Peanut Butter Production in the US
Over the five years to 2022, revenue for the Peanut Butter Production industry has decreased at an annualized rate of 3.5% to $2.1 billion, including a 2.1% decrease in 2022 alone. The industry experienced gains in 2017 and 2021 as the disposable income of consumers rose and the popularity of peanut...
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| Format: | Market Research |
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| Language: | eng |
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| Summary: | Over the five years to 2022, revenue for the Peanut Butter Production industry has decreased at an annualized rate of 3.5% to $2.1 billion, including a 2.1% decrease in 2022 alone. The industry experienced gains in 2017 and 2021 as the disposable income of consumers rose and the popularity of peanut butter increased as higher quality products from small producers attracted high-income consumers. Conversely, the industry has contended with decreasing peanut prices, forcing operators to lower the price of peanut butter to remain competitive, dampening profit. Despite some of the industry's challenges, peanut butter remains a consumer staple and does not experience wild fluctuations in demand, even during periods of economic downturn. Nonetheless, in 2020, amid the outbreak of COVID-19 (coronavirus), the industry declined 2.5% as widespread lockdowns forced consumers to eat at home regularly as restaurants temporarily closed across the country.
The industry is significantly concentrated, with the top three companies accounting for an estimated 80.9% of industry revenue in 2022. National food companies such as The JM Smucker Company, which produces the market-leading Jif brand, and Post Holdings Inc. (Post Holdings) have further entrenched their positions within the industry through aggressive marketing, new product introductions and the successful acquisition of Conagra's Peter Pan brand. In addition, Post Holdings acquired two other large peanut producers, Golden Boy Foods and American Blanching company, in 2014. Furthermore, despite strong brand loyalty to popular brand names, the average industry profit margin has remained relatively low during the current period.
The industry is projected to experience modest gains over the five years to 2027 as it maintains its position as a household staple. However, due to fluctuating peanut prices, industry revenue will likely continue to experience challenges from price pressure. In addition, major producers are forecast to continue to seek opportunities abroad, especially in Asia, to increase profit as the domestic market reaches maturity. Domestically, operators will likely continue to market their respective brands while introducing new products to compete more effectively with manufacturers of other snack products. Overall, industry revenue is forecast to increase at an annualized rate of 0.6% to $2.2 billion over the next five years. |
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