Snack World - November 2012 - (Page 13)

produced on all fronts within the food industry are better than they were 10 years ago. When you take the combination of the economy and better quality, you have a recipe for success in private label.” Private label, however, is not a winner for all manufacturers, according to Steve Aanenson, CEO of Old Dutch Foods, Inc. Roseville, MN. “The difficulty for a manufacturer in the private label business is that it is generally done on a bid basis,” he said. “It’s bid on a yearly basis, and it’s difficult to justify making capital improvements on a business you can have one year and lose the next. From a manufacturer’s perspective, it’s not something you want to bet the farm on.” Nonetheless, private label is expected to grow for the long term and put pressure on traditional branded products, especially because higher commodity and packaging costs have driven up prices on nationally branded products. A study released in October 2011 by Rabobank’s Food and Agribusiness Research department (FAR) predicted the global private label market would double by 2025 — from 25% to 50%. Some retailers such as the fast-growing Trader Joe’s sell no branded snack products but have an array of salted snacks under their own names. In the snack business, as in most other food categories, manufacturers have responded to higher raw material, packaging, manufacturing and transportation costs by both raising prices and reducing the amount of product in the package. Today, larger snack bags, especially potato chips, contain somewhere between 9 and 11 oz and, when not discounted, a price tag just below $4. Undoubtedly, snack manufacturers will continue operating under the cloud of rising operating costs. The biggest question mark will be fuel prices. In a transportationintensive industry where a major share of the product is delivered directly to stores, fuel prices are watched almost as intently as commodities. sw With over 100 years of combined experience working in the food and beverage distribution industry, our seasoned experts can help you move to an independent distribution system and: www.sfa.org November 2012 Snack World 13 http://www.dci-dsa.com http://www.sfa.org

Table of Contents for the Digital Edition of Snack World - November 2012

Snack World - November 2012
Table of Contents
Letter from SFA - Strengthening SFA
Supplier's Corner - Suppliers Get Value from SFA
75th Anniversary - Navigating the Road Ahead
75th Anniversary - Let's Get Political
Bowing Out
Milestones - Golden Oldies
Government Affairs - Post-Election Actions
Industry Images - Back to School
Meeting Preview - Building Business Together
New Snacks
Products & Services
Ad Index

Snack World - November 2012