AmerCareRoyal - Market Update Q4 2023

AmerCareRoyal offers disposable products used in the food service, janitorial, sanitation, industrial, hospitality and medical industries.

Quarterly Market Update

Quarter 4 | Fall 2023

Restaurant Supply Product Pathway

Q4 2023 Market Update

SUMMARY: Supply flow to North America is unconstrained, essentially back to pre-pandemic normal

















Indications point to possible mild increases early in 2024 on gloves (suppliers regaining profitability), paper (sanctions on Russian timber), and plastics (increased resin / fossil fuel hikes). Notwithstanding sudden COVID resurgence, overseas labor and factory production are strong.

“Blank sailings” - canceled voyages or skipped port calls to avoid low- revenue voyages – on the rise in Q3 ’23, causing some minor scheduling challenges for overseas importers. Otherwise, ocean shipping to North America and US & Canadian port functions are stable.

USDA port holds on gloves are up in response to quality and dumping issues.

Diesel prices are up in late Q3 2023.

Warehouse capacity across North America is back to pre-pandemic norms.

Truck Driver shortage has improved 23% 2023 but is still acute.


Foodservice Industry Perspective

Q4 2023 Market Update

SUMMARY: North American restaurants have regained pre-pandemic operational levels and viability

September marked the 33rd consecutive month of employment growth in the restaurant industry, according to the National Restaurant Association. The category now has 12.37 million jobs, versus 12.34 million in February 2020, before the domestic onset of Covid. Overall, the leisure and hospitality segment added about 96,000 jobs in September, above the average monthly gain of 61,000 throughout the previous 12 months. (Nations Restaurant News)

Restaurant growth is forecasted to be 1.4% in 2024, an increase from the -1.1% downturn in total industry performance seen so far in 2023 Segment-specific growth rates break down as follows: .

➢ Limited- Service Restaurants ….. 1.9%, increasing from -.3% in 2023 ➢ Full- Service Restaurants …. .5%, increasing from -2.4% ➢ Supermarket Foodservice …. 3% increasing from 2%

Travel and Leisure leads all foodservice sector-level growth projections for 2024 at 6.1%, driven by continued strength in Transportation foodservice (airports) up 3.5% after growing 12% this year and 60% in 2022.

Top restaurant chain growth is expected to be 2.7% in the Limited-Service class, 101 to 500 locations size. (Technomic)

Twenty percent more Canadians order takeout restaurant meals than order meals to be delivered. Reasons most given are to get their food faster (42%) and to avoid delivery fees (40%) (DoorDash)

Consumer Price Index estimates for Food Away from Home is forecast to decline by nearly half in what it has been in 2023, from a rate of 6.5% to 3.5% in 2024. (Technomic, US Census Bureau)

590 foodservice operators Technomic 2023 Corporate Social Responsibility & Sustainability Multi Client Study


Legislative and Societal Outlook

Q4 2023 Market Update

SUMMARY: States, provinces and corporations sustain anti-added PFAS initiatives; Suppliers a key resource

PFAS legislation at the state level in the US, banning foodservice packaging that contains intentionally added PFAS, will expand in 2024. Joining California, New York State and Washington state with bans going into effect next year are Vermont, Connecticut, Colorado, Maryland, Minnesota, Rhode Island. (Pillsbury, LLP) Major restaurant chains continue the industry’s momentum toward non -added PFAS packaging options, with announcement by Restaurant Brands International, which owns Burger King, Tim Hortons, and Popeyes of intention to phase out PFAS in its food packaging worldwide by 2025. ( .

By contrast, the US Food and Drug Administration has not proposed any new regulations or interpretations of existing regulations regarding PFAS and food containers since ending public comment on its review of fluorinated polyethylene containers used in food contact applications, resulting in a situation of patchwork legislation and as- yet-unclear national consensus about PFAS in foodservice packaging. For now, US states are taking the lead in establishing PFAS regulatory regimes. Their reach, however, may be restricted by possible preemption and federal action. (Holland and Knight) Canada’s province of British Columbia announced restrictions on the use of single-use plastics taking effect in December 2023 and aligned with the country’s federal ban but with further specificity around products marketed as bio or compostable plastic. (McMillan, LLP)


Key Takeaways for Q4 2023

Q4 2023 Market Update

Restaurant industry operations have continued to stabilize and return to pre-pandemic norms. Labor challenges are fading, and steady growth rates have taken hold offering promise of sustained viability for chains and independent businesses.

Canadian and US economies continue to wrestle inflation down to targeted levels and once-feared hard landing recession scenarios seem less likely or of lesser predicted severity.

Supply chain performance stability is being maintained with product flow unconstrained by material availability, production, and logistics interruptions. Attention and preparation should be given ahead of anticipated mild cost increases on gloves and possibly paper and plastic products, potentially to arise in early 2024. Molded fiber NPFA products sold by AmerCareRoyal carry Biodegradable Products Institute (BPI) certification for composability, as well as certifying they are free from intentionally added PFAS chemicals. ACR continues to invest in coating and base material innovation in NPFAproducts in 2024.

The people of AmerCareRoyal continue to focus everything we do on keeping our customers supplied, “in -the- know”, and enabled for success!

Count on ACR to help your business win each day!


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