22 Sep Recap C-Suite Roundtable – Expectations Leading Into 2021
On Tuesday, Sept. 22, BEMA brought together C-suite members to talk about expectations for 2021. Led by moderators Jason Ward of AMF and Mike Pierce of The Austin Company, the roundtable allowed participants to share ideas and voice concerns for the future around a virtual table.
Coined by many as a “year of uncertainty,” 2020 continues to offer up its share of surprises. From the lingering effects of the pandemic to the upcoming Presidential election, the immediacy of 2021 has many guessing what the next 12-18 months could hold for those in the industry.
“We know 2021 will have an element of COVID, so hopefully that’s one less major uncertainty to manage through, said Craig Souser, JLS Automation. “When we can remove uncertainty, business gets easier, but we still must be ready to think on our feet.”
Cautious, but Positive
For many, the approach for 2021 remains conservative to better manage the unknowns with many predicting growth targets similar to 2020, thanks to a backlog of work and shifts in resource allocation. While many conveyed cautious positivity, there’s concern regarding the lack of centralized and reliable information and questions around how to manage the backlog of pushed projects expected to continue into 2021, particularly as many lack the personnel to move forward at full steam.
Considering the economy was relatively robust prior to the pandemic, many expect positive momentum for 2021 regardless of the direction of the election. But the outcome holds an element of uncertainty as election years tend to generate a slow-down in capital spending. This coupled with a growing disconnect between Wall St. and Main St. and stock market volatility could impact interest rates, making money harder to obtain.
From a publishing perspective, Josh Sosland and Paul Lattan of Sosland Publishing shared that they are seeing demand for webinars at an all-time high. Lattan commented that “maybe we’ve seen the worst” and forecasted companies will continue to see the advantage of getting in front of their customers in 2021.
Capital spending among many bakers, particularly among those in retail, also remains strong, according to roundtable special guest, Robb MacKie of the American Bakers Association. Reporting from across the industry, he shared retail bakers are on track for a banner year, foodservice bakers are struggling, and instore remains hit and miss. Sticking with their capital expenditure plans, many look forward to future growth but estimate recovery could be anywhere from 18 months to three years. MacKie also shared how election outcomes could produce a stimulus or COVID-relief package at the beginning of the year in an attempt to keep the economy liquid.
“We will still have to take precautions, but I think there’s a pent-up demand to reconnect,” MacKie said. “The caveat being how strong of an economic recovery we will have. People need to feel comfortable, and we need to be able to sustain growth, offer significant tax reductions and regulatory relief, and open up trade.”
MacKie also cautioned future growth could be blunted by the maxed out capacity of bakers who are having trouble getting enough help. Supplemental funds ($600) provided through the CARES Act have kept many employees sidelined, coupled with a general reluctance and lack of confidence among employees to return. Other considerations include the availability of a vaccine and interest among the general public in receiving it.
Barometer of Recovery
Many in the C-suite are also looking to Europe to gauge the speed of economic recovery. Some are seeing positive signs in Germany but there remains ambiguity as the United Kingdom again faces lock down along with a general hesitancy throughout Europe. American companies are also encountering stiff competition from European companies that are looking to make gains in the U.S., offering machinery prices that are up to 30% lower.
In addition to its virtual roundtable series, BEMA has launched a quarterly pulse member survey as part of its new Industry Intel initiative. Conducted by Cypress Research, the confidential survey will track the health of the baking equipment manufacturing industry, including global and U.S. outlook, company outlook by product channel and booking/sales top business challenges.
The Q2 survey (April to late June) found 76% of those surveyed are optimistic about the U.S. outlook. 92% of channels being very positive with high equipment sales while bookings in 2020 remain fairly flat. On a less positive note, 100,000 restaurants closed in the last six months and 40% could shut down in the next couple of months with those still open facing additional challenges going into the winter.
“Even considering the heart of the crisis, we’ve had nine months of regular business in a year,” said Mike Pierce of the Austin Company. “People are still looking at a positive 2021. Foodservice has gone on hold a bit, but others are moving forward.” Rod Gregg of Hinds Bock echoed the sentiment saying, “Most of us have come out of Q3 more positive and expect higher numbers moving forward.”