There is light at the end of the pandemic tunnel

Growth in the number of vaccinations and a softening of coronas measures led to more optimism in most branches of the food industry at the start of the second quarter of 2021. This is evident from an analysis of recent CBS figures by our editors. 

Turnover in the food industry declined by 3 percent in the first quarter of this year compared to the same quarter last year. With a 4.5 percent drop in turnover, exports were especially negative. Domestic turnover fell by 1.3 percent. The turnover recovery that the sector cautiously showed in the third and fourth quarters of 2020 - after the hefty turnover blow caused by the Corona crisis in the second quarter of 2020 (almost 6 percent less turnover) - therefore seems to be fading. 

Dissatisfaction concerning order position

On balance, not one branch in the food industry was satisfied with its order position at the beginning of the second quarter. Manufacturers in fish processing (-28.3 percent), slaughterhouses and meat products manufacturers (-27 percent) and the edible oils and fats industry (-24.6 percent) in particular regarded their order positions as too small rather than too large.

Source: CBS

Number of businesses increases, few bankruptcies

Nevertheless, the number of companies in the food industry rose by 6.3 percent from the beginning of 2020 to the beginning of the second quarter of 2021: from 5,970 to 6,345. In the dairy industry, the number of companies went up from 310 to 330 (+6.5 percent) and in the bread and pasta industry from 3,260 to 3,465 (+6.3 percent). The number of companies in the fish processing industry (145), the edible oils and fats industry (50) and the flour industry (110) remained the same during this period. 

In the first quarter of 2021, 295 companies were founded and 105 disbanded in the total industry. The bread and pasta industry took the lead in both new business start-ups (185) and terminations (55). In the slaughterhouses and meat products industry, the number of new companies was the same as the number of companies shutting down (15). In total, 20 companies went bankrupt in the food industry during the corona period so far; 16 in 2020 and 4 in the first four months of 2021. More than half (11) of the bankruptcies occurred in the bread and pasta industry.

Workforce 

Most food manufacturers anticipate an increase in staff in the second quarter of 2021. Relatively the largest increase is expected in the fruit and vegetable processing industry, where 26.2 percent expect to take on more staff. In the bread and pasta industry, too, a large percentage of businesses are positive about increasing their staff (+16.4 percent). Only the flour industry (with -34 percent) and fish processing industry (-7.8 percent) expect staff reductions during this period. 

Source: CBS

Improving prospects 

For the total food industry, we looked at turnover expectations for the second quarter of 2021. These figures represent the percentage of entrepreneurs who expect turnover to increase minus the percentage of entrepreneurs who expect turnover to decrease. On balance, 17.2 percent of entrepreneurs think turnover will increase in the second quarter. This is the highest score since the fourth quarter of 2019, when 20.3 percent expected increasing turnover.       

The fruit and vegetable processing industry was the most optimistic: 46 percent of entrepreneurs predict higher turnover in the second quarter compared to the first. Businesses in the edible oils and fats industry were also considerably positive about this (+10.5 percent); the dairy industry (+19.3 percent); the flour industry (+13.4 percent); and the bread and pasta industry (+20.8 percent). Less optimistic were entrepreneurs in the slaughterhouses and the meat products industry (+0.2 percent) and the animal feed industry (+1.5 percent). The fish processing industry was the only sector where the pessimists had the upper hand (-5.7 percent). 

Steep increase of output prices 

Output prices rose considerably between April 2020 and April 2021; by 5 percent. In the first three months of this year, prices in the food industry already rose from +0.1 percent in January to +2.8 percent in March. The substantial price increase in April is mainly accounted for by the edible oils and fats industry (+29.2 percent). Only fish processors saw a 2.3 percent decrease. The fish processing industry does not expect the economic climate to improve for them. The situation is different in the bread and pasta industry; 15.5 percent of these entrepreneurs expect an improvement in the second quarter. The fruit and vegetable processing industry tops the list. On balance, half of them expect an improvement in this period.

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