Cookie and cracker production will accelerate: study

June 19, 2014, New York – The U.S. cookie, cracker and pasta production
industry's slow growth is expected to accelerate as consumers buy more
premium goods, says an IBISWorld report.

June 19, 2014, New York – The cookie, cracker and pasta production industry's slow growth is expected to accelerate as consumers buy more premium goods, says an IBISWorld report.

Over the past five years, the cookie, cracker and pasta production industry has achieved slow growth;
however, in the next five years, industry revenue is anticipated to
increase as the domestic market strengthens. For these reasons, industry
research firm IBISWorld has added a report on the Cookie, Cracker &
Pasta Production in Canada industry to its collection.

Improving discretionary income
levels allowed consumers to trade up to premium and branded goods,
helping lift industry performance. However, growing concerns regarding
the healthfulness and nutritional quality of products made with refined
white flour have placed downward pressure on the demand for traditional
industry goods. In response to these concerns, as well as diet trends
that curb the consumption of wheat-based food, producers introduced a
variety of brand extensions, including non-wheat pasta, gluten-free
cookies and nutrient-enhanced crackers. Product innovation and a
strengthening domestic economy are expected to drive industry revenue to
grow an annualized one per cent to $2.8 billion in the five years to 2014,
including a projected increase of 0.9 per cent in 2014.

“Producers
benefited from the growing demand for biscuits and pasta in foreign
markets,” said IBISWorld industry analyst Hester Jeon, in a media statement. Despite an appreciating dollar, exports increased during this
period, with the trend driven by the United States. Furthermore, the
United States accounts for over 90 per cent of total exports. The United
States imports biscuits and dried pasta from Canada because Canadian
imports are relatively more affordable than products produced in the
United States. While the industry benefited from increased foreign
demand for its goods, producers also faced intensifying competition from
foreign manufacturers. As disposable income increased, some consumers
traded up to imported products from the United States and Italy.

In the next five years, the industry is anticipated to grow as the
domestic market strengthens. “As disposable income levels continue to
improve, more consumers will trade up to premium, value-added goods at
retail stores, helping lift industry revenue,” says Jeon. Also, a
depreciating dollar will make Canadian goods more affordable in foreign
markets, facilitating the growth of exports. While producers will face
intensifying competition from foreign manufacturers and producers of
alternative goods, such as bread and potato chips, product innovation
and the introduction of healthier band extensions will support the
growth of the industry.

Overall, IBISWorld forecasts industry revenue to
grow over the five years to 2019.

For more information, visit IBISWorld’s Cookie, Cracker & Pasta Production in Canada industry report page .