Baking&Snack - February 2012 - 34

Capital Spending Survey
b by Dan Malovany

New products return as the main impetus for capital investment in 2012.

W

After years of heightened spending on streamlining operations and slashing overhead in response to a faltering economy, new products returned as the dominant driving force for investing in 2011 and should continue to do so in 2012 as bakers and snack producers remain much more customer focused, according to Baking & Snack’s 19th Annual Capital Spending Survey. Looking at 2012, 41% of respondents selected new products as most important reason for capital spending, followed by economic pressures (22%), increasing capacity/efficiencies (19%), commodity costs (10%) and food security (8%). Those percentages were statistically similar to last year’s survey. By contrast, only 31% in the 2010 survey listed new products as the primary force behind capital expen-

ditures, followed closely by responding to economic pressures (29%), offsetting high commodity prices (22%) and then a host of other reasons. During the recession, new product activity tumbled by as much as one-third in many food categories as skittish companies retrenched until the economy showed some signs of leveling off. Just because new products have become the primary push behind capital spending doesn’t mean food companies have stopped searching for further ways to improve productivity, according to Marjorie Troxel Hellmer, president, Cypress Research Associates, Kansas City, MO, which conducted the survey in November and December. Rather, the justification for capital expenditures has become more balanced between businesses seeking out new

What single factor will drive capital spending in 2012?
8% 10% 41% 19%
New products

Economic pressures Greater capacity, efficiencies High commodity costs

22%

Food security

opportunities to bolster their sales base and companies identifying operational efficiencies to protect their bottom lines. “The commodity pressure is there and so are economic pressures, but they are not as much of a driver as in the past,” she said. “That’s because some of the trepidation is falling away. Companies are getting back to business and keeping an eye on their budgets.” According to the survey, the new normal involves identifying new avenues for growth but doing it as prudently as possible. In fact, improving product quality/ consistency as well as food safety/ sanitation rated 6.1 out of 7.0, or “very important,” in how executives will determine their capital spending in 2012. Improving process capability/flexibility — such as increasing yield or decreasing changeover time — received a 6.0 rating, followed by decreasing labor costs with a 5.9 ranking of importance. Reducing labor costs is no longer the proverbial lowest of the lowhanging fruit, possibly because bakers and snack producers have addressed this issue consistently over the years, according to Ms. Troxel Hellmer. Moreover, as companies search for ways to grow their businesses, they reallocate skilled labor to new lines or into new positions within their operations instead of just focusing on reducing headcount, according to a panel of industry veterans interviewed by Cypress Research Associates.

34

/ Baking & Snack / February 2012

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Baking&Snack - February 2012

Table of Contents for the Digital Edition of Baking&Snack - February 2012

Baking&Snack - February 2012
Table of Contents
Table of Contents
Editorial - Fresh start to 2012
Newsfront - Canada Bread sets ambitious goals in 2012
Newsfront - Hostess Brands files for bankruptcy again
In Brief
News - ASB selects four to 2012 Hall of Fame
News - Kraft to reduce workforce as part of realignment
News - GMA director to lead new food safety alliance
In Brief
News - Whole Grains Summit aims at whole world
News - FTRAC convenes with ARS in Boston
In Brief
Correction and Clarification
People
In Memoriam
Right on Track
Back on Track
Industry Insight - Managing Valued Assets
Going Lean, Cutting Waste
Breakfast Trends - Keeping Breakfast in Balance
Botanicals - Extracts with Benefits
Probiotics - Working with Probiotics
Ingredient App - Vanilla Upgraded
Regulatory Q&A - Better Safe than Sorry
Oven Technology - Ability with Agility
Pan Management - Automating Pan Handling
In Recovery Mode
From Pan to Hearth
Food Safety Q&A
ABA FTRAC Q&A
Course Preview - Getting Ahead of the Learning Curve
Events
Innovations
Ingredient News
Products & Packaging
Patents
New on the Shelf
Marketplace
Ad Index
New Product Spotlight - Superfruits to the Rescue
Baking&Snack - February 2012 - Baking&Snack - February 2012
Baking&Snack - February 2012 - 2
Baking&Snack - February 2012 - 3
Baking&Snack - February 2012 - 4
Baking&Snack - February 2012 - 5
Baking&Snack - February 2012 - 6
Baking&Snack - February 2012 - 7
Baking&Snack - February 2012 - 8
Baking&Snack - February 2012 - Table of Contents
Baking&Snack - February 2012 - 10
Baking&Snack - February 2012 - Table of Contents
Baking&Snack - February 2012 - Editorial - Fresh start to 2012
Baking&Snack - February 2012 - 13
Baking&Snack - February 2012 - 14
Baking&Snack - February 2012 - 15
Baking&Snack - February 2012 - Newsfront - Canada Bread sets ambitious goals in 2012
Baking&Snack - February 2012 - In Brief
Baking&Snack - February 2012 - News - ASB selects four to 2012 Hall of Fame
Baking&Snack - February 2012 - 19
Baking&Snack - February 2012 - In Brief
Baking&Snack - February 2012 - 21
Baking&Snack - February 2012 - Correction and Clarification
Baking&Snack - February 2012 - In Memoriam
Baking&Snack - February 2012 - Right on Track
Baking&Snack - February 2012 - 25
Baking&Snack - February 2012 - 26
Baking&Snack - February 2012 - 27
Baking&Snack - February 2012 - 28
Baking&Snack - February 2012 - 29
Baking&Snack - February 2012 - 30
Baking&Snack - February 2012 - 31
Baking&Snack - February 2012 - 32
Baking&Snack - February 2012 - 33
Baking&Snack - February 2012 - Back on Track
Baking&Snack - February 2012 - 35
Baking&Snack - February 2012 - 36
Baking&Snack - February 2012 - 37
Baking&Snack - February 2012 - 38
Baking&Snack - February 2012 - 39
Baking&Snack - February 2012 - 40
Baking&Snack - February 2012 - 41
Baking&Snack - February 2012 - 42
Baking&Snack - February 2012 - Industry Insight - Managing Valued Assets
Baking&Snack - February 2012 - Going Lean, Cutting Waste
Baking&Snack - February 2012 - 45
Baking&Snack - February 2012 - 46
Baking&Snack - February 2012 - 47
Baking&Snack - February 2012 - 48
Baking&Snack - February 2012 - 49
Baking&Snack - February 2012 - 50
Baking&Snack - February 2012 - 51
Baking&Snack - February 2012 - 52
Baking&Snack - February 2012 - 53
Baking&Snack - February 2012 - 54
Baking&Snack - February 2012 - Breakfast Trends - Keeping Breakfast in Balance
Baking&Snack - February 2012 - 56
Baking&Snack - February 2012 - 57
Baking&Snack - February 2012 - 58
Baking&Snack - February 2012 - 59
Baking&Snack - February 2012 - 60
Baking&Snack - February 2012 - 61
Baking&Snack - February 2012 - 62
Baking&Snack - February 2012 - 63
Baking&Snack - February 2012 - 64
Baking&Snack - February 2012 - Botanicals - Extracts with Benefits
Baking&Snack - February 2012 - 66
Baking&Snack - February 2012 - 67
Baking&Snack - February 2012 - 68
Baking&Snack - February 2012 - 69
Baking&Snack - February 2012 - 70
Baking&Snack - February 2012 - Probiotics - Working with Probiotics
Baking&Snack - February 2012 - 72
Baking&Snack - February 2012 - 73
Baking&Snack - February 2012 - 74
Baking&Snack - February 2012 - 75
Baking&Snack - February 2012 - 76
Baking&Snack - February 2012 - 77
Baking&Snack - February 2012 - 78
Baking&Snack - February 2012 - 79
Baking&Snack - February 2012 - Ingredient App - Vanilla Upgraded
Baking&Snack - February 2012 - 81
Baking&Snack - February 2012 - 82
Baking&Snack - February 2012 - Regulatory Q&A - Better Safe than Sorry
Baking&Snack - February 2012 - 84
Baking&Snack - February 2012 - 85
Baking&Snack - February 2012 - 86
Baking&Snack - February 2012 - Oven Technology - Ability with Agility
Baking&Snack - February 2012 - 88
Baking&Snack - February 2012 - 89
Baking&Snack - February 2012 - 90
Baking&Snack - February 2012 - 91
Baking&Snack - February 2012 - 92
Baking&Snack - February 2012 - 93
Baking&Snack - February 2012 - 94
Baking&Snack - February 2012 - 95
Baking&Snack - February 2012 - 96
Baking&Snack - February 2012 - Pan Management - Automating Pan Handling
Baking&Snack - February 2012 - 98
Baking&Snack - February 2012 - 99
Baking&Snack - February 2012 - 100
Baking&Snack - February 2012 - 101
Baking&Snack - February 2012 - 102
Baking&Snack - February 2012 - 103
Baking&Snack - February 2012 - In Recovery Mode
Baking&Snack - February 2012 - 105
Baking&Snack - February 2012 - 106
Baking&Snack - February 2012 - 107
Baking&Snack - February 2012 - 108
Baking&Snack - February 2012 - 109
Baking&Snack - February 2012 - From Pan to Hearth
Baking&Snack - February 2012 - 111
Baking&Snack - February 2012 - 112
Baking&Snack - February 2012 - Food Safety Q&A
Baking&Snack - February 2012 - 114
Baking&Snack - February 2012 - 115
Baking&Snack - February 2012 - 116
Baking&Snack - February 2012 - ABA FTRAC Q&A
Baking&Snack - February 2012 - 118
Baking&Snack - February 2012 - 119
Baking&Snack - February 2012 - 120
Baking&Snack - February 2012 - Course Preview - Getting Ahead of the Learning Curve
Baking&Snack - February 2012 - 122
Baking&Snack - February 2012 - Events
Baking&Snack - February 2012 - Innovations
Baking&Snack - February 2012 - Ingredient News
Baking&Snack - February 2012 - 126
Baking&Snack - February 2012 - Products & Packaging
Baking&Snack - February 2012 - 128
Baking&Snack - February 2012 - 129
Baking&Snack - February 2012 - 130
Baking&Snack - February 2012 - 131
Baking&Snack - February 2012 - Patents
Baking&Snack - February 2012 - 133
Baking&Snack - February 2012 - 134
Baking&Snack - February 2012 - New on the Shelf
Baking&Snack - February 2012 - 136
Baking&Snack - February 2012 - 137
Baking&Snack - February 2012 - 138
Baking&Snack - February 2012 - Marketplace
Baking&Snack - February 2012 - 140
Baking&Snack - February 2012 - 141
Baking&Snack - February 2012 - 142
Baking&Snack - February 2012 - 143
Baking&Snack - February 2012 - 144
Baking&Snack - February 2012 - Ad Index
Baking&Snack - February 2012 - New Product Spotlight - Superfruits to the Rescue
Baking&Snack - February 2012 - 147
Baking&Snack - February 2012 - 148
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