China Food and Drink Report Q3 2011
Report description
Stubborn inflationary pressures and expected weakness in the Chinese property market are preventing the country’s domestic demand sector from realising its full potential in 2011. While China’s near-term domestic demand prospects look bright, particularly when compared to the region’s emerging market economies, the continued intensity of inflation is already filtering through to lower consumer confidence, pointing towards a moderation of consumer spending growth over the coming quarters. Longer term, China remains the envy of many in terms of domestic demand potential and will continue to feature strongly on investors’ radars, thanks to the country’s favourable demographic profile and dynamic economic growth. Indeed, bearing out the attractiveness of the Chinese consumer story, big consumer goods players like Wahaha, Unilever and Yum Brands have all expressed their intentions of establishing a stronger foothold in the market.
Headline Industry Data ?? 2011 Food consumption = +17.2%; forecast to 2015 = +79.2% ?? 2011 Alcoholic drinks sales = +16.1%; forecast to 2015 = +64.2% ?? 2011 Soft drinks sales = +16.7%; forecast to 2015 = +61.1% ?? 2011 Mass grocery retail sales = +11.3%; forecast to 2015 = +51.6%
Key Company Trends Drinks Producers Stretching Their Footprint To The Retail Sector – With ambitions to become one of the world's top 500 companies within the next five years, Chinese soft drinks producer Wahaha plans to open 100 department stores in the country to contend with China's distribution challenges. By setting up its own retail stores, Wahaha is looking to gain better control over the distribution of its products and better entrench its products across the country. Similarly, looking to address the distribution challenges in the Chinese market, New Zealand dairy producer Natural Dairy Holdings is planning to launch a chain of around 3,000 stores across China.
China Featuring Strongly On Investors’ Radars – Anglo-Dutch conglomerate Unilever launched CNY300mn (US$45.8mn) worth of yuan-denominated bonds in Hong Kong as it prepares to beef up its presence in China. With China being a key emerging market for Unilever, the company clearly wants to entrench itself deeper in the Chinese market and is expected to plough in the proceeds from its bond issue to support its expansionary ambitions. Multinational fast food player Yum Brands is eyeing a stronger foothold in China as well. Yum Brands is to divest its Long John Silver and A&W All-American Food restaurants in the US and will deploy the freed-up capital towards its business expansion in China.
Key Risks To Outlook Sticky Inflationary Pressures – Stubborn consumer price inflation is a risk to our near-term consumer outlook. Fast-accelerating food inflation remains the primary driver of headline inflation and these sticky inflationary pressures could potentially discourage consumer spending in food and drink products. More worrisome, however, is the prospect of an extended monetary tightening cycle into H211. Should inflationary pressures remain elevated and consequently prompt the People’s Bank of China to engage in further monetary tightening in H211, discretionary spending will take a strong hit.
Table of contents
Chapter 1 - BMI Industry View
Chapter 2 - SWOT Analysis
Chile Food Industry SWOT
Chile Drink Industry SWOT
Chile Mass Grocery Retail Industry SWOT
Chapter 3 - Business Environment
BMI’s Core Global Industry Views
Table: BMI Food & Drink Core Views
Latin America Risk/Reward Ratings
Table: Latin America Food & Drink Business Environment Ratings, Q
Chile’s Risk/Reward Rating
Macroeconomic Outlook
Table: Chile Economic Activity
Chapter 4 - Industry Forecast Scenario
Consumer Outlook
Food
Total Food Consumption
Table: Chile Food Consumption Indicators Historical Data & Forecasts
Canned Food
Table: Canned Food Value/Volume Sales Historical Data & Forecasts
Confectionery
Table: Confectionery Value/Volume Sales – Historical Data & Forecasts
Drink
Hot Drinks
Table: Hot Drink Value Sales Historical Data & Forecasts
Soft Drinks
Table: Soft Drink Value/Volume Sales Historical Data & Forecasts
Alcoholic Drinks
Table: Alcoholic Drink Value/Volume Sales Historical Data & Forecasts
Trade
Table: Food & Drink Trade Balance Historical Data & Forecasts
Mass Grocery Retail
Table: Chile Mass Grocery Retail Value Sales by Format Historical Data & Forecasts
Chapter 5 - Food
Key Industry Trends And Developments
Fonterra And Nestlé's Plan For Chilean Merger Derailed By Opposition
Chile Positioned As Regional Hub
Salmon Industry Hit By Disease
Foreign Direct Investment
Focus On Healthy Food
Market Overview
Overview of Food Sector
Canned Food/Prepared Food
Confectionery
Dairy
Meat
Aquaculture
Chapter 6 - Drink
Key Industry Trends And Developments
Concha y Toro's Acquisition Of Fetzer Will Reduce Currency Risk And Improve Routes To Market
Concha y Toro Eyes Growing Domestic Beer Market
Market Overview
Soft Drinks
Alcoholic Drinks
Chapter 7 - Mass Grocery Retail
Key Industry Trends And Developments
Walmart Expansion Taking Advantage Of Rising Chilean Affluence
Cencosud Trading At A Discount To Latin American Peers
Falabella Accelerates Investment For Regional Growth Potential
Supermercados del Sur Considers IPO
International Expansion
Market Overview
Table: Structure of Chile’s Mass Grocery Retail Market by Estimated Number of Outlets
Table: Structure of Chile’s Mass Grocery Retail Market – Sales by Format (US$bn)
Table: Structure of Chile’s Mass Grocery Retail Market – Sales by Format (CHLbn)
Table: Average Annual Sales Value by Format –
Chapter 8 - Competitive Landscape
Consumer Shares Analysis
Key Players
Table: Key Players in Chile's Food Sector
Table: Key Players in Chile's Drink Sector
Table: Key Players in Chile's Mass Grocery Retail Sector
Chapter 9 - Company Profiles
Food
Empresas Carozzi
Nestlé Chile SA
Soprole
Drink
Concha y Toro
Embotelladora Andina
Compañia Cervecerias Unidas (CCU)
Mass Grocery Retail
Distribución y Servicio (Walmart)
Cencosud SA
Chapter 10 - BMI Food & Drink Methodology
Food & Drink Business Environment Ratings
Table: Rewards
Table: Risks
Weighting
Table: Weighting
Chapter 11 - BMI Food & Drink Industry Glossary
Food & Drink
Mass Grocery Retail
Chapter 12 - BMI Food & Drink Forecasting & Sourcing
How We Generate Our Industry Forecasts
Sourcing
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Current time at just-drinks headquarters: 7:40pm (Tuesday, 22 May 2012)
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