Nov. 23, 2012 – GE Capital Canada recently released the results of its semi-annual Canadian
mid-market chief financial officer (CFO) survey. Here's a look at how
CFOs in food, beverage and agribusiness in Canada feel about business
this year.
Nov. 23, 2012 – GE Capital recently released its semi-annual Canadian mid-market chief financial officer (CFO) survey. Here's a look at how CFOs in food, beverage and agribusiness in Canada feel about business this year.
Current sentiment
Food, beverage and agribusiness CFO sentiment is essentially in line with the overall mean when it comes to the current state of their industry and the global economy, but they are slightly more pessimistic about their view of the Canadian economy.
Economic growth
Seventy-one per cent of respondents say the Canadian economy will stay about the same over the next 12 months, up five points.
Industry growth
An equal number of respondents — 71 per cent — say their industry will stay about the same over the next 12 months, also up five points.
Company growth
More than half (54 per cent) expect to be in a moderate growth phase over the next one to three years, up three points. Forty-six per cent expect a cyclical/limited growth phase, up 17 points.
Revenues
Fifty-eight per cent expect revenue growth this year, up one point. One quarter of respondents expect revenues to remain about the same, down four points.
Cost structure
More than half (55 per cent) expect an increase in their cost structure, up 23 points.
Business concerns
The factors most likely to impact business performance in the next 12 months are the costs of materials/supplies/equipment, cited by 83 per cent; energy costs, including oil and gas costs, cited by 79 per cent; and the strength of the Canadian dollar, cited by 71 per cent.
Pricing
Seventy-three per cent said pricing of their firm’s products or services would increase this year, up 18 points.
Hiring
Fifty-eight per cent said they have been hiring this year, up 10 points, and 63 per cent said they will be hiring in the next 12 months, down 12 points.
Equipment
Fifty-four per cent anticipate spending more money on equipment this year, compared to the average of 69 per cent.
Credit availability
Sixty-three per cent said that credit from their lender has remained the same, down 12 points. During their next round of financing, 79 per cent anticipate that their current lender will maintain credit availability, up nine points.
Questions asked only of food, beverage and agribusiness respondents
Concerns
They continue to be most concerned about commodity pricing; this figure held steady at 83 per cent. Additional concerns are food safety (75 per cent), labour costs (63 per cent) and the changing retail landscape (50 per cent).
Response to shifts in consumer spending and preferences
CFOs are divided, with 46 per cent implementing sustainability initiatives to reduce costs (up from 43 per cent), and 42 per cent increasing the use of in-store promotions and coupons (down from 60 per cent). Thirty-eight per cent lowered pricing (up from 20 per cent).
Influences on product offerings
When asked which two consumer preferences would significantly influence new product offerings in 2012, 54 per cent said value (unchanged from Q1’12) and 46 per cent said health and wellness (down from 51 percent).
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