Industry challenges

The need for cost saving in 2009 is pretty clear to all of us within the food and beverage business, with reduced consumer demand and increased fluctuations in cost and supply of raw materials.

The latest DSM market intelligence confirms the various challenges now facing the industry.

Sliding share prices continue to put more pressure than ever on delivering shareholder value and EPS.

Reduced month-to-month growth in the food and beverage industries was languishing at around –4% in October 2008 (see graph below commented by DSM Food Specialties market Intelligence)

A sharp fall in new product launches around the world from around 7,000 in Jan 2008 to some 5,000 in Jan 2009.

Extreme softness in the dairy industry with weak consumer demand and falling costs (production has dropped 20% in China alone)

Fears for supply as the global agricultural industry beings to simply wonder, “Is it all worth it?”

We see that in December the index stood at -2,4% compared to December 2007. In November 2008 the index was -3,3% and in October -3,8%.