PUBLISHER'S VIEWPOINT
April 2003
I Was Wrong

Brian always cautions me against the “Emperor has no clothes” act. Back in 2000, when I was devising new numbers on the size of the foodservice equipment & supplies market for the NAFEM Sales & Marketing Conference, he told me I was nuts. (“Nightmare,” I think I said.—Ed.) I had said I was going to tell the audience of manufacturer sales and marketing executives that I “made up,” or rather “created” the numbers (though I did so with the help of 30 or 40 close friends—experts in the product categories that were the base of the numbers). As is often the case, Brian’s caution was well founded, but I went ahead anyway.

So he’ll undoubtedly roll his eyes when I write here that my estimate of the growth—or rather lack thereof—of the E&S market in 2002 was wrong. I originally estimated—and we published in the January issue–—that the E&S market as a whole, at the manufacturer level, contracted 1.7% in real terms. This includes an estimated price inflator of only 0.2%, for a nominal contraction of 1.5%.

Now my friend John Muldowney of Clarity Marketing, who helps me with our market numbers and forecasts, has new data: calendar 2002 results for the publicly traded companies in our business. Performance was better than I estimated. The 18 companies John tracks report 2002 sales growth of 2.4% nominal. These companies account for nearly $4.5 billion in annual sales, or more than 40% of the total market that we estimate at $10.8 billion. This growth is nearly two points better than these same companies were reporting for the first nine months of 2002. Which is how I undershot the mark with my 2002 estimates.

John and I speculate that we underestimated the effect of fourth quarter comparisons with the extremely weak fourth quarter of 2001. You recall what that was like. Many of you operators bought little or nothing soon after Sept. 11. Everyone was very, very cautious.

So now I’ll have to go back and refigure my entire huge spreadsheet for 2002. By the time you read this, I will have done so. Those manufacturers and others who are interested can get the revised estimates by sending me an e-mail at the address below. I’ll send back the revision and also put you on the e-mail list for my periodic E&S market updates in PowerPoint.

One area Brian and I always agree is to admit you are wrong, especially when you have better information. And until I and NAFEM can talk all the manufacturers into reporting shipments and sales, we’ll always have to guess.

Cheers,

Robin Ashton
Publisher