High farming prices and labor shortages hurt food-makers’ profitability

M

Medium RISK for entreprises

  • Fragmentation

  • Internationalization

  • Capital Intensity

  • Profitability

  • Fragmentation

  • Internationalization

  • Capital Intensity

  • Profitability

  • Farming upstream segment enjoys high selling prices
  • Strategic sector usually supported by state aid in any case of social uprising risk
  • Agrifood demand fueled by Asia’s new middle class and larger disposable incomes
  • Resilience to periods of supply-chain disruptions as the global vaccination campaign expands
  • Rising demand in the market niche of organic food and responsible farming principles
  • Fierce price competition among food-makers in mass retailing
  • Environmental concerns related to the heavy use of pesticides and water, on top of the necessity to reduce upstream greenhouse gas emissions.
  • Labor shortages in the beverage segment, especially across Western Europe.
  • Food processing companies’ limited pricing power against wholesalers and retailers.
  • Food safety related to changing food supply/demand dynamics locally and globally.

Key players

Country Role Sector risk
China

#1 market by revenue

B

Medium risk

United States

#2 market by revenue

C

Sensitive risk

Germany

#3 Market by revenue

B

Medium risk