KPMG Survey: Food and Beverage Executives Expect Higher Revenue and Increased Profitability...

KPMG Survey: Food and Beverage Executives Expect Higher Revenue and Increased
Profitability in 2010
Leaders Also Expect Improved Jobs Outlook in 2010; Nearly Half Still See U.S.
Economy as a Whole Not Recovering Until 2011 or Later

NEW YORK, Aug. 19 /PRNewswire/ -- Senior executives in the food and beverage
industry are optimistic they will see improved revenue, profitability and a
better jobs picture in 2010 according to a recent survey conducted by KPMG
LLP, the audit, tax and advisory firm.

In the KPMG survey, which focused on the food and beverage industry
specifically, 72 percent of the executives said they expect business
conditions to improve in 2010 with 72 percent also expecting stronger revenue
and 65 percent expecting improved profitability. However, 48 percent of the
food and beverage executives believe the U.S. economy as a whole could take as
long as 2011 or later to substantially recover.

Overall, 86 percent of food and beverage executives see an improving jobs
picture in their sector in 2010, with 54 percent saying it would be stable and
32 percent saying it would be better than 2009. At the same time, nearly half
of them (48 percent) said they had already instituted headcount reductions and
only 22 percent were contemplating further such actions.

"These survey results show a cautiously optimistic outlook from industry
execs, even as the underlying volatility in the food and beverage
sector--based on companies wrestling with the sting of higher costs, shrinking
consumer spending, and working capital constraint--continues to develop," said
Patrick Dolan, KPMG LLP national line of business leader - Consumer Markets,
and U.S. sector leader - Food, Drink and Consumer Goods. "With the food and
beverage industry in the midst of potentially disruptive change--led by
accelerating technological, social, and economic shifts--the executives
surveyed are still upbeat about their future, though much hard work remains."

The KPMG survey also asked food and beverage executives to indicate if their
strategic focus was now on investing for growth or cutting costs. Almost
two-thirds (63 percent) chose the investment option, but 37 percent said they
were still focused on cost cutting.

CONSUMERS THE KEY TO RECOVERY

When survey respondents were asked to identify the triggers they think will
spur a U.S. economic recovery, the top three factors by far were increased
consumer spending (46 percent), an increase in jobs/employment (also at 46
percent) and improved consumer confidence (45 percent).

BIGGEST CHALLENGES TO RECOVERY

When asked to identify the biggest challenges they currently faced in dealing
with the economic downturn, food and beverage leaders most frequently cited
finding new sources of revenue growth (58 percent), managing/cutting costs (52
percent), managing risk (49 percent) and adjusting to changing customer demand
(42 percent).

INFORMATION TECHNOLOGY, CUTTING CAPITAL EXPENDITURES AND RISK MANAGEMENT ALL
PART OF RECOVERY EFFORTS

Interestingly, 82 percent of food and beverage executives cited implementing
IT solutions to reduce operational costs as a means to adjust to the downturn.
Almost two-thirds of food and beverage executives (63 percent) cited cutting
capital expenditures as a way to adjust to the economic downturn.

When asked to identify how they were coping with the economic downturn, almost
two-thirds (63 percent) of the food and beverage industry executives said they
had created or modified their risk management plans.

INDUSTRY WELL-POSITIONED FOR RECOVERY

Notably, 60 percent of the respondents said they thought the food and beverage
industry would fully recover ahead of the U.S. economy. Also, 65 percent of
food and beverage executives surveyed believe their business is currently
well-poised to take advantage of an economic recovery.

"Current industry business models are under intense pressure but our
experience with food and beverage companies finds that those that translate
customer understanding into value and cost-effective innovation, and that
succeed in gaining a single view of their liquidity position, their underlying
supply chain, and the alignment between performance and risk can better
withstand the system shocks created by market volatility," said Dolan.

THE KPMG INDUSTRY PULSE SURVEY

The KPMG survey was conducted from May through July of 2009 and reflects the
responses of 65 CEOs and other C-level suite executives in the food and
beverage industry. About 20 percent of respondents work for food and beverage
companies with annual revenues exceeding $1 billion; 29 percent represent
companies with annual revenues in the $250 million-$1 billion range and 51
percent represent companies with annual revenue below $250 million. Clarion
Research Inc. conducted the survey and compiled the data.

About KPMG LLP
KPMG LLP, the audit, tax and advisory firm (www.us.kpmg.com), is the U.S.
member firm of KPMG International. KPMG International's member firms have
137,000 professionals, including more than 7,600 partners, in 144 countries.

The views and opinions expressed in the survey results are based on the
responses of the survey participants and do not necessarily represent the
views and opinions of KPMG LLP.

Contact: Kevin Beagley/Ray Zardetto
KPMG LLP
Tel: 312-665-5010 / 201-307-8494
Email: kbeagley@kpmg.com/rzardetto@kpmg.com

SOURCE KPMG LLP

Kevin Beagley, +1-312-665-5010, kbeagley@kpmg.com, or Ray Zardetto,
+1-201-307-8494, rzardetto@kpmg.com, both of KPMG LLP