United States Food and Drink Report Q4 2012
Report description
US private consumption is expected to continue to recover only slowly as a combination of still-high unemployment, ongoing deleveraging, low wage growth and a dependency on government transfers continue to weigh on spending growth. Given a fairly strong start to the year for consumption, we have bumped up our forecast for 2012 consumption growth to 2.2% from 2.1%. However, we maintain our 2013 forecast at 2.4%, with downside risks. Our primary concern over the health of the consumer is that much of current consumption is being fed by a falling propensity to save, which is unsustainable. Labour market growth has been tepid and erratic, in line with our expectations, which correlates to the fact that wage growth has been very weak. Meanwhile, temporary fiscal provisions intended to underpin consumption will come to an end in January 2013, including payroll tax cuts.
Headline Industry Data (local currency terms)
2012 per capita food consumption = +1.7%; forecast compound annual growth rate to 2016 = +2.1%
2012 alcoholic drinks value sales = +3.2%; forecast compound annual growth rate to 2016 = +3.5%.
2012 soft drink value sales = +3.4%; forecast compound annual growth rate to 2016 = +3.0%.
2012 mass grocery retail sales = +3.7%; forecast compound annual growth rate to 2016 = +2.8%.
Key Industry Trends And Developments
PepsiCo Dairy Launch Against Sceptical Background: In July 2012, despite criticism that it has lost sight of its traditional strengths, PepsiCo continued to advance into healthier categories, with the firm announcing this month its new yoghurt offering for the US market. Through a joint venture with Germany’s Müller, the firm is to launch three new products: Müller Corner, Müller FrutuUp and Müller Greek Corner. The operation is set to take advantage of PepsiCo’s existing chilled distribution network, honed through its juice brand Tropicana, and the dairy expertise of Müller. Recent trends suggest that dairy demand will grow strongly in coming years, with the sector offering both a healthy eating message and convenience. However, in a broader sense we remain sceptical about PepsiCo’s push into healthier categories and continue to believe that the firm may be better off focusing on its existing strengths.
Boston Beer No Longer Surefire Bet On Craft Boom: In August 2012, US-based craft brewer Boston Beer Company said in a conference call that the growth in the number of craft breweries is having a negative impact on sales of its flagship Sam Adams brand, following a decline in sales in the first half of 2012. Boston Beer is the biggest player in the craft beer sector, but the firm has said that a proliferation of new brands has meant that its own hold on the sector is loosening, despite increased consumer interest and growing shelf space. The revelation comes at the same time as the Brewers Association reveals that the number of breweries in the US has hit a 125-year high, with 97% of these being craft brewers. This represents an increase of 250 on 2011’s figure, and the association also revealed that there was currently 1,252 breweries at the planning stage (up from 725 at the same point in 2011).
Key Risks To Outlook
Risks Remain To Downside: The risks to our consumer outlook are mostly to the downside. We expect private consumption growth to remain subdued, constrained by a weak labour market, elevated savings rates and stagnant house prices, while government deficit reduction will weigh on economic activity. In the meantime, the European crisis will continue to pose downside risks to the export sector. Another downside risk to our outlook is a major domestic policy error, especially on the fiscal side, which could push the US into recession.
Table of contents
Chapter 1 - BMI Industry View
Chapter 2 - SWOT Analysis
US Food Industry SWOT
US Drinks Industry SWOT
US Mass Grocery Retail Industry SWOT
Chapter 3 - Business Environment
BMI’s Core Global Industry Views
Table: Core Views
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 Value/Volume Sales – Historical Data & Forecasts, -
Canned Food
Table: Canned Food Value/Volume Sales – Historical Data & Forecasts, -
Dairy
Table: Dairy Volume Sales, Production & Trade – Historical Data & Forecasts, -
Drink
Alcoholic Drinks
Table: Alcoholic Drinks Value/Volume Sales – Historical Data & Forecasts, -
Beer
Spirits
Wine
Soft Drinks
Table: Soft Drinks Value/Volume Sales – Historical Data & Forecasts
Hot Drinks
Table: Hot Drinks Value/Volume Sales – Historical Data & Forecasts, -
Trade
Table: Food & Drink Trade Indicators – Historical Data & Forecasts, -
Mass Grocery Retail
Table: Mass Grocery Retail Sales By Format – Historical Data & Forecasts, -
Table: Sales Breakdown By Retail Format Type
Chapter 5 - Food
Key Industry Trends And Developments
Campbell Soup Focuses On Snack Division
Heinz Q Boosted By EM
PepsiCo Dairy Launch Against Sceptical Background
Campbell Gets Fresh With Bolthouse Purchase
Hillshire Brands An Attractive Takeover Target
General Mills Investing And Reorganising To Boost Growth
United Biscuits Snack Unit May Not Be Good Fit For Kellogg
Market Overview
Food Consumption
Confectionery
Canned Food
Agriculture
Chapter 6 - Drink
Key Industry Trends And Developments
Signs Of Improvement In Beer
Boston Beer No Longer Surefire Bet On Craft Boom
Monster Bid Would Make Sense For Coke
Modelo Deal Focused On Mexican Consumer Story
Activist Investor Pushing For PepsiCo Split
Pernod Ricard Moving On From Havana Club Battle
Craft Beer Continues To Outperform; Signs Of Life In Mainstream Segment
Beam Outperformance Reflected In Increased Valuation
Fast-Growing Coconut Water Category Attracts Further Investment
Growing US Demand Prompts Round Of Investment In Irish Whiskey
Bouyant Wine Demand Despite Weak Economic Backdrop
Market Overview
Alcoholic Drinks
Soft Drinks
Hot Drinks
Chapter 7 - Mass Grocery Retail
Key Industry Trends And Developments
Tesco Stands Firm On Fresh & Easy For Now
Momentum At Walmart Points To Strategy Success
-Eleven Expansion Plans Highlight Dynamism Of Convenience Sector
Discount Stores Still Showing Momentum Despite Economic Improvement
Market Overview
Main Players
Table: MGR Market Structure – Number Of Outlets
Table: MGR Market Structure – Sales By Format (US$bn)
Table: Average Annual Sales Value By Format , (US$mn)
Chapter 8 - Competitive Landscape
Key Players
Table: Key Players – Food
Table: Key Players – Drink
Table: Key Players – Mass Grocery Retail
Chapter 9 - Company Profiles
Food
Kraft
Kellogg Company
General Mills
Tyson Foods
The Hershey Company
Drink
The Coca-Cola Company
PepsiCo
Anheuser-Busch InBev
MillerCoors
Mass Grocery Retail
Walmart Stores
Chapter 10 - Demographic Outlook
Table: The United States’ Population By Age Group, - (‘)
Table: The United States’ Population By Age Group, - (% of total)
Table: The United States’ Key Population Ratios, -
Table: The United States’ 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
The just-drinks office is currently: Open
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: 12:45pm (Wednesday, 19 June 2013)
Do you need help finding the right report? Speak to a member of our research team online.
Why not check our FAQ section? Your question may have been answered already!
Need help? Contact the research team
