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Automation and Software Solutions in World Food and Beverage MarketPublished by: Frost & Sullivan Published: Aug. 29, 2005 Table of Contents1. Executive Summary 1. Market Overview 1. Executive Overview 2. Introduction 2. Major Research Findings 1. Market Growth Opportunities and Growth Forecasts 2. Analysis by Product Type 3. Competitive Analysis 4. Conclusions 2. Total Automation and Software Solutions in World Food and Beverage Market 1. Market Overview 1. Introduction 2. Market Segmentation 3. Market Engineering Measurements 2. Market Analysis 1. Primary Challenges 2. Secondary Challenges 3. Market Drivers a. New Regulations in NA and Europe Drive Investment by F&B Companies in Automation Solutions to Meet the Compliance. b. Increased Manufacturing Visibility into Plant Processes Encourages Companies to Adopt Automation Solutions. c. Emphasis on Reduction of Manufacturing Costs and Downtime Drives Implementation d. Need to Conform to Global Standards and Maintain Uniform Quality Propells Growth. e. Falling Prices of Automation Products Boost Demand f. Technological Advances Spur Growth g. Replacement of Older Automation Products Steers Growth 4. Market Restraints a. Tight Profit Margins in the Food and Beverage Industry Hamper New Investments b. Price Competition Hinders Revenue Growth c. Conservative Attitude Among F&B Companies Toward Automation Restrains Implementation of Automation Solutions d. End-User Market Maturity Hampers Market Growth e. Lack of Substantial Data of ROI Constraints Growth f. Cost of Integration and Incompatibility With Long-Established Automation Systems Impede Growth g. Competition from Suppliers of ERP Systems With Limited MES Functionalities Erodes Market Potential. 5. Revenue Forecasts 3. Market Trends 1. Trends by Product Type 2. Trends by Geographic Regions 3. Technology Trends 4. Pricing Trends 4. Competitive Analysis 1. Competitive Structure 2. Competitive Market Ranking 5. Frost & Sullivan Awards 1. Frost & Sullivan Market Leadership Award 2. Frost & Sullivan Technology Leadership Award 3. Frost & Sullivan Technology Innovation Award 4. Frost & Sullivan Vertical Market Leadership Award 3. Strategic Analysis of Total PLC Solutions in World Food and Beverage Market 1. Introduction 1. Market Overview 2. Market Engineering Measurements 2. Market Analysis 1. Market Drivers a. Quality and Cost Effectiveness Drive Growth b. Suitability for Batch Processing Industries Drives Growth in the Food and Beverage Industry c. Replacement of Installed PLC Products Steers the Growth in the Food and Beverage Industry 2. Market Restraints a. End-user Market Maturity Hampers Market Growth b. Tight Profit Margins in the Food and Beverage Industry Reduces Investments 3. Revenue Forecasts 4. Geographic Analysis 5. Competitive Structure 6. Competitive Market Share 4. Strategic Analysis of Total DCS Solutions in World Food and Beverage Market 1. Introduction 1. Market Overview 2. Market Engineering Measurements 2. Market Analysis 1. Market Drivers a. Reliability and Ease of Use of DCS Drive Growth b. New Regulations Drive Growth of DCS c. Increased Security Concern Stokes Demand for DCS 2. Market Restraints a. Price Competition Hinders Revenue Growth b. Tight Profit Margins in the Food and Beverage Industry Reduce Investments c. Technologies More Suitable for Batch Processing Industry Restrain Growth 3. Revenue Forecasts 4. Geographic Analysis 5. Competitive Structure 6. Competitive Market Share 5. Strategic Analysis of Total SCADA/HMI Solutions in World Food and Beverage Market 1. Introduction 1. Market Overview 2. Market Engineering Measurements 2. Market Analysis 1. Market Drivers a. Need to Meet Regulatory Compliance Compels Implementation b. Technological Developments Drive Revenue Growth c. Need for Real-Time Performance Management on a Global Scale Drives Revenues d. Increased Security Concern Stokes Demand e. Falling Prices Boost Demand 2. Market Restraints a. Downward Price Pressure Decreases Revenue Growth b. Tight Profit Margins in the Food and Beverage Industry Reduces Greenfield Projects c. Conservative Attitude Among Food and Beverage Companies Toward New Technologies Restrain Growth 3. Revenue Forecasts 4. Geographic Analysis 5. Competitive Structure 6. Competitive Market Share 6. Strategic Analysis of Total MES Solutions in World Food and Beverage Market 1. Introduction 1. Market Overview 2. Market Engineering Measurements 2. Market Analysis 1. Market Drivers a. New Regulations in North America and Europe Drive Investment By Food and Beverage Companies in MES Solutions to Meet the Compliance b. Increased Manufacturing Visibility into Plant Processes Encourages Companies to Adopt MES Solutions c. Need for Total Integration of the Plant Processes Stimulates MES Installations. d. Tight Profit Margins n Food and Beverage Industries Compel Companies to Invest in Automation Solutions to Increase Productivity and Efficiency. e. Falling Prices of Automation Products Boosts Demand. 2. Market Restraints a. Cost of Integration and Incompatibility With Long-Established Automation Systems Impede Growth of MES Market. b. Competition from Suppliers of ERP Systems With Limited MES Functionalities Erodes Market Potential. c. Lack of Substantial Data of ROI of MES Systems Constraints Growth. d. Conservative Attitude Among Food and Beverage Companies Toward Automation Restrains Implementation of Automation Solutions 3. Revenue Forecasts 4. Geographic Analysis 5. Competitive Structure 6. Competitive Market Ranking 7. Strategic Analysis of Total IAM Solutions in World Food and Beverage Market 1. Introduction 1. Market Overview 2. Market Engineering Measurements 2. Market Analysis 1. Market Drivers a. Emphasis on Reduction of Manufacturing Costs and Downtime Drives Implementation b. Need to Meet Regulatory Compliance Compels Implementation. c. Need for Automation of Maintenance Activities and Integrating it With Business Level Systems Drives Growth d. Need to Confirm to Global Standards and Maintain Uniform Quality Drive Growth 2. Market Restraints a. Lack of Data on Return-On-Investment in the Food and Beverage Industries Restrains Growth b. Conservative Attitude Toward Automation Restrains Implementation c. Investments in Conventional Systems and Difficulty in Migration Restrains Growth 3. Revenue Forecasts 4. Geographic Analysis 5. Competitive Structure 6. Competitive Market Ranking 8. Strategic Analysis of Total Plate Heat Exchangers in World Food and Beverage Market 1. Introduction 1. Market Overview 2. Market Engineering Measurements 2. Market Analysis 1. Market Drivers a. Ease of Cleaning of Plate Heat Exchangers Enables Higher Adoption b. Better Heat Transfer Efficiency Over Shell and Tube Heat Exchangers Drives Growth c. Large Installed Base Drives Replacements and Services Revenues d. Better Economic Conditions Sustain Growth 2. Market Restraints a. Market Maturity Stagnates New Sales b. Technical Limitations Hamper Growth 3. Revenue Forecasts 4. Geographic Analysis 5. Competitive Structure 6. Competitive Market Share 9. Appendix 1. Decision Support Database Tables 1. Processed Food Production 2. Frozen Food Production 3. Poultry Meat Production 4. Cattle Meat Production 5. Sheep Meat Production 6. Consumer Expenditure on Food and Beverage 7. Coffee Production 8. Tea Production AbstractLow Margins in the Food and Beverage Industry Hinder Investments in Automation SolutionsFaced with an intensely competitive retail structure and narrow profit margins, food manufacturers are cutting back on their capital expenditure and looking at means to improve operational efficiency and productivity. While investment in automation solutions could help them improve efficiency and profitability in the long run, high initial investments, lack of sufficient return on investment (ROI), and a largely conservative attitude toward technology have made them passive towards implementing automation and software solutions. In overcoming this hurdle, automation and software vendors need to offer competitively priced products with a strong ROI model and thereby convince the food and beverage industry of the benefits of automation. This Frost & Sullivan research service provides a comprehensive analysis of the automation and software solutions in world food and beverage market, focusing on forecasts by seven product sectors across four geographic regions. In addition, it lists the drivers and restraints for this market and encapsulates key findings with subsequent conclusions. Compliance with New Regulations in North America and Europe Likely to Drive Demand The European Union’s (EU's) new 178/2002 EC legislation along with the 21CFR part11 regulation from the food and drug administration (FDA) and the Bio Terrorism act in the United States are likely to greatly enhance the need for automation in the food and beverage industries. These new regulations require food manufacturers to be able to track and trace their products and ensure production transparency through audit trail and access control functions. Since it is difficult to maintain such records on paper, companies would be compelled to maintain electronic records, necessitating the use of automation solutions. While this ensures a greater demand for these solutions, vendors need to incorporate tracking and tracing features in their products and ensure price accessibility and global functionality. Due to the varied processes involved, food and beverage companies place much importance on the vendors’ process knowledge and the compatibility of their automation solutions with legacy systems and other automation products. "In response to this, automation and software vendors are providing automation products with open architecture, thus making them compatible with different products," says the analyst of this research. "Smaller companies that lack sufficient process knowledge and products with open architecture are at a risk of loosing market presence." High Growth Potential for Manufacturing Execution System (MES) Solutions While the need for tracking and tracing functionalities is driving overall market growth, the manufacturing execution system (MES) solution is emerging as the most dynamic product segment and is expected to show a higher growth relative to other product segments. According to the manufacturing enterprise solutions association (MESA), MES solutions can reduce manufacturing-cycle time by an estimated 45 percent, manual data collection processes by 75 percent, and paperwork by 50 percent. Thus, with the new regulatory requirements and favorable consumer demand, there exists ample potential for MES solutions in the food and beverage sector.
In terms of geographic trends, the Asia Pacific and east European regions are emerging as global manufacturing hubs and promise maximum growth. "New regulations are likely to positively impact all product segments, particularly MES," says the analyst. "Demand for devices that offer broader functionality, are easier to program and operate, and can be easily integrated with communication networks are expected to boost future market growth."
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