August 13, 2024 Food Sector Sees Record High E-commerce Sales, New Data

Data finds sustained e-commerce growth post-pandemic, as SME producers capitalize on DTC opportunities and see doors open to online retail.

Companies in the US food manufacturing industry have seen a record value of e-commerce sales. Online sales surged to $652 billion, according to the latest annual data, an increase of 9% compared to the previous year.

This is part of a sustained transition with the industry increasingly capitalizing on e-commerce sales. The value of e-shipments have increased by 18% compared to pre-pandemic.

The findings bring into focus an industry with small to medium producers increasingly capitalizing on market connectivity nationwide. E-commerce sales now account for 72% of total sales value in the industry.

The research, collated by State and Local Tax specialists at Source Advisors, analyzes up to 5 years of manufacturing industry e-commerce sales in the USA using the latest available data** to highlight the sectors which are capitalizing on ecommerce to fuel growth.

Analyzing state level growth in food manufacturing, Illinois saw the greatest real term increase in revenue from all activity — a $6.9 billion surge. This was an increase of 13% compared to the previous year. Next highest was Iowa with a $6.7 billion increase in revenue, 15% higher than the previous year, followed by Texas with a $5.7 billion increase, which represented a 10% year on year increase.

Chris Vignone, Managing Director at Source Advisors, says:
“The benefits in expanding e-commerce operations is clear, and revenue taken from online operations is only likely to increase further. Companies that are expanding their market presence across the USA must be acutely aware of how each sale affects their tax liabilities.”

“Selling products in multiple states means navigating a complex web of local tax regulations, where each state’s rules determine tax obligations. This can lead to significant tax burdens if not managed properly. Companies must invest in robust tax management systems to avoid unnecessary overspending on taxes.”

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