Reps Are Moderately Bullish On 2017
It’s always a good thing when the folks on the street think the future looks promising. Manufacturers’ reps surveyed by the Manufacturers’ Agents Association for the Foodservice Industry remain optimistic about their sales in 2017. MAFSI released its annual market forecast in November. The reps forecast sales growth for like lines will increase 4.4% next year, very much in line with the current forecast of 4.5% growth this year. In comparison, Foodservice Equipment Reports forecasts 4.6% growth this year and an increase of 4.1% next year.
The outlook is positive across the five MAFSI regions and the product categories. Reps in the Midwest expect growth of 4.6%, those in the South and West predict 4.4% growth, while reps in the Northeast peg next year’s increase at 4.2%. Growth in Canada, where the economy has been challenged by low prices on oil and other commodities, is forecast at 4.1%.
The reps forecast growth of 5% for tabletop products, 4.6% for furnishings, 4.4% for equipment and 4.1% for durable supplies.
Factors that are driving the optimism include strong outlooks for both quotation and consultant activity. A majority of reps surveyed, 52%, predict more quotation activity in ’17, while 48% expect to see more consultant activity.
Growth is coming from segments across the foodservice spectrum. According to the data, reps forecast that the fastest growing segments will be chains, healthcare, schools, business and industry and college and university.
Michael Posternak, Principal at PBAC in New York, mentioned in his commentary accompanying the forecast that the positive outlook doesn’t preclude some concerns. He mentioned the economic impact of the election, rising minimum wages, a shortage of skilled foodservice labor, and the slowdown in quick-service restaurant sales.
But he concluded, “All in all, we have the momentum, fueled by a strong pipeline to weather most storms.”
The complete 2017 MAFSI Commercial Foodservice Market Forecast Report is available at mafsi.org. In addition to data from the reps’ survey, it includes forecast overviews from FER, Foodservice Equipment & Supplies, Technomic Inc., AutoQuotes Inc. and Canada’s Foodservice & Hospitality. We suggest you check it out.
And in a follow-up note to last month’s editorial about the conundrum of slowing chains sales versus independents and the rest of the industry, our friend consultant Barry Friends wrote us a note saying another factor is at work:
“In a nutshell, chains are generally struggling and independents are doing well. Why? Third-party delivery services. Chains resist them for fear of losing control (I don’t blame them), but independents have embraced delivery services and are enjoying tremendous incremental volume. I have a client in New York City whose ‘seamless,’ all-incremental volume increase is $880,000!”
What is always important to bear in mind is just how competitive and dynamic American foodservice remains.