Editor's Journal: A stronger 2011 - with challenges
January 1, 2011
Understandably, the most driven people in the world believe that standing still is the equivalent of going backward, but as the year 2011 arrives, it leaves me to wonder if there is ever a moment for the protein-processing industry to assess the landscape anymore?
After nearly three years of uncertainty and scrambling, it appears that 2011 will be no more “relaxed” than any other year. Here’s hoping your business is prepared for all that’s to come.
First and foremost, the entire business world must deal with the sputter-start economic “recovery” which has been in the works for a while. Investors, businesses and the like appear to feel no more certain about the direction of the economy than they did last year â€” with unemployment still high and the “bulls” and “bears” duking it out day-in and day-out, neither gaining long-term control of the driver’s seat.
Next, the food industry still must deal with the consequences of recalls and contaminated product. This alone has taken up much of the protein-processing industry’s time of late. The meat industry hasn’t had a “Jack-in-the-Box” incident lately, and food-safety measures have improved greatly â€” but that doesn’t mean processors and producers should rest on their laurels.
Also, in what almost seems like a mean-spirited joke by the USDA, down the pike comes the revamped Grain Inspection, Packers and Stockyards Administration (GIPSA) livestock marketing rule. If this proposed rule is approved, the economic impact will send shockwaves through the industry â€” prepare now for those waves.
Rumors of increased M&A activity have also reverberated through the halls of the industry â€” with the hot topic just before the holidays being the possible takeover of Sara Lee by JBS. Market analysts also believe that other businesses could be on the block in the new year, and M&A activity has been on the upswing in many other industries in recent months. Any large M&A activity is sure to carry repercussions (positive and negative) for the entire business.
Lastly, the meat industry will likely have to adjust to the “new normal” in consumer spending, particularly in the area of home-cooked food vs. eating out. Just as businesses have been hesitant to jump back in to the spending pool with both feet, consumers have learned new habits to allow them to save up some of their hard-earned money.
The protein-processing industry has done a great job catering new products to consumers making these demands, and it needs to continue to provide convenience and guidance to customers who want to cook at home.
So, as we enter 2011, while this editor believes the economic arrow is pointed upward overall, he also believes the climb could be bumpy -- not much different from the climb in 2010. Make sure your business is buckled in tightly for the ride.