Looking Back on ’23 & Forward to ‘24

As 2023 draws to a close, the EnSight team takes a look back at the trends and challenges food processors faced in the previous year, as well as what we expect to see in 2024.

2023 Trends

One of the biggest trends the EnSight team saw across the food processing industry was a significant decrease in capital investments. Since March 2022, federal interest rates have risen from .08% to 5.33% at the time of this writing. In response, many companies have put their capital expenditures on hold in hope that rates will fall again. Instead of buying new machines, many have opted to repair their current ones to keep them going for a little longer, until they’re ready to invest in new solutions.

In addition, the pork and poultry industries saw a downturn, resulting in products, e.g., bacon, becoming more expensive for consumers to purchase. This is largely in part to the increasing costs of raising animals from birth to production. In response to the decrease, some of the bigger food processors decided to shut down and/or consolidate their plants to lower costs.

2023 wasn’t all negative, though! In fact, we saw quite a few industries grow significantly.

Some of the biggest growth was in the beverage market, where plant- and natural-based drinks saw double-digit growth. Consumers are looking for healthier options that will also provide them their daily vitamin and mineral requirement, which has driven this growth. Coconut water and beverages featuring this ingredient saw the biggest gains of all, a trend we expect to continue as consumers become more health conscience and look for more convenient ways to hydrate and get their necessary vitamins.

Over the last couple years, EnSight has seen a steady increase in easy, ready-to-eat meals. And while that used to refer mainly to single meals, more and more families are turning to bagged/boxed premade meals they can easily cook or heat up. This is another trend that we expect to continue as more and more families realize the benefits of being able to quickly put a meal on the table in the midst of their busy lives.

On a surprising note, bakeries and sweet goods processors saw an exceptionally strong year in 2023. Our Likwifier division produced more mixing systems for icings and glazes than any previous year. This trend was also driven by consumers looking for more convenient, grab-and-go meal options. We also believe this trend was driven by consumers continuing to work from home, allowing them to enjoy foods like cinnamon rolls that they previously wouldn’t have due to being in the office.

We also saw interest in automation continue to increase. Processors are still struggling to hire enough people to run their lines, so they’re increasingly looking for ways to automate processes so they can reallocate team members to other areas of their facility. In addition, processors are now paying more for their labor, so they are considering ways to cut costs, especially in light of continuing meat and poultry price increases.

And the automation interest didn’t just apply to robotics. For example, our Likwifier division has helped multiple processors automate their mixing processes without installing robots. We have also seen more processors seeking to automate on the primary processing side, as well as at the end of the line with robotic palletizers.

On the OEM side, EnSight has seen material pricing level out and lead times remain steady and short. The exception was in the electrical department, where some electrical components still had long lead times to receive.

While we saw material pricing level, we did continue to see our own labor costs increase as we strive to hire and retain skilled welders, machine builders and others.

2024 Lookahead

Going into 2024, the food processing industry is poised to have a strong year. The beverage industry should continue to stay strong and grow, especially in regard to coconut water and other plant/natural-based drinks.

Additionally, we expect a lot of processors to start making capital investments again. This means that while lead times will remain short at the beginning of the year, they will start growing as the year goes on and more and more solutions orders come in.

2024 Advice

EnSight Solutions is ready to help food processors have a successful 2024. We recommend that processors start looking at their projects early to help avoid dealing with longer lead times later. Starting early will also help EnSight and other OEMs have more time to develop solutions, rather than just machines.

If your organization is interested in automation, we also recommend that you start consulting with your integrator early. As more processors look to automation to overcome labor shortages and costs, lead times for robotics and other automation solutions will get longer and longer.

 

At EnSight Solutions, we strive to develop solutions to help processors overcome a variety of challenges and produce the best product possible. If you’re interested in learning more about how we can help you share your special product with the world, contact our sales consultants.