Strategic advice | August 2024 Leveraging the industry lifecycle for business success

Any given industry will typically embody four stages during its lifetime: introduction, growth, maturity, and decline.^{Disclosure 3} It’s almost a mirror image of the business lifecycle, which includes early, growth, established, and transition stages.

Industry trends could be driven by factors such as new technology, additional laws or regulations, or societal or macroeconomic changes. Some might signal a short-lived peak or valley, while others could indicate a long-term shift toward a new stage of the industry lifecycle. For example, the Food Safety Modernization Act will have long-ranging implications for the food and ag industry when it goes into effect in January 2026. Companies will need to build and maintain the infrastructure needed for increased traceability in the food supply chain.

Identifying industry trends early can help you seize new opportunities or avoid emerging threats. That could involve restructuring internal operations to better manage cash flow during a slowdown, innovating new products to meet consumer demands, or pursuing a merger or acquisition to add capabilities.

“Working with an industry specialist can give you an even sharper advantage,” says Taylor. “Our collaborative team approach pairs local bankers with industry specialists who can identify and analyze trends, work with you to evaluate risks, and provide strategic advice to help you achieve your vision.”

Here are three examples of how Truist’s in-depth industry insights could provide guidance for businesses.

Tracking consumer buying patterns in the beverage industry: In a recent market update, Truist’s beverage industry specialty team identified two emerging trends that could trigger innovation for beverage companies. First, the ready-to-drink (RTD) category—especially spirits-based cocktails—has been growing in volume for eight straight years. They’ve become a popular alternative for all drinking occasions. Second, the concept of premiumization is driving alcohol sales, especially among spirits like tequila and whiskey. The trend reflects consumers’ increasing demand for quality and authenticity. Developing new product ideas to capitalize on these trends could signal growth opportunities in the industry.

Using automation to address labor and supply chain issues in the food and agribusiness industry: Truist’s food and agribusiness industry specialty team recently reported on the trend of using automation to address lasting effects from the pandemic, including labor shortages and supply chain disruptions. More food companies are using advanced manufacturing techniques to reduce the need for manual labor. Automation and robotics can also help improve storage, refrigeration, and shipping efficiency. Businesses can use trends like these to guide their decisions on the ROI of retrofitting or replacing equipment.

Analyzing shoring trends in the transportation and logistics industry: For many years, offshoring manufacturing operations was a common strategy for businesses looking to reduce production costs. But as Truist’s transportation and logistics industry specialty team recently discussed, companies are now shifting away from overseas operations and moving toward reshoring and nearshoring them. The movement among companies to bring operations closer to home—often to avoid geopolitical turmoil—presents opportunities for transportation and logistics companies. Armed with information about manufacturing hubs being built in North America, particularly the Southeast United States, companies can be poised to step in and meet new demand.

“These types of data and insights can help businesses see potential opportunities and pitfalls,” says Taylor. “Our Truist industry specialists assist their clients by providing them the information that helps them to decide their next move.”

Making changes to your business to align with an industry trend can be a big investment. It’s important to be confident you’ll get the return you expect. That could mean first thoroughly analyzing the trend with an industry specialist to measure its potential staying power.

“For example, sudden changes brought on by economic or political shifts are likely short-lived,” says Taylor. “Knowing that, you can stick with your business plan rather than making investments that could cost you later.”

The risks of acting on trends that don’t pan out include wasted resources and even damage to your brand.

“It all comes back to the industry lifecycle,” says Taylor, “and the importance of identifying trends that could lead to decline and those that could spark a growth stage—and new opportunities for your company.”