Venezuela Food and Drink Report Q4 2012

Venezuela faces major political and economic uncertainty in the run-up to and immediate aftermath of the October 2012 presidential elections. Although real GDP growth came in at 5.6% y-o-y in H112, we still expect a sharp slowdown in growth in the second half of the year, as the country's current growth model, which is driven by pre-electoral fiscal and monetary stimulus, is unsustainable. Inflation will remain elevated, at the highest level in Latin America, and the operating environment will remain very precarious for foreign multinationals in the country.

Headline Industry Data (US$) ?? Per capita food consumption forecast to 2016 = -33.2%. ?? Alcoholic drink sales forecast to 2016 = -33.2%. ?? Soft drink sales forecast to 2016 = -30.7%. ?? Mass grocery retail sales forecast to 2016 = -31.1%.

Key Company Trends And Developments Cargill to Launch Stevia-Based Truvia in Venezuela: In July 2012 Cargill announced plans to launch Truvia, its stevia-based table-top sweetener, in Venezuela. The move follows success for the brand in the US, where it has already gained around 13% of the market. The move into Venezuela means that Truvia will be available in seven countries on three continents, according to a statement released by the firm, and this would signal that Cargill is planning a full global roll-out. The decision to launch in Venezuela comes despite the poor business environment within the food and drink sector as well as limited prospects for change in the near term. Despite this less-than-promising backdrop, Venezuela remains relatively attractive for certain added-value sectors for which price controls and government interference are not a significant issue.

Key Risks To Outlook Election Uncertainty: The huge uncertainty surrounding policy trajectory beyond the election in October 2012 poses a significant downside risk to our growth forecast. Inflationary Unrest: Inflation in Venezuela will remain elevated, at the highest level in Latin America. Indeed, we believe inflation will tick-up soon after the October presidential election, as reflected in our end-2012 inflation forecast of 26.0% y-o-y. With one of the highest rates of inflation in the world, we expect worker strikes within the private sector to continue to be a persistent feature of Venezuela’s landscape in the medium term.

Table of contents

BMI Industry View

SWOT Analysis

Venezuela Food Industry SWOT

Venezuela Drink Industry SWOT

Venezuela Mass Grocery Retail Industry SWOT

Business Environment

BMI’s Core Global Industry Views

Table: Core Views

Latin America Risk/Reward Ratings

Table: Latin America Risk/Reward Sub-Factor Ratings Q412 (out of 10)

Table: Latin America Food & Drink Risk/Reward Ratings Q412

Venezuela’s Food & Drink Risk/Reward Rating

Macroeconomic Outlook

Strong Growth But Massive Risks Remain

Table: Venezuela – Economic Activity, 2011-2016

Industry Forecast Scenario

Consumer Outlook

Food.

Total Food Consumption

Table: Venezuela Food Consumption Indicators – Historical Data & Forecasts, 2009-2016

Canned And Prepared Food

Table: Canned Food Value/Volume Sales – Historical Data & Forecasts

Table: Fish, 2009-2016

Edible Oil

Table: Oils and fats, 2009-2016

Confectionery

Table: Confectionery Value/Volume Sales – Historical Data & Forecasts, 2009-2016

Drink

Alcoholic Drinks

Table: Alcoholic Drink Value/Volume Sales – Historical Data & Forecasts, 2009-2016

Table: Wine Historical Data & Forecasts, 2009-2016

Soft Drinks

Table: Soft Drink Value Sales – Historical Data & Forecasts, 2009-2016

Hot Drinks

Table: Hot Drink Value Sales – Historical Data & Forecasts, 2009-2016

Mass Grocery Retail

Table: Venezuela Mass Grocery Retail – Value Sales by Format – Historical Data & Forecasts, 2009-2016

Table: Sales Breakdown by Retail Format Type

Trade

Table: Food & Drink Trade Balance – Historical Data & Forecasts, 2009-2016

Food

Key Industry Trends And Developments

Cargill to Launch Stevia-Based Truvia in Venezuela

Parmalat Continues to Find Venezuela Challenging

Currency Devaluation Increases Risk Of Food Appropriations

Venezuela Food & Drink Report Q4 2012

Dairy Sector Attracts Investment, But BMI Cautious

Market Overview

Food Production

Confectionery

Agriculture

Dairy

Meat

Seafood

Drink

Key Industry Trends And Developments

Femsa Post Sales Growth

Soft Drink Firms Targeted By New Price Cap Laws

Empresas Polar Takes Stake In Mexican Firm

AmBev Seeks Additional Scale In Difficult Venezuela Market

Attack On Alcohol

Coffee Sector Nationalised

Market Overview

Alcoholic Drinks

Soft Drinks

Hot Drinks

Mass Grocery Retail

Key Industry Trends And Developments

Competition From Mercal

Nationalisation Of Exito

Market Overview

Leading Retailers

Table: Structure Of Mass Grocery Retail Market – Estimated Number Of Outlets

Table: Structure Of Venezuela’s Mass Grocery Retail Market – Sales Value By Format (US$bn)

Table: Average Annual Value Sales By Unit Per Format (2009)

Competitive Landscape

Table: Key Players In Venezuela's Food Sector

Table: Key Players In Venezuela's Drink Sector

Table: Key Players In Venezuela's Mass Grocery Retail Sector

Company Monitor

Food.

Alimentos Heinz CA

Cargill de Venezuela

Empresas Polar

Drink

Pernod Ricard Venezuela

Coca-Cola FEMSA

Diageo de Venezuela

Mass Grocery Retail

Mercal CA

Makro Venezuela

Table: Venezuela's Population By Age Group, 1990-2020 ('000)

Table: Venezuela's Population By Age Group, 1990-2020 (% of total)

Table: Venezuela's Key Population Ratios, 1990-2020

Related research categories

By sector: General drinks

By market: Venezuela (in South America)