some cases, revamping business models to accommodate pandemic conditions.
Additionally, most had to quickly adapt and implement technology solutions to facilitate social distancing and touchless processes. Pivoting to a technology strategy was both a learning curve and expense for many companies. One some will still be reeling from throughout 2021. However, in the long-term, these strategies can be used as an advantage to gain a stronger standing in niche markets. Projections say the food and beverage stores market will increase from $1707.29 billion in 2020 to $1872.9 billion in 2021. By 2025, the projection jumps to $2472.93 billion as companies rebound from the pandemic.
Ready to Work with a Food Business Consultant? Contact The Greater Good Today
The Greater Good offers consultant services for businesses in the food industry. Our Ontario-based company works with customers in both Canada and the United States, offering them a wide range of solutions for challenges the industry currently is facing. Ready to learn more? Contact us today for a free consultation.