Foodservice Equipment Reports

Reps Eye 2013, Forecast 4.7% In E&S Sales Growth

The MAFSI Business Barometer unexpectedly improved in the third quarter, as overall sales for manufacturers’ reps climbed to 4.3% in the quarter versus sales in the same quarter last year, the best performance since a 4.7% gain in quarter four of 2011. The survey is fielded quarterly by the Manufacturers’ Agents Association for the Foodservice Industry.

And in their first read on the coming year, the reps forecast current dollar growth of 4.7% in calendar ‘13. Michael Posternak, principal at rep firm PBAC, who analyzes the data for MAFSI, mentioned in his commentary that this forecast might have “an optimistic bias.”  But, as he added “Would you really want a negative sales team?”  Foodservice Equipment Reports recently revised its ’13 forecast downward by half a point to 3.6% to reflect significant uncertainties about the climate for E&S spending by operators next year. (See article here.)

The 4.3% growth rate was unexpected in part because combined sales of seven publicly reporting E&S companies, representing more than $3.5 billion in annual sales, showed no growth in the third quarter. But the difference also results from the global component of many big E&S conglomerates. Several have significant sales in Europe, where E&S sales have plummeted as many countries have fallen into recession. Posternak noted the North American-only aspect of the Barometer.

And in spite of the gain, several worrisome trends are clear from the survey. The percentage of reps who report they are quoting more fell to 39%, the lowest level in two years. And only 25% report increased activity among consultants. As a result, the reps do expect the market to slow in the fourth quarter. Their forecast for sales gains compared to 4Q/’11 is 3.8%.

The complete MAFSI Barometer, including forecast and details by region and product category, can be found at     

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