Pumps in european food and beverage industry

Pumps in European Food and Beverage

Industry: Aligning Obligation with Opportunity

Will Increased Demand for Processed Food Aid Growth?

Niranjan Paul, Research Analyst

Industrial Automation & Process Control

10/04/2013

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Our Presenter

Experience in the field of consulting and market research across the

Industrial Automation and Process Control Division. Particular expertise in

the European Pumps, Valves and Compressors (PVC) segment, growth

consulting research and generating market focused intellectual property.

A strong theoretical background in market research with technical

expertise in customer profiling in the field of consumer research.

Niranjan Paul, Research Analyst

Frost & Sullivan

India

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Agenda

Market Segmentation

Market Analysis

Key Trends

Market Overview

Key Metrics

Market Drivers and Restraints

Conclusion

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Market Segmentation

Source: Frost & Sullivan analysis.

Segmentation by Pump Type Segmentation by Vertical Market

Note: Others* include applications such as

fruit and vegetable processing, packaging,

chemical dispensing, etc.

• Bakery and Confectionary

• Milk and Dairy

• Processed Food

• Beverages

• Others*

• Centrifugal Pumps

• Positive Displacement Pumps

• Vacuum Pumps

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European Regions included in the study are as

following:

• Germany

• France

• Italy

• The United Kingdom

• Scandinavia (Denmark, Finland, Norway and

Sweden

• Benelux (Belgium, Netherlands and

Luxembourg)

• Iberia (Spain and Portugal)

• Rest of Western Europe (ROWE) (Austria,

Greece, Ireland and Switzerland)

• Eastern Europe (EE) (Poland, Hungary, The

Czech Republic, Slovenia, Slovakia, Lithuania,

Latvia, Estonia, Bulgaria and Romania)

Market Segmentation

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Market Overview

Current Market Scenario

• The European pumps market for the food and beverage industry is a mature market. It generated revenues of $648.6 million in 2012 and is projected to post a compound annual growth rate (CAGR) of 1.5 percent between 2012 and 2017.

Growth Opportunities

• Increased demand for convenience food is likely to provide growth opportunities for the positive displacement pumps market.

• Increased health awareness, along with government initiatives to tackle health issues, such as obesity, could result in the growth of the pumps market in the functional drinks segment, such as sports and energy drinks.

Competitor Landscape

• Manufacturers of single-stage centrifugal pumps, rotary lobe and progressive cavity pumps are the leading market participants.

• The top five participants have a 50.1 percent of the total European food and beverage pumps market.

CEO 360 Vision

• Pump manufacturers are likely to establish assembly units in Eastern Europe, to be closer to the production facilities of food and beverage companies.

• The pumps market in Italy and Iberia are expected to recover in the long term of the forecast period and is expected to offer growth opportunities to pump manufacturers.

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Market Overview

• Eastern Europe

• Germany

• France

•Processed Food

•Functional Drinks

Key Regions:

Geographic

Trends Vertical Market

Trends

Product

Trends

Pricing

Trends

Key Markets:

•PC Pumps

•Lobe Pumps

•Single-stage

Centrifugal Pumps

Key Pump Types:

•Price increase of

1.0-2.0 percent in

2013 due to

increasing cost of

raw materials.

Implications:

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Market Analysis

Note: All figures are rounded. The base year is 2012. Source: Frost & Sullivan analysis.

Total Pumps Market for Food and Beverage Industry:

Per Cent Revenue Forecast by Pump Type,

Europe, 2012

Total Pumps Market for Food

and Beverage Industry:

Revenue Forecast, Europe,

2009–2017

CAGR = 1.5%

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Market Analysis

Note: All figures are rounded. The base year is 2012. Source: Frost & Sullivan analysis.

Total Pumps Market for Food and

Beverage Industry: Percent Revenue

Forecast by Region,

Europe, 2012

Total Pumps Market for Food and

Beverage Industry: Percent Revenue

Forecast by Vertical Market,

Europe, 2012

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Market Drivers and Restraints (Current and Future)

Denotes long-term impact Denotes current impact Source: Frost & Sullivan analysis.

Driv

ers

R

es

train

ts

Driv

ers

R

es

train

ts

Growth of the processed food

segment

Expansion of food and beverage

production facilities in Eastern

Europe

Increased demand for

energy efficient pumps

Declining population in

Europe

Prevailing financial crisis in

Europe

Increased focus on

refurbishment and maintenance

of existing pump installations

European Food and Beverage Pumps Market: Key Drivers and Restraints, Europe, 2012–2017

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Key Trends

Source: Frost & Sullivan analysis.

Market Trends

Increasing

demand for

Peristaltic

Pumps

Increasing

Energy

Efficiency

A Major Pump Manufacturer

“There is no real clarity regarding the standards. The FDA is present in USA and the EHEDG in Europe and there are different product ranges depending on whether 3-A Sanitary Standards or CIP standards are required.”

A Major Pump Manufacturer

“Manufacturers are looking to make incremental gains on products based on existing technology, rather than developing a revolutionary product as the food and beverage industry is conservative pertaining to the use of new materials.”

Requirement

for innovative

technologies

such as smart

conveyance

and EZstrip

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Key Metrics- Factors influencing selection of pump manufacturer

The high price sensitivity in the market implies that in situations where there are two manufacturers that quote for the same project, end-users select the pump manufacturer that offers the lower price.

The food and beverage industry has stringent regulations pertaining to the safety of food products established by the FDA and EHEDG, placing a high emphasis on the quality and reliability of the installed pumps.

Cleanability and ease of maintenance are key factors in the food and beverage industry. The ability to access the stator and the rotor without the need to dismantle a pump is a major requirement of the end-users.

There is increasing pressure applied by end-users for shorter delivery times, and this increases the emphasis on pump manufacturers to streamline their supply chain by establishing relationships with sub-suppliers to ensure faster delivery times.

An efficient sales and service support organization is critical in the food and beverage industry, especially because new innovations in pump technology are not expected due to the conservative nature of this industry.

End-users purchase pumps from pump manufacturers that are reputed for manufacturing the type of pump that they require. Consequently, specialization in manufacturing a specific pump type is a key factor.

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Conclusion

Source: Frost & Sullivan analysis.

The sovereign debt crisis of Europe have created an atmosphere of uncertainty

and low confidence among end users in Europe in 2012. However, due to the

food and beverage industry being a driving factor for countries in Southern

Europe, the pumps market is expected to recover from 2014-15.

Growth Factors

Product

Trends

Sovereign

Debt Crisis

and

Implications

Regulatory

Standards

Peristaltic pumps are hygienic and easy to maintain. Consequently, these

pumps are expected to witness the highest growth, especially in applications

involving the transfer of fruit and vegetable by-products.

Regulatory standards defined by the Food and Drug Administration (FDA), and

the European Hygienic Engineering and Design Group (EHEDG) are critical,

and manufacturers are unlikely to introduce new models without obtaining the

industry’s approval.

Expansion of end-user production facilities of food in Eastern Europe.

Increased demand for convenience food.

Increasing focus on energy optimization in end-user production facilities.

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For Additional Information

Anna Zanchi

Marketing & Communications Executive

Industrial Automation & Process Control -

Europe

+39.02.4651 4819

[email protected]

Niranjan Paul

Research Analyst

Industrial Automation & Process Control

(+91) 44-6681 4166

[email protected]

Sivakumar Narayanswamy

Program Manager

Industrial Automation & Process Control -

Europe

+91 44 6681 4186

[email protected]

Muthukumar Viswanathan

Practice Director

Industrial Automation & Process Control -

Europe

+44 20 7915 7804

[email protected]