June 2010 Management Briefing - The BRICM Markets
This month's management briefing for just-drinks' subscribers looks at the developing markets of Brazil, Russia, India, China and Mexico.
The rise of the world’s large emerging markets, Brazil, Russia, India, China and Mexico - or BRICM to give them their popular acronym - has been especially significant for the drinks industry. With its array of international and local brands and a growing inquisitiveness of consumers worldwide towards foreign drinks, the drinks industry is a good fit for globalisation.
While most of the alcoholic and non-alcoholic beverages produced in Brazil are consumed domestically, the exception is the juice sector. Brazil is one of the world’s top three producers of tropical fruit, according to the Brazilian Fruits Institute (IBRAF), and an important global provider of fruit juice. Brazil produces and exports many types of juices including grape, pineapple, apple, mango and guava. However, its primary juice export is orange juice; Brazil is the top global producer and exporter of orange juice, making about 60% of the world’s supply, according to the US Department of Agriculture (USDA).
Russia has a strong drinks sector, especially for spirits, beer and juices. Alcoholic beverage makers are having to deal with flat sales on the domestic market and a government determined to reduce alcohol consumption, forcing quality producers to look to export sales to boost profits.
India’s drinks industry was not harmed badly by the recession, with domestic sales of soft drinks and juice production all growing steadily throughout 2009, according to a recent Euromonitor report. In the soft drinks sector, Coca-Cola was the clear leader with Pepsi close behind, but several Indian companies such as Parle Agro, Parle Bisleri Ltd and Dabur India Ltd proffered some healthy competition.
Given the fast-growing domestic consumption of branded drinks, Chinese beverage manufacturers are racing to expand their production.
According to the US Department of Agriculture (USDA), about 70% of the 2.5bn litres of fruit and vegetable juices sold in Mexico in 2009 were produced domestically. Mexico exported US$266.99m worth of juices in 2009, compared to US$308.23m in 2008 and US$247.29m in 2007, according to the UN Comtrade database.
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- Interview Berry Bros & Rudd CEO Dan Jago - Part II
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