Philippines Food and Drink Report 2013
Report description
BMI View: While the Philippines' economy continues to expand at a healthy rate, and despite its expanding base of young consumers, we remain relatively pessimistic about the near-to-mid-term potential of its grocery and food and drink markets. Multinational investment has been slow to penetrate the market, which in itself continues to present numerous challenges to players in the sectors. Issues such as widespread poverty, highly uneven income distribution, underdeveloped mass grocery retail networks and high levels of unemployment will continue to weigh on the consumer outlook.
Headline Industry Data (local currency)
?? 2013 per capita food consumption = +4.32%; compound annual growth rate (CAGR) forecast to 2017 = +4.16
%?? 2013 alcoholic drinks value sales = +7.19%; CAGR growth forecast to 2017 = +6.86
%?? 2013 soft drinks value sales = +7.20%; CAGR growth forecast to 2017 = +7.75
%?? 2013 mass grocery retail sales = +6.92%; CAGR growth forecast to 2017 = +6.85
%Industry Developments
General Mills Pulls out of the Philippines: In July 2012, US food giant General Mills announced that it is pulling out of the Philippines, having operated in the market for 12 years. The firm cited the unit's poor performance, with General Mills Philippines stating that it 'can no longer sustain our business in the increasingly challenging environment we face'. The move will see the firm shut its Häagen-Dazs cafes and will also see brands such as Gold Medal, Green Giant, Nature Valley, Pillsbury and Betty Crocker disappear from shelves. This move comes despite General Mills' aim to build its emerging market exposure. It highlights the relative unattractiveness of emerging markets where growth is less dynamic and where consumer demand, at the premium end in particular, has been slower to take hold.
Japanese FamilyMart Targets the Philippines: In January 2012, reports emerged that Japanese convenience store retailer FamilyMart plans to open around 600 outlets in Indonesia and the Philippines by 2015, targeting expansion away from its domestic market, as an ageing population weighs on the growth prospects of the Japanese mass grocery retail sector. In fact, in September 2012, real estate giant Ayala Land Inc was reported to have put aside PHP300mn for the opening of 100 FamilyMart outlets. In 2013, the company is planning to open 30 stores, at a cost of PHP80mn. In the project, Ayaya is partnering Rustan's and Japanese conglomerate Itochu (which is the main shareholder in FamilyMart).
The FamilyMart network is expected to provide strong competition to Philippines Seven - a 7-Eleven franchisee in the Philippines - and the other leading convenience player in the country, Mini Stop, which is run by the Gokongwei group.
Risks To Outlook
External Environment Poses Risks: Looking forward to 2013, we do not see scope for a pickup in export growth, which would buoy economic growth in the Philippines. Although risks remain weighted to the downside, we expect regional economic growth to stabilise in 2013, helping to prop up external demand. Furthermore, after a very poor 2012, there is potential for a rebound in demand for electronic goods. The current account will also continue to receive support from remittances, which have historically proven to be somewhat immune even to extreme global economic downturns. Nevertheless, we have cut our 2013 nominal export growth forecast, as a result of milder global price pressures and what we now envisage to be only a moderate regional growth rebound.
Table of contents
Chapter - Executive Summary
Chapter - SWOT Analysis
Philippines Food Industry SWOT
Philippines Drink Industry SWOT
Philippines 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
Philippines' Food & Drink Risk/Reward Rating
Macroeconomic Outlook
Table: Economic Activity
Chapter - Industry Forecast Scenario
Consumer Outlook
Food
Food Consumption
Table: Food Consumption Indicators – Historical Data & Forecasts, 2010-2017
Canned Food
Table: Canned Food Value/Volume Sales – Historical Data & Forecasts, 2010-2017
Confectionery
Table: Confectionery Value/Volume Sales – Historical Data & Forecasts, 2010-2017
Fish
Table: Fish Volume Sales, Production & Trade – Historical Data & Forecasts, 2010-2017
Dairy
Table: Dairy Volume Sales, Production & Trade – Historical Data & Forecasts, 2010-2017
Drink
Hot Drinks
Table: Hot Drinks Value Sales – Historical Data & Forecasts, 2010-2017
Soft Drinks
Table: Soft Drinks Value Sales – Historical Data & Forecasts, 2010-2017
Alcoholic Drinks
Table: Alcoholic Drinks Value/Volume Sales – Historical Data & Forecasts, 2010-2017
Trade
Table: Food & Drink Trade Indicators – Historical Data & Forecasts, 2011-2017
Mass Grocery Retail
Table: Mass Grocery Retail Sales – Historical Data & Forecasts, 2010-2017
Table: Sales Breakdown By Retail Format Type
Chapter - Food
Key Industry Trends And Developments
General Mills Pulls Out Of The Philippines
Taiwanese Uni-President To Increase Production Capacity In The Philippines
McDonald's Versus Jollibee In Fast-Food War
Jollibee Banking On Dynamic Asian Growth
An Attractive Market For Food Producers
Alaska Milk Grows Sales
Market Overview
Food Processing
Agriculture
Organic Farming
Chapter - Drink
Key Industry Trends And Developments
Spirits Sector Consolidation
San Miguel Brewery Posts Flat Volumes In The First Nine Months Of 2012
WTO's Ruling Has Mixed Implications For Spirits Industry
Eyeing The Philippine Drinks Potential
Market Overview
Hot Drinks
Soft Drinks
Alcoholic Drinks
Chapter - Mass Grocery Retail
Key Industry Trends And Developments
Japanese FamilyMart Targets The Philippines
Rustan's Signs Distribution Deal With Casino
Philippines Seven Embarks On Expansion Drive
Market Overview
Table: Mass Grocery Retail Market By Estimated Number Of Outlets
Table: Average Sales Per Outlet By Format – 2012
Table: Mass Grocery Retail Sales By Format (PHPbn)
Chapter - Competitive Landscape
Key Players
Table: Key Players In The Philippine Food Industry
Table: Key Players In The Philippine Drink Industry
Table: Key Players In The Philippine Mass Grocery Retail Sector
Chapter - Company Monitor
Food
Alaska Milk Corporation
Universal Robina Corp (URC)
Drink
Tanduay Holdings
San Miguel Brewery (SMB)
Mass Grocery Retail
SM Investments – Retail Business (SM)
Philippine Seven Corp
Chapter - Demographic Outlook
Table: Philippines' Population By Age Group, 1990-2020 ('000)
Table: Philippines' Population By Age Group, 1990-2020 (% of total)
Table: Philippines' Key Population Ratios, 1990-2020
Table: Philippines' 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: 7:03pm (Thursday, 23 May 2013)
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