At EnSight Solutions, our team has the opportunity to speak and work closely with processors in virtually every sector of the food processing industry. In addition, we interact at trade shows and other events with other food equipment manufacturers.
These interactions provide us many useful insights into the industry, including what challenges processors are facing, their goals and longer-term plans and how the industry is faring in general, to name a few.
Let’s take a look back at 2024 and how the food processing industry fared.
2024 Activity
After the start of the COVID pandemic in 2020, the food industry increased production as people all over the world started staying home, forcing them to eat in more. The pandemic and time at home also caused a shift in people’s eating habits-more folks cooked and more looked at healthy options. In addition, many people and families adopted new pets while at home, which caused a large boost in the pet industry, too. Low interest rates also fueled a buying frenzy on new solutions.
That post-COVID rise continued until close to 2024, when the industry began resettling to pre-COVID levels. Demand for food hasn’t necessarily dropped, but rather just returned to “normal” levels after a three-year boost. In addition, inflation has caused many folks to change their purchasing habits, opting for less expensive and more convenient foods and meals.
Due to the election year, higher interest rates, lower demand and increased inflation, food processors significantly cut back on capital spending. They still expressed a lot of interest in new solutions, especially automation, but held off on making any big purchases in 2024. At EnSight, we still regularly sold single, smaller solutions, e.g., column dumpers and tilt dumpers. But in general, food processors in all sectors, even those that enjoyed a solid year, delayed large projects.
When asked, many processors said the return on investment (ROI) on big projects wasn’t justifiable.
To the EnSight team, this signaled that food processors are interested in automating more processes with new solutions, but were waiting for a calmer economic and political climate. Instead of investing in large projects, processors turned their focus inward to their processes, products and team members.
Processors worked on lowering costs to continue producing and shipping quality foods while spending as little as possible. Many put their attention on current machines, maintaining them to get as much extra time out of them as possible. Because of that, EnSight had a record year for parts sales. And if a machine needed to be replaced, processors looked for used options more often than ever.
This applied to food processors in every sector and of all sizes. Even companies with the capability to buy equipment outright and didn’t have to worry about loan interest rates chose to forgo large capital expenditures in 2024.
2024 Challenges
While the food processing industry wasn’t “down” in 2024, it did face some challenges in addition to the previously mentioned factors.
As it has been for at least 5 years now, labor continues to be a issue. It is more costly now than ever to hire quality team members, and when team members leave, it’s hard to find replacements.
While there weren’t necessarily any big “winners” or “losers” in 2024, the year had different effects on different sectors of the food industry. Beef suffered the hardest hit with its lowest headcount since the ‘60s. Snack foods also declined in sales. Poultry, on the other hand, started coming back in late 2024 after increased prices caused a decline in sales. Bacon remained strong all year, due in part to pork prices not rising as much as poultry. Beverages continued to be one of the strongest and busiest sectors.
In all sectors, one topic that was on everybody’s mind was automation, more so than ever. As mentioned previously, processors turned their focus inward in 2024 which prompted conversations about how automation could improve sanitation, food safety and worker safety. Worker safety came up a significant amount in 2024.
On an interesting note, the EnSight team had more conversations around robotics applications that wouldn’t be considered the norm. One example is pork belly palletizing. Typically, this is a manual job that can be hard on team members, and pork processors see it as an easy way to automate a fairly simple task and reallocate workers. Depalletizing was another topic processors have started expressing an interest in more.
Processors also showed more interest in integrating robotics on the primary side. For some, this would be a great way to increase the scope of their sanitary environment, increasing food and worker safety. This would also allow them to standardize their washdown practices for consistency and to make training easier.
While many processors expressed interest in automating processes, some were still hesitant due to the complexities of robotics and automated equipment. They worried, for example, that they didn’t have the right maintenance teams.
Like our customers, EnSight spent much of 2024 focusing internally, taking time to consider our product offerings, full-line solutions capabilities, automation and more. We worked on finding areas we could improve, from new machine designs to simplifying internal processes and more.
If you’re interested in learning more about EnSight and how we can help you overcome ongoing labor, sanitation and safety challenges, please contact our sales consultants.
We can help you determine which solutions would fit your needs best and even help you calculate the ROI based on your current processes and costs.
