The Belgian Food & Beverage market grows at the expense of added value
Few sectors have been impacted more than the food and beverage sector. After the peak of energy prices came the spike in raw material pricing, with cacao and coffee beans breaking records. Add to that disrupted supply chains, newly imposed regulations, the impact of climate change… To add insult to injury, inflation is chasing labor costs through the roof, making it enticing to stay ahead of the competition.
What opportunities do these dynamics bring to the industry? And what roles can investors play, such as consolidation, cost cutting, innovation, etc.?
The food and beverage market is one of Belgium’s largest industries. In 2022, its market size was ~€75.5bn (up from ~€50bn in 2016), accounting for 13.5% of Belgium’s GDP.
From 2016-2020, the market remained stable with a CAGR of ~2%. In 2021, it grew significantly with a CAGR of ~13%, followed by an increase of another 23% in 2022.
This growth can mainly be attributed to inflation or price increases in materials (ingredients and packaging), logistics, and production costs (energy). These costs were only partly passed through to the consumer price …
Despite the constant market growth, the added value has decreased over the last few years.
Cost pressure is cannibalizing the gross margin, leading to a sharp decline in added value compared to the total revenue.
With global prosperity increasing, more and more people seek access to the consumption of meat, fish, and dairy products, growing the demand for food.
Nevertheless, the frontrunners in the Belgian industry are focused on future food requirements.
Some trends arise and are increasingly important:
The market dynamics, combined with these market drivers, are drawing the attention of corporate investors and stimulating M&A activity. These investors see opportunities for consolidation, innovation, and cost-cutting.
What trends are you observing, and how do you capitalize on them?
I'm happy to hear your thoughts and am ready to assist you with a deeper market analysis to further develop your strategy.
The Food & Beverage market includes all food and beverage companies that perform primary and secondary processing and are part of the larger agricultural value chain.
The market segmentation by the Belgian federal industry association Fevia segments member companies per channel, type of food processing, type of brand, and subindustries.
