Singapore Food and Drink Report Q1 2013
Report description
Our outlook for Singapore's consumer sector remains positive, as the country's economy has weathered the global economic downturn fairly well. In fact, the Singaporean consumer is one of the bright spots for the city-state's economy, in line with rising wealth levels and incomes. We forecast private consumption to grow by a solid 5.5% in 2013, following estimated 3.5% growth in 2012, and expect the sector to be an outperformer in the years to come, as the strong demand that we have seen in both housing and vehicle sales continuing to point to the underlying strength of the Singaporean consumer. Furthermore, the fundamentals within Singapore's domestic economy remain sound - in particular, the labour market has shown marked resilience to the regional slowdown. Given the ongoing external malaise and the economy's slower than expected growth in Q312, we have downgraded our full-year GDP growth estimate from 2.6% to 1.9%, although we continue to forecast for the economy to see a rebound to 3.6 %in 2013.
Headline Industry Data (local currency)
?? 2013 food consumption = +7.16%; compound annual growth rate (CAGR) forecast to 2017 = 2.93
%?? 2013 alcoholic drink value sales = +7.03%; CAGR forecast to 2017 = +5.68
%?? 2013 soft drink value sales = +3.49%; CAGR forecast to 2017 = +2.94
%?? 2013 mass grocery retail sales = +2.92%; CAGR forecast to 2017 = +2.76
%Industry Trends & Developments
Heineken Takes Full Control of APB: In October 2012, Dutch 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.
Petra Foods' Sales Take A Hit: Singapore-based cocoa ingredients and chocolate confectionery manufacturer Petra Foods' sales fell 16.5% year-on-year (y-o-y) to US$359.9mn in Q312, and its earnings before interest, tax, depreciation and amortisation decreased 7.4% y-o-y to US$28.7mn in the quarter. The decline has been attributed to weaker chocolate consumption globally, which reduced profits from the company's cocoa ingredients division by 57.8% y-o-y to US$6.7mn. Petra Foods aims to focus on higher-value custom ingredients and is expected to leave Eastern European markets in a bid to restore profitability.
Risks To Outlook
With inflation stubbornly remaining above its long-term average, Singapore is once again in stagflationary territory. Headline inflation hit 4.7% in September 2012, up considerably from 3.9% in August as the housing and transportation categories continued to pressure prices upwards. Although our forecasts do not indicate that inflation will outpace growth in 2013, we do believe that risks of this phenomenon are growing.
Downside risks to our expectations of softer demand conditions in Singapore could stem from a sharper deterioration of the external macroeconomic environment. With the four largest economic blocs in the world estimated to have had a decidedly weak 2012, Singapore is likely to feel serious knock-on effects as one of the most sensitive barometers to global economic conditions. Indeed, exports to the US, China, EU, and Japan make up 41.7% of Singapore's total exports, and exports make up approximately 206% of Singapore's total economic output.
Table of contents
Chapter - BMI Industry View
Chapter - SWOT Analysis
Singapore Food Industry SWOT
Singapore Drink Industry SWOT
Singapore 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
Singapore'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, 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
Organics
Table: Organic Food Value Sales – Historical Data & Forecasts, 2010-2017
Drink
Hot Drinks
Table: Hot Drinks Value/Volume Sales – Historical Data & 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: Mass Grocery Retail Sales – Historical Data & Forecasts, 2010-2017
Trade
Table: Trade Indicators – Historical Data & Forecasts, 2010-2017
Chapter - Food
Key Industry Trends And Developments
Baby Boom Presents Commercial Opportunities
Strengthening Procurement And Manufacturing Processes
Local Companies Report Solid Growth
Market Overview
Agriculture
Food Processing
Chapter - Drink
Key Industry Trends And Developments
Heineken Secures Full Control of APB
YHS And F&N Witnessing Mixed Headwinds
International Expansion The Antidote To Domestic Market Saturation
Market Overview
Soft Drinks
Alcoholic Drinks
Hot Drinks
Chapter - Mass Grocery Retail
Key Industry Trends And Developments
Carrefour Exiting Singapore
Domestic Retailers Expanding Overseas
Retailers Linking Up With Overseas Suppliers
Organised Retail To Gain Prominence
Market Overview
Table: Structure Of Mass Grocery Retail Market By Estimated Number Of Outlets, 2005-2011
Table: Structure Of Mass Grocery Retail Market By Value (US$bn), 2005-2011
Table: Structure Of Mass Grocery Retail Market By Value (SGDbn), 2005-2011
Table: Estimated Average Sales Per Outlet By Format, 2011
Table: Grocery Retail Sales By Format
Chapter - Competitive Landscape
Table: Key Players In Singapore's Food Sector
Table: Key Players In Singapore's Drinks Sector
Chapter - Company Monitor
Food
Auric Pacific
Petra Foods
Drink
Asia Pacific Breweries (APB)
Fraser & Neave (F&N)
Mass Grocery Retail
NTUC FairPrice
Sheng Siong
Chapter - Demographic Outlook
Table: Singapore's Population By Age Group, 1990-2020 ('000)
Table: Singapore's Population By Age Group, 1990-2020 (% of total)
Table: Singapore's Key Population Ratios, 1990-2020
Table: Singapore'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
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The office is closed during weekends.
Current time at just-drinks headquarters: 1:35am (Thursday, 20 June 2013)
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