PHL food manufacturing poised for modest expansion in 2021 — USDA

THE PHILIPPINE food manufacturing sector is expected to post flat to higher growth this year in line with growth in consumption, the United States Department of Agriculture (USDA) said in a report.

The USDA said positive growth indicators for the food manufacturing sector include the 5.3% increase in household expenditure on food and non-alcoholic beverages in the fourth quarter.

It also noted that food manufacturers have started selling online directly to consumers, although volumes were limited.

“According to industry sources, the outlook for 2021 food manufacturing performance remains relatively stagnant at 0-3% growth, which while below the long-term 6% average would be an improvement over the previous two down years,” the USDA said.

The USDA added that the retail food sector is projected to grow 10% during the year as convenience stores, supermarkets, and hypermarkets made progress with online shopping following the coronavirus disease 2019 (COVID -19) pandemic.

“An increase in purchasing power boosted warehouse clubs and awareness of imported products and have at times faced shortages due to COVID-19 related supply and demand shocks,” the USDA said.

“Stay-at-home orders continue to keep many workers and children at home, which has fueled demand for pantry items, including baked goods and mixes, canned goods, cooking oils, milk, and snack foods as well as products, larger package sizes, and products with extended shelf-life, as well as allowed consumers to redirect their discretionary spending on purchasing premium products,” it added.

Meanwhile, the USDA said it sees no current prospect of recovery for the food service sector this year, after it posted a 34% decline in 2020 due to COVID -19 related measures.

“Food service providers that still remain in operation have generally shifted to online delivery platforms and curbside pickups,” the USDA said.

In a separate report, the USDA also projected that the market for plant-based food products will grow 3-5% in 2021.

“Traders are optimistic the market will grow 3-5% in 2021 as consumers become increasingly aware of health trends and responsible consumption,” the USDA said.

“Ease of sharing information on social media is fueling demand for plant-based food products. More than 100 vegan restaurants have shifted to a cloud-kitchen model to cope with COVID-19 community quarantine restrictions,” it added.