Senior financial executives at global food and beverage companies expect to see an improved financial performance in 2011 but foresee difficulty in sustaining profit margins, a KPMG survey has shown.

Twenty per cent of food executives expect "significant increases" in financial performance this year and 58% are expecting "some increase". Only 11% expect a worse performance.

This optimistic view is a result of increasing consumer demand, the research firm suggested, with 30% of food groups responding that they have seen a "sustained increase" in demand since the economic slowdown, 44% expecting the increase in 2011, and 20% in 2012 or later.

However, 49% of executives surveyed by KPMG indicated that they will have difficulty sustaining profit margins in the face of rising costs.

"These senior financial executives are expressing cautious optimism, but we remain in a state of flux," said Willy Kruh, global chair of KPMG's consumer markets practice. "We're still experiencing an erosion of spending as people are simply spending less, so the focus on cost management going forward is still critical."