India Food and Drink Report Q1 2013
Report description
In September 2012, in what might be in time remembered as the most significant global retail event of 2012, India finally opened up its retail industry to foreign investors, potentially paving the way for the likes of Carrefour, Tesco and Walmart to enter what is potentially an outstanding retail opportunity. The new legislation has been met very favourably by the pro-business lobby, which has largely grown frustrated at how long it has taken India to pass this legislation, especially after some false hopes, including most recently in late 2011 when the government reversed its decision to allow foreign retailers to invest in controlling stakes. We believe Walmart to be the strong favourite to lead investment in India over the next few years, ahead of Carrefour and Tesco who, as we have argued previously, are preoccupied with sorting out their domestic businesses.
Headline Industry Forecasts (local currency, INR)
?? 2013 food consumption growth = +7.0%; compound annual growth rate (CAGR) 2012-2017 = +7.2%
?? 2013 alcoholic drink value sales growth = +13.2%; CAGR to 2017 = +13.0%
?? 2013 soft drink value sales growth = +19.0%; CAGR to 2017 = +16.9%
?? 2013 mass grocery retail sales = +18.5%; CAGR to 2017 = +15.1%
Key Company Trends
Diageo Continues India Push With United Spirits Stake: In November 2012, UK-based multinational drinks firm Diageo agreed to purchase a majority stake in United Spirits, India's largest spirits producer. Diageo will pay INR11.7bn (US$2bnn) for a 53.4% stake in the business, which in our view will put the firm in a strong position to drive growth within the Indian spirits sector. Previous discussions between the two firms broke down in 2009. However, with United Breweries Group currently under pressure owing to the struggles of the group's airline business, Kingfisher, a deal has now been successfully brokered. General Mills Eyes India: In September 2012, US food giant General Mills said that it is looking for acquisitions in India to cement its exposure to the world's most attractive emerging markets. In an interview with the Financial Times, the firm's CFO suggested that exposure to the Indian market would complement its strong growth in China and improved position in Brazil following the acquisition of Yoki.
Risks To Outlook
Regional policy is currently just as important as that on a national level at determining India's investment appeal. This means that regional politics and the unpredictability of local level policies could be a major risk to investment. Taking the multi-brand retail bill, for example, the lack of consensus on the issue means that foreign players' involvement in the sector is not enshrined by national law. Even if a state were to vote for liberalisation today, there would be no guarantee that the next regime would honour such agreements. There are 16 elections in India's states and union territories to be held by 2014, not to mention general elections in that year, meaning that companies looking to invest in the sector may have to consider separate alliances or partnerships with state parties (both ruling and opposition) in order to safeguard their long-term business strategies. Such dialogue will be sluggish at best, suggesting to us that investment in the multi-brand retail will flow at a gradual pace.
Table of contents
Chapter - BMI Industry View
Chapter - SWOT Analysis
India Food Industry SWOT
India Drink Industry SWOT
India 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, Q113 (score out of 10)
Table: Asia Pacific Food & Drink Risk/Reward Ratings, Q113
India's Food And Drink Risk/Reward Ratings
Macroeconomic Outlook
Table: GDP By Expenditure
Chapter - Industry Forecast Scenario
Consumer Outlook
Food
Food Consumption
Table: Food Consumption Indicators – Historical Data & Forecasts, 2010-2017
Confectionery
Table: Confectionery Value/Volume Sales – Historical Data & Forecasts, 2010-2017
Trade
Table: Food & Drink Trade Indicators – Historical Data & Forecasts, 2010-2017
Drink
Hot Drinks
Table: Hot Drinks Value/Volume Sales – Historical & Forecasts, 2010-2017
Alcoholic Drinks
Table: Alcoholic Drinks Value/Volume Sales – Historical Data & Forecasts, 2010-2017
Soft Drinks
Table: Soft Drinks Value/Volume Sales – Historical Data & Forecasts, 2010-2017
Mass Grocery Retail
Table: MGR Sales By Format – Historical Data & Forecasts, 2010-2017
Table: Average Outlet Sales By Format – 2011
Chapter - Food
Key Industry Trends And Developments
General Mills Eyes India
Hershey Takes Control Of Indian JV
McDonald's To Go Meat-Free
PepsiCo Expanding In Indian Food
Britannia Industries Posts Sales Growth
Toblerone Launch Follows Record Results
Hershey's Split From Godrej Is A Positive Move
Yum Seeks To Replicate Chinese Success In India
Sweet Prospects For Krispy Kreme
Increase In Rice Supplies And Fish Import Demand
Market Overview
Food Processing
Food Consumption
Confectionery
Canned Food
Trade
Agriculture
Rice
Dairy
Chapter - Drink
Key Industry Trends And Developments
Varun Beverages Eyes Indian Growth
Diageo Continues India Push With United Spirits Stake
Coca-Cola Focused On Indian Energy Drinks
Is Franchising Key For Lavazza's Indian Cafe Business?
India, An Exciting Growth Story For Coca-Cola
An Uncertain Earnings Outlook For United Spirits
Dynamism Heating Up In Hot Drinks Sector
Drinks Sector Witnessing A Wave Of Expansionary Investments
Financial Woes At UB Group Prompting Divestment Talks
Market Overview
Soft Drinks
Hot Drinks
Alcoholic Drinks
Spirits
Beer
Wine
Chapter - Mass Grocery Retail
Key Industry Trends And Developments
India Opens Up Retail - Walmart To Lead?
Cash-and-Carry Targeted For Investment
Auchan Enters India
Cash-And-Carry Is A Bright Spot In Investment Picture
ABRL Slows Expansion Amid Flurry Of Sector Investments
Market Overview
Leading MGR Players
Table: Structure Of India's Mass Grocery Retail Market By Estimated Number Of Outlets, 2005-2011
Table: Structure Of India's Mass Grocery Retail Market – Sales By Format (US$mn), 2005-2011
Table: Structure Of India's Mass Grocery Retail Market – Sales By Format (INRmn), 2005-2011
Table: Grocery Retail Sales By Format (%) – Historical Data & Forecasts
Chapter - Competitive Landscape
Table: Key Players In India's Food And Drink Sector
Table: Key Players In India's Mass Grocery Retail Sector
Chapter - Company Monitor
Food
Hindustan Unilever Limited (HUL)
Gujarat Co-operative Milk Marketing Federation (Amul Dairy)
Britannia
Drink
PepsiCo India
United Breweries (UB)
Coca-Cola India
SABMiller India
Mass Grocery Retail
RPG Retail
Pantaloon Retail India
Chapter - Demographic Outlook
Table: India's Population By Age Group, 1990-2020 (‘000)
Table: India's Population By Age Group, 1990-2020 (% of total)
Table: India's Key Population Ratios, 1990-2020
Table: India's Rural And Urban Population, 1990-2020
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: 12:23am (Thursday, 23 May 2013)
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