Food industry is increasing its appetite for water and wastewater treatment

According to Frost and Sullivan, the food industry is currently the largest industrial investor in water and wastewater treatment equipment, accounting for 9% of the total market sales, and expected to reach double figures in the next few years. At present the average annual investment per plant is around €34,000, although significant upgrades and expansions are also made every 10-20 years.

There is a high level of customer loyalty within the industry, says Frost and Sullivan, which is reflected in a bias towards past and experienced suppliers. However, demand is now reaching saturation point, customers are becoming increasingly selective. “With the importance of replacement markets rising and interest in cost-beneficial upgrades and specialised services escalating, suppliers are likely to be put under greater scrutiny,” said Frost and Sullivan Research Analyst Saana Karki. “Pressures for improved excellence are thus rising,”

Factors that may otherwise be seen as add-on benefits, such as serviceability, are key criterion in this sector, says Frost and Sullivan. “Product quality, functionality, and reliability thus act as pre-requisites for successful supplies, rather than as a source of competitive advantage,” said Karki. Technological understanding and offers of guarantees are also being increasingly regarded as hallmarks of good suppliers.

However, factors such as delivery of services and competitive pricing are failing to meet average levels of satisfaction, suggesting that suppliers that deliver beyond basic expectations have a potential advantage, says Frost and Sullivan.

Regional dominance and market segmentation have worked for many equipment suppliers, according to the research. Culligan, which principally derives its strength from a regional focus, has the highest customer satisfaction ranking. Other top performers, including Pall, Krüger, Nijhuis, and Alfa Laval, also compete successfully in local or niche technology markets.

“Maturing demand and replacement markets bring about a preference to local and technological specialists,” said Karki. “In fact, with competition running high, customer satisfaction is most typically achieved through a more focused strategy. Competitiveness is particularly manageable on a regional level and local suppliers are successfully positioning themselves in this sector.”