Malaysia Food and Drink Report Q1 2013

The culture of consumerism is reasonably well entrenched in Malaysia given its relatively high consumption levels. As the lower and middle classes in Malaysia reap the benefits of the country’s rapid economic development, the trend of premiumisation is expected to gather pace over the coming years. We expect stronger growth prospects in the higher-value food categories such as confectionery and functional foods. The halal food sector is also expected to achieve particularly robust dynamism as more companies expand their product offerings beyond non-halal products to capture burgeoning domestic and export opportunities.

Headline Industry Data (local currency)

? 2013 food consumption = +2.9%; compound annual growth rate (CAGR) forecast to 2017 = +3.1%

? 2013 soft drinks value sales = +4.7%; CAGR forecast to 2017 = +5.1%

? 2013 alcoholic drinks value sales = +3.7%; CAGR forecast to 2017 = +4.9%

? 2013 mass grocery retail sales = +9.0%; CAGR forecast to 2017 = +8.1%

Key Industry Trends

Heineken Seals Control Of APB: In September 2012, brewing giant Heineken secured full control of Asia Pacific Breweries after the shareholders of Fraser and Neave voted in favour of the firm's SGD5.6bn (US$4.5bn) bid. Heineken has been forced to pay a hefty premium for the business, at 17X earnings before interest tax and amortisation. However, the firm's CEO has stressed that it was 'worth every dollar' owing to the firm's tremendous exposure to some of Asia's most promising beer markets, including Malaysia.

Malaysia Could Emerge As Key Growth Area For Tesco: Tesco's Asian expansion over its most recent financial year points to the firm's strategy and priorities. In the 12 months to the end of February 2012, the firm had a net gain of 415 stores in the region, of which 43 were hypermarkets, 352 were supermarkets or convenience stores and 20 were franchise stores. These figures do not include the disposal of its Japanese operations, which included 121 outlets. Of interest is the pattern of investment, with Tesco investing heavily in Thailand and South Korea but progressing relatively slowly in China despite its position as one of the region's most exciting consumer markets. With the firm facing headwinds in China and South Korea, we believe Malaysia and Thailand are likely to be the target for major investment in the short-to-medium term.

Risks To Outlook

Headwinds in the US and eurozone remain the key risks to our outlook on the Malaysian economy. Should developments in these regions turn out to be more severe than expected, we could see a continued deterioration in external demand, which could become a further drag on Malaysia’s economic growth. This scenario could dampen consumer sentiment, in turn weighing on domestic demand growth.

Table of contents

Chapter - BMI Industry View

Chapter - SWOT Analysis

Malaysia Food Industry SWOT

Malaysia Drinks Industry SWOT

Malaysia 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

Malaysia's Food & Drink Risk/Reward Ratings

Macroeconomic Outlook

Table: Economic Activity

Chapter - Industry Forecast Scenario

Consumer Outlook

Food

Food Consumption

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

Confectionery

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

Drink

Hot Drinks

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

Alcoholic Drinks

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

Soft Drinks

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

Mass Grocery Retail

Table: MGR Sales By Format – Historical Data & Forecasts, -

Trade

Table: Trade Indicators – Historical Data & Forecasts, -

Chapter - Food

Key Industry Trends And Developments

Malaysia A Key Component Of Multinationals' Arsenal

Yum!'s Divestment To Prove Supportive Of International Ambitions

Building Upon Superiority In Halal Food

Market Overview

Food Production

Confectionery

Halal

Agriculture

Dairy

Chapter - Drink

Key Industry Trends And Developments

A Cloudy Revenue Outlook For YHS

BMI Confident About Dutch Lady Milk's FY Earnings Prospects

Malaysia Catching The Sights Of Regional Players

Diversification A Growing Trend Among Cognac Producers

Market Overview

Soft Drinks

Hot Drinks

Alcoholic Drinks

Chapter - Mass Grocery Retail

Key Industry Trends And Developments

Aeon Could Look To Discount Retailing, Fresh Foods

Malaysia: A Stepping Stone To Regional Ambitions

Dairy Farm To Reap Strong Rewards From Its Regional Diversity

Tesco Leapfrogs Carrefour In South East Asian Battle

Market Overview

Table: Structure Of MGR Market – Estimated Number Of Outlets, -

Table: Structure Of Malaysia's MGR Market – Sales By Format, - (US$bn)

Table: Structure Of Malaysia's MGR Market – Sales By Format, - (MYRbn)

Table: Average Sales Per Outlet By Format,

Table: Grocery Retail Sales By Type, & (%)

Chapter - Competitive Landscape

Key Players

Table; Key Players In Malaysia's Food & Drink Sector

Table: Key Players In Malaysia's MGR Sector

Chapter - Company Monitor

Food

Dutch Lady

Yeo Hiap Seng (Malaysia)

Drink

Permanis

F&N Berhad

Mass Grocery Retail

Dairy Farm

Tesco Malaysia

Carrefour

Aeon Malaysia

Chapter - Demographic Outlook

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

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

Table: Malaysia's Key Population Ratios, -

Table: Malaysia'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

Related research categories

By sector: General drinks

By market: Malaysia (in Asia)