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Soft Drink & Other Grocery Wholesale

Soft Drink & Other Grocery Wholesale

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Executive summary

Revenue for the Soft Drink, Baked Goods and Other Grocery Wholesaling industry has increased, rising at an annualized rate of 7.1% to $487.9 billion over the five years to 2022. Economic growth, and rising consumer confidence have increased industry demand in recent years as downstream markets experienced increased sales from consumers with more disposable income in their pockets. This is despite difficult conditions during the COVID-19 (coronavirus) pandemic. This industry covers a variety of products and has diversified revenue streams that sustain growth from different markets. The pandemic initially produced significant declines in demand from the food and hospitality industries, but create a temporary surge in grocery sales, benefiting industry operators. Since 2021, however, downstream demand has largely normalized, while rising agricultural and fuel prices have caused industry selling prices to spike. In 2022 alone, IBISWorld expects revenue to rise 16.0%. Despite volatile purchasing prices and increased competition from superstores and grocery chains the average industry profit margin has remained strong. While the pandemic produced a temporary decline, the industry has largely preserved profit margins by passing down costs to downstream markets.
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Each report includes:

industry revenue;

industry profit;

industry margin;

industry employment;

industry major players;

industry key external drivers;

industry product & structure segmentation;

industry key trends;

industry Life Cycle;

industry Geographic Breakdown;

industry Key Success Factors;

industry Key statistics for previous years;

forecast of industry Key statistics for the next 5 years;

Reference Wordlist

BARRIERS TO ENTRY
High barriers to entry mean that new companies struggle to enter an industry, while low barriers mean it is easy for new companies to enter an industry.

CAPITAL INTENSITY
Compares the amount of money spent on capital (plant, machinery and equipment) with that spent on labor.
IBISWorld uses the ratio of depreciation to wages as a proxy for capital intensity. High capital intensity is more than $0.333 of capital to $1 of labor; medium is $0.125 to $0.333 of capital to $1 of labor; low is less than $0.125 of capital for every $1 of labor.

CONSTANT PRICES
The dollar figures in the Key Statistics table, including forecasts, are adjusted for inflation using the current year (i.e. year published) as the base year. This removes the impact of changes in the purchasing power of the dollar, leaving only the "real" growth or decline in industry metrics. The inflation adjustments in IBISWorld’s reports are made using the US Bureau of Economic Analysis’ implicit GDP price deflator.

DOMESTIC DEMAND
Spending on industry goods and services within the United States, regardless of their country of origin. It is derived by adding imports to industry revenue, and then subtracting exports.

Colloquial Terminology

PRIVATE-LABEL
Products sold as the house brand of a particular supermarket or retail chain, rather than the specific manufacturer.

RADIO-FREQUENCY IDENTIFICATION (RFID)
A technology that tracks products from the time they leave the assembly line to the time they leave the store by releasing continuous signals from a chip.

WHOLESALE BYPASS
A popular trend within retail and manufacturing industries in which producers supply goods directly to stores, eliminating the middleman.

Details

The industry is heavily fragmented, and some smaller companies experience difficulty when competing with larger operators that have established relationships with large retailers. However, retail demand has remained consistent over the past five years to sustain niche operators and attract new ones to the industry. Consumers have increased the quantity and quality of their grocery purchases as income levels have increased during the period, aiding industry revenue growth and increasing the number of industry enterprises.

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