Hong Kong Food and Drink Report 2013
Report description
BMI View: Hong Kong is one of Asia Pacific's smallest consumer markets, with its population standing at just over the 7mn mark. Therefore, from a demographic standpoint, there are few attractions for consumer industry investors. Additionally, we expect the reversal in Hong Kong's booming property market to weigh on consumer purchasing power and curtail spending on higher value consumer goods. Generally speaking, most food and drink segments are highly mature, although consumers remain interested in novelty and convenience, which still provides opportunities for food and drink companies.
Headline Industry Data (local currency)
?? 2013 per capita food consumption growth = +2.10%; forecast compound annual growth rate (CAGR) to 2017 = +1.88
%?? 2013 alcoholic drinks sales growth = +5.10%; forecast CAGR to 2017 = +4.42
%?? 2013 soft drinks sales growth = +5.88%; forecast CAGR to 2017 = +4.57
%?? 2013 mass grocery retail sales growth = +5.93%; forecast CAGR to 2017 = +5.04
%Key Trends And Developments
Dairy Farm International Post Strong H112 Results: Hong Kong-based retail company Dairy Farm International posted strong results for the first half of its financial year. The company's sales for the sixmonth period ended June 30 2012 increased by 10% to US$5.5bn compared to H111, while its underlying profit was up 12% to US$243mn. Dairy Farm's strong results were driven by some small acquisitions it made during the six months, including a 70% share in a Cambodia-based supermarket chain and a 50 %stake in Philippines-based retailer Rustan's.
Hong Kong-Listed Brewer Up for Sale: In February 2012, Chinese brewers expressed interest in acquiring the beer assets of Kingway Brewery, which is listed in Hong Kong. Potential buyers included Tsingtao, Beijing Yanjing Brewery (which had emerged as a front runner, but abandoned the plan over price disagreements), Guangzhou Zhujiang Brewery, as well as CR Snow, which is a joint venture between China Resources Enterprise and SABMiller. In September 2012, Kingway was reportedly still in talks with potential partners. The company is mulling a sale of all or part of its business as it struggles to generate profits amid a highly competitive environment.
Risks To Outlook
Political Risks: While we believe Hong Kong will remain at or near the top of our political risk ratings table over the next decade, a number of risks could lead to rising political instability. The sluggish pace of democratic reforms will continue to cause anger among pro-democracy supporters, and there is the potential for large-scale public protests. A lack of affordable housing and rising income inequality also could pose threats to social stability.
Economic Risks: While a high degree of financial stability helps to counterbalance Hong Kong's longterm economic weaknesses, namely its high dependence on trade and over-reliance on the export of manufactured goods, Hong Kong is at risk of a larger-than-expected decline in the domestic property market that would result in a sharp fall in domestic consumer confidence and spending. A sharper-thananticipated cooling of the Chinese economy as tighter credit conditions start to take effect could also weigh on domestic consumer sentiment given the key trading relationship between the two countries.
Table of contents
Chapter - BMI Industry View
Chapter - SWOT Analysis
Hong Kong Food Industry SWOT
Hong Kong Drink Industry SWOT
Hong Kong Mass Grocery Retail Industry SWOT
Chapter - Business Environment
BMI's Core Global Industry Views
Table: Core Views
Asia Pacific Food & Drink Risk/Reward Ratings
Table: Food & Drink Risk/Reward Sub-Factor Ratings, Q (score out of )
Table: Asia Pacific Food & Drink Risk/Reward Ratings, Q
Hong Kong's Food & Drink Risk/Reward Rating
Macroeconomic Outlook
Table: Economic Activity
Chapter - Industry Forecast Scenario
Consumer Outlook
Food
Food Consumption
Table: Food Consumption Indications – Historical Data & Forecasts
Canned Food
Table: Canned Food Value/Volume Sales – Historical Data & Forecasts
Confectionery
Table: Confectionery Value/Volume Sales – Historical Data & Forecasts
Meat
Table: Meat
Pasta
Table: Pasta
Frozen Food
Table: Frozen Food
Dairy
Table: Dairy
Drink
Alcoholic Drinks
Table: Alcoholic Drinks Value/Volume Sales – Historical Data & Forecasts
Soft Drinks
Table: Soft Drinks Value/Volume Sales – Historical Data & Forecasts
Hot Drinks
Table: Hot Drinks Value Sales – Historical Data & Forecasts
Trade
Table: Food & Drink Trade Indicators – Historical Data & Forecasts
Mass Grocery Retail
Table: Mass Grocery Retail Sales – Historical Data & Forecasts
Table: Sales Breakdown by Retail Format Type
Chapter - Food
Industry Trends And Developments
Lindt & Sprüngli Plans To Consolidate Its Hong Kong Unit
Hong Kong's Chain Loses Out As Walmart To Deal Directly With Factories
Market Overview
Food Production
Chapter - Drink
Industry Trends And Developments
Hong Kong-Listed Brewer Up For Sale
UK's Whisky Distiller Opens New Office In Hong Kong
Wine Remains Dynamic
Innovation Still Crucial
Market Overview
Alcoholic Drinks
Soft Drinks
Hot Drinks
Chapter - Mass Grocery Retail
Industry Trends And Developments
Dairy Farm International Post Strong H Results
Intensifying Competitive Pressures Could Undermine Uny's Growth Potential
Premium Interest
Morrisons Opens Office in Hong Kong
Market Overview
Table: Structure Of Mass Grocery Retail Market By Estimated Number of Outlets
Table: Structure Of Mass Grocery Retail Market – Sales (HKDmn) By Format
Table: Structure Of Mass Grocery Retail Market – Sales (US$mn) By Format
Table: Average Sales Per Outlet By Format –
Chapter - Competitive Landscape
Key Players
Table: Key Players In Hong Kong's Food Sector
Table: Key Players In Hong Kong's Drink Sector
Table: Key Players In Hong Kong's Mass Grocery Retail Sector
Chapter - Company Monitor
Food
Golden Resources Development
Drink
Tsit Wing
San Miguel Hong Kong
Vitasoy International
Mass Grocery Retail
Dairy Farm International
AS Watson
Chapter - Demographic Outlook
Table: Hong Kong's Population By Age Group, - (')
Table: Hong Kong's Population By Age Group, - (% of total)
Table: Hong Kong's Key Population Ratios, -
Table: Hong Kong's Rural And Urban Population, -
Chapter - Risk/Reward Ratings Methodology
Table: Rewards
Table: Risks
Weighting
Table: Weighting
Chapter - BMI Food & Drink Industry Glossary
Food & Drink
Mass Grocery Retail
Chapter - BMI Food & Drink Forecasting & Sourcing
How We Generate Our Industry Forecasts
Sourcing
The just-drinks office is currently: Closed
Office opening hours
Mon-Thursdays 9:00am-5:30pm
Fridays 9:00am-4:30pm
The office is closed during weekends.
Current time at just-drinks headquarters: 2:50am (Thursday, 23 May 2013)
Need help? Contact the research team
