Ireland Food and Drink Report Q4 2012

BMI View: Domestic demand in Ireland is set to remain subdued on account of falling house prices, fiscal austerity, double-digit unemployment and high household indebtedness. We therefore continue to expect that the Irish economy will contract by 0.5% over the course of 2012, with activity undermined by soft eurozone demand for Irish exports. Only a tepid recovery is expected in 2013, when we forecast the economy will expand by 0.8%.

Headline Industry Data (local currency)

2012 per capita food consumption -1.1%; forecast to 2016 +3.7%

2012 alcoholic drink sales +0.5%; forecast to 2016 +7.7%

2012 soft drink sales -0.9%; forecast to 2016 +8.8%

2012 mass grocery retail sales +2.6%; forecast to 2016 +15.1%

Key Industry Trends & Developments

Glanbia Divests Stake in Dairy Ingredients Business: Ireland-based cheese manufacturer Glanbia Foods announced plans to divest a 60% stake in its domestic dairy ingredients division – Dairy Ireland – as the firm shifts its focus to more attractive parts of its business. The firm intends to enter a joint venture, Glanbia Ingredients Ireland, with its largest shareholder Glanbia Co-operative Society to operate one of the largest dairy ingredients suppliers in Ireland. Glanbia said the deal would help it direct ‘financial resources ... towards business segments that deliver the highest return on capital for all shareholders’. According to Glanbia MD John Moloney, the agreement on the dairy ingredients arm will create ‘an exciting new business model for post-quota growth in Irish dairy processing’.

Beer Sales Starting to Flatten Out: In August 2012, the Irish Brewers Association reported that sales of beer in Ireland fell by 2% in 2011. This was hailed as positive news for the sector, which has witnessed more severe declines in recent years. Despite the slowdown in the rate of decline, we do not envisage a return to growth in the sector with volumes expected to continue on a gradual downwards path to 2016. In terms of value, we expect beer sales to increase by about 5% in local currency terms between 2011 and 2016, although consumers are likely to turn to economy brands with the recession undoing the premiumisation trend that had begun to take hold.

Key Risks to Outlook

External Growth: Ireland remains very much dependent on exports and therefore global economic conditions for economic growth. The recessionary conditions that prevail in Europe and the low growth being observed in the US suggest that the Irish economy will continue to struggle through the coming quarters.

Table of contents

Chapter 1 - BMI Industry View

Chapter 2 - SWOT Analysis

Ireland Food Industry SWOT

Ireland Drink Industry SWOT

Ireland Mass Grocery Retail Industry SWOT

Chapter 3 - Business Environment

BMI’s Core Global Industry Views

Table: Core Views

Western Europe Risk/Reward Ratings

Table: Western Europe Food & Drink Risk/Reward Ratings Subcategories, Q (scores out of )

Table: Western Europe Food & Drink Risk/Reward Ratings, Q

Ireland Food And Drink Risk/Reward Rating

Macroeconomic Outlook

Table: GDP By Expenditure

Chapter 4 - Industry Forecast Scenario

Consumer Outlook

Food

Food Consumption

Table: Food Consumption Indicators – Historical Data & Forecasts, -

Confectionery

Table: Confectionery Volume Sales, Production & Trade – Historical Data & Forecasts, -

Processed Food

Table: Meat Volume Sales, Production & Trade – Historical Data & Forecasts, -

Table: Fish Volume Sales, Production & Trade – Historical Data & Forecasts, -

Table: Frozen Fruit & Vegetables Volume Sales, Production & Trade – Historical Data & Forecasts, -

Table: Snack Foods Volume Sales, Production & Trade – Historical Data & Forecasts, -

Table: Pasta Volume Sales, Production & Trade – Historical Data & Forecasts, -

Oils & Fats

Table: Oils & Fats Volume Sales, Production & Trade – Historical Data & Forecasts, -

Dairy

Table: Dairy Volume Sales, Production & Trade – Historical Data & Forecasts, -

Drink

Soft Drinks And Bottled Water

Table: Soft Drinks Volume/Value Sales – Historical Data & Forecasts, -

Alcoholic Drinks

Table: Alcoholic Drinks Volume/Value Sales – Historical Data & Forecasts, -

Hot Drinks

Table: Hot Drinks Volume Sales, Production & Trade – Historical Data & Forecasts, -

Mass Grocery Retail

Table: Mass Grocery Retail Sales Value By Format – Historical Data & Forecasts, -

Table: Organised Retail Market Share

Trade

Table: Food & Drink Trade Balance – Historical Data & Forecasts (US$mn)

Chapter 5 - Food

Key Industry Trends And Developments

Glanbia To Divest Stake In Dairy Ingredients Division

Food Companies Expand And Acquire

Irish Food Players Rationalise And Expand

Kerry Pushes Forward On Global Reach And Technology

Glanbia’s Results Vindicate Nutrition Push

Aryzta Share Price Hit But Offset By Strong Financial Results

Greencore Secures Uniq Acquisition

Market Overview

Food

Confectionery

Prepared Food

Chapter 6 - Drink

Key Industry Trends And Developments

Ireland’s Pub Sector In Crisis

Beer Sales Starting To Flatten Out

Growing US Demand Prompts Investment In Irish Whiskey

International Growth Makes C&C Acquisition Target?

Irish Drink Exports Exceed EURbn

Tough Alcohol Rules Likely to Fail Fiscal Test

Diageo Restructures In Ireland

Alcohol Could Be Target For Tax Revenue

Irish Performance Continues To Dent Britvic’s Results

Soft Drinks Producers Struggle In Ireland

Market Overview

Soft Drinks

Alcoholic Drinks

Chapter 7 - Mass Grocery Retail

Key Industry Trends And Developments

Average Grocery Spend Declines To Lowest Level Since

New Rules To Reduce Cap On Shop Sizes

Poundland To Expand Discount Chain In Ireland

Musgrave Investment Programme For

Musgrave Acquisition Of Superquinn Turns Retail Into Three Horse Race

Ireland’s Retail Sector Dominated By Price

Ireland’s Unsaturated Retail Market Could Attract New Entrants

Market Overview

Table: Structure Of Ireland’s Mass Grocery Retail Market By Estimated Number Of Outlets

Table: Annual Average Sales Per Outlet By Format –

Chapter 8 - Competitive Landscape

Table: Key Players In Ireland’s Food Sector

Table: Key Players in Ireland’s Drink Sector

Chapter 9 - Company Analysis

Food

Kerry Group

Greencore

Drink

C&C

Mass Grocery Retail

Tesco Ireland

Chapter 10 - Demographic Outlook

Table: Ireland's Population By Age Group, - (')

Table: Ireland's Population By Age Group, - (% of total)

Table: Ireland's Key Population Ratios, -

Table: Ireland's Rural And Urban Population, -

Chapter 11 - Risk/Reward Ratings Methodology

Table: Rewards

Table: Risks

Weighting

Table: Weighting

Chapter 12 - BMI Food & Drink Industry Glossary

Food & Drink

Mass Grocery Retail

Chapter 13 - BMI Food & Drink Forecasting & Sourcing

How We Generate Our Industry Forecasts

Sourcing

Related research categories

By sector: General drinks

By market: Ireland (in Europe)