The food and beverage industries turned in a stellar sales performance in Q3, amid signs of firming confidence, according to data from inventory management software provider Unleashed.
The average small-to-medium beverage business in Australia generated $710,000 in sales in Q3, the highest figure since at least Q1 2018, and up from $439,000 the same time last year. The report grouped alcoholic and non-alcoholic drinks producers together and was not inflation-adjusted.
Meanwhile SMEs in the Australian food industry closed $747,000 in Q3 sales, its best result in two years and the second highest figure since at least 2018. The highest quarterly sales performance recorded in the study was $822,000 in Q3 2022. Last quarter’s result was $460,000.
Confidence appears to be building
Australian food and beverage firms use Unleashed to purchase stock, control inventory levels, plan production, and manage sales. The quarterly report extracts and analyses the raw performance data from its users, providing a useful peek under the hood of the industry.
Other report highlights
Buyers are busy. Beverage businesses sent more purchase orders to suppliers in Q3 than in any previous quarter going back to Q1 2018. The average number of orders in Q3 was 175, up from 117 in Q2. Food industry buyers matched the trend, issuing a record 504 POs on average, up from 354.
Lead times are low. The Australian food and beverage supply chain is in great health, with deliveries arriving at record speed. On average beverage businesses receive goods 10 days after ordering, and food businesses in 13 – twice as fast as this time last year.
Margins are stubbornly low. Despite the positive signs, average profit margins in the industry remain suppressed.
Speaking to Food & Drink Business, Unleashed said the overall picture showed a marked increase in business confidence amongst food and beverage decision makers.
Report author, Greg Roughan said the large uptick in buying activity was “particularly revealing”.
“PO numbers are a real leading indicator. The sales results show what’s happening now, while the big increase in buying shows food and beverage businesses prepping for the demand they see on the horizon.
“Even those slim profit margins contain a grain of positivity. Yes, firms are being squeezed by their suppliers, and yes, a trend towards buying local has likely added cost – but there’s also the fact that brands are starting to stockpile goods as they anticipate future sales.”
“So chances are those margins will firm up a little as goods already paid for turn into revenue in the coming months. That would keep a lot of accountants happy,” Roughan said.
The Unleashed Manufacturer’s Health Index report is free to download here.
