Manageable challenges for U.S. and EMEA package food credit quality - Fitch

A BALANCE between challenges and areas of potential improvement will keep the 2015 credit outlook for the U.S. and EMEA packaged food industry stable, according to Fitch Ratings. Food companies will leverage product innovations that match current health trends and consumers’ time considerations to boost weak top line and volume growth.

The recently published Fitch’s inaugural “U.S. and EMEA Corporate Dashboard” presents an overview of these challenges and the associated impact on the credit quality of U.S. and EMEA packaged food companies.

Fitch expects projected higher GPD growth, lower unemployment, and gas prices to keep improvements in the U.S. operating environment modest. Fragile consumer confidence will, however, dampen the eurozone. The region will also remain weak due to high unemployment and geopolitical uncertainties in central and eastern Europe.

According to Fitch, higher leverage from debt-financed acquisitions or activist investors driving more shareholder friendly actions presents the greatest risk to U.S. food companies' credit profiles. In general, food companies expect modest input cost inflation in 2015, which can be offset with productivity initiatives.