Credit & Finance: Defining business events

The Business Events graph depicts data trends since 2000 as researched and reported by Blue Book Services. Business event data includes closures, bankruptcies, acquisitions, and new entries into the produce industry.

As reflected, 2018 closures were down compared to 2017, falling below its moving average. Reported bankruptcies remained relatively flat compared to 2017 and has generally shown a declining slope since 2011, when reported bankruptcies were reported at their highest.

New entrants, companies coming into the produce marketplace and/or being listed by Blue Book, have generally been below or in line with the moving average since 2009.

New entrants have been on a fairly steep decline since 2015; however, as previously stated, 2018 data is as of September 30 and not the end of the year. Acquisition activity has been less in 2018, with it too, reflecting a downward sloping trend line.

Understanding the various types of businesses that close, or that are entering the marketplace, may offer additional insight into certain industry subsectors and regions. For tracking purposes, the United States is broken into five regions (Northeast, Southeast, Midwest, Southwest, and West) along with Canada and a combined Mexico and international segment.

Blue Book reported closures and bankruptcy frequencies for each of the years reflected have been heaviest for produce industry shippers—data includes growers, shippers, exporters, and/or exporter classifications, and is not exclusive to one classification type.

Broker/distributors, wholesale, retail, and transportation closures or bankruptcies reported are of lesser magnitude and relatively consistent year to year. Not surprisingly, closures and bankruptcies by region are heaviest in areas where there is a greater density of industry businesses.

Table 2 reflects changes in subsectors relative to other produce operators. Shipper-operators represent nearly half of all entrants and acquisition activity since 2014. Broker/distributor activity has increased relative to other subsectors since 2014, while wholesale entrant acquisition activity has declined. Retail listings have steadily increased relative to other entrants, though largely due to regional independents becoming listed.

This is an excerpt from the most recent Produce Blueprints quarterly journal. Click here to read the full article.

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