Vertical Outlook: Food & Beverage

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Food & Beverage

2005 YTD pages: 7,696.8*

2004 YTD pages: 8,096.2*

% change: -4.93%*

* Figures combine data from IMS' Restaurant & Food Service and Brewing, Distilling, Bottling categories.

Bright spots: As consumers demand more nutritious foods with fewer additives, companies will be developing and advertising more healthy and natural products.

Challenges: Consolidation among food companies is likely to continue.

In the restaurant and food service category, ROP pages have been in decline for several years. Last year was no exception, with pages declining nearly 5% overall through October.

Consolidation among food service companies has been the No. 1 cause of the decline. "When you have 10 or 15 companies combined down to one, there's no way the spending is going to stay at the same level," said Mike Cardello, VP-sales for Lebhar-Friedman's Nation's Restaurant News. "We recognized this trend a long time ago, so we've been going after a greater share of the marketing dollar through events, sponsorships and the Internet."

Cardello predicted a slight dip in ad pages this year due to continuing industry consolidation.

Last year was a challenging one for media in the retail sector as many large food companies responded to consumer concerns about the nutritional quality of packaged foods, according to Dan Bagan, VP-group publisher of Fairchild Publications' B2B Retail Group, which includes Supermarket News. He applauded the industry for responding quickly to concerns over trans fats and the high sugar content of foods marketed to children, even though the expense of changing food formulations and packaging was not cheap-and affected marketing spending.

Although he's not expecting 2006 to be easier, Bagan is optimistic about the market because of the shifts the food companies made in 2005. "I think it will be a decent year," he said.

While the Internet has been an important component of integrated marketing programs, "it's not like you're out of the game if you don't have a state-of-the-art Web site," said Bagan, adding that he expects advertisers will begin demanding more online opportunities in 2006. Supermarket News will be ramping up its Internet efforts, he said. -M.G.

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