France Food and Drink Report Q3 2011
Report description
The global economic crisis negatively affected consumer confidence and consumer spending in France. It also exacerbated the trend towards private label products and discount retailing, and had a negative impact on consumption. BMI estimates that total food consumption in local currency terms (food and drink, excluding alcoholic drinks) registered a small increase in 2010 after stagnating in 2009. Growth is expected to pick up in 2011, with consumer price-sensitivity expected to soften as economic growth improves. However, we still expect spending cuts to begin weighing on French demand in 2012 and given less favourable base effects, we hold to our forecast for overall growth to fall to 1.7% in 2012.
Headline Industry Data .. 2011 per capita food consumption = +1.2%; forecast to 2015 = +5.2% .. 2011 alcoholic drink sales = -0.2%; forecast to 2015 = -0.8% .. 2011 soft drink sales = +2.6%; forecast to 2015 = +13.1% .. 2011 mass grocery retail sales = +3.2%; forecast to 2015 = +13.1%
Key Industry Trends And Developments General Mills Acquires 50% of Yoplait – US food group General Mills has recently announced that it has entered into a definitive agreement to purchase a controlling stake in French yogurt maker Yoplait for EUR810mn. Under the agreement with co-owners private equity group PAI Partners and milk cooperative Sodiaal, General Mills acquires a 51% stake in Yoplait and a 50% stake in a related entity that holds the global rights to the Yoplait brand. Sodiaal will hold the remaining interest in both groups and the business will be governed by a supervisory board with representation from the co-operative and General Mills. In addition to securing its US licensing deal, the move gives General Mills a brand with strong potential to grow in emerging markets, where the company currently lags behind several of its key rivals. Yoplait is already distributed in Eastern Europe and Latin America and BMI believes the brand could grow exponentially with the support of a major food firm such as General Mills.
Carrefour Shelves Property Spin off/Focused on French Turnaround – Carrefour has recently shelved/postponed plans to spin off 25% of its French property assets. The plans came under heavy fire from analysts when they were revealed earlier in 2011 and BMI suggested that the moves looked like 'financial tinkering with little underlying purpose'. Instead the firm has said it will focus on the turnaround of its French division, with CEO Lars Olofsson announcing that he will take over direct supervision of the unit. The current head of the French business is to leave having been in place for just 14 months. The move highlights just how crucial it is for the firm to start performing in France. However, with suggestions that its much hyped Carrefour Planet rebranding is failing to have the required impact, BMI still believes the company has not yet identified a strategy that can deliver long-term growth to this part of the business.
Key Risk To Outlook Eurozone debt crisis – The greatest short-term risk to the French outlook is a credit event elsewhere in the eurozone. This would elevate risk aversion toward and could destabilise the economic recovery. It would also raise questions about the fiscal solvency of other countries in the eurozone, and while France is among the bloc’s ‘core’ states, its government debt pile of over 80% of GDP in 2010 (according to our estimates) compares unfavourably even with the likes of Spain. Faltering recovery – Another risk is that with the economic recovery still weak, the government’s plans for significant fiscal retrenchment could weigh more heavily on growth than we expect. We still expect stronger expenditure-side fiscal austerity to emerge following elections next year, which will weigh on consumption and employment prospects in 2012.Table of contents
Chapter 1 - BMI Industry View
Chapter 2 - SWOT Analysis
France Food Industry SWOT
France Drink Industry SWOT
France Mass Grocery Retail Industry SWOT
Chapter 3 - Business Environment
BMI’s Core Global Industry Views
Table: BMI Food & Drink Core Views
Western Europe Food & Drink Business Environment Ratings
Table: Western Europe Food & Drink Risk/Reward Ratings Q
France’s Food & Drink Business Environment Ratings
Macroeconomic Outlook
Table: France Economic Activity
Chapter 4 - Industry Forecast Scenario
Consumer Outlook
Food
Total Food Consumption
Table: France Food Consumption Indicators Historical Data & Forecasts
Prepared Food/Canned Food
Table: Canned Food Sales,
Confectionery
Table: Confectionery Value/Volume Sales Historical Data & Forecasts
Drink
Hot Drinks
Table: Hot Drink Value Sales Historical Data & Forecasts
Soft Drinks
Soft Drink Value Sales Historical Data & Forecasts
Alcoholic Drinks
Table: Alcoholic Drink Sales,
Mass Grocery Retail
Table: France Mass Grocery Retail Market Sales By Format (US$bn) Historical Data & Forecasts
Table: Grocery Retail Sales By Format, And
Trade
Table: Food & Drink Trade Balance,
Chapter 5 - Food
Key Industry Trends And Developments
Russia Set to Replace France as Danone’s Largest Market in
Lactalis Launches Takeover Bid for Parmalat
Sodiaal/Entremont Dairy Deal Likely To Be First Of Many In
Bonduelle Bid For General Mills’ Green Giant Seen As Logical
General Mills Acquires % Stake in Yoplait
Functional Food Continues To Grow In Importance
Private Label Surge Could Be Curbed By Regulation Changes
Market Overview
Food Production
France Food & Drink Report Q
© Business Monitor International Ltd Page
Leading Players
Food Consumption
Prepared Food/Canned Food
Confectionery
Trade
Sugar Production
Organic Farming
Chapter 6 - Drink
Key Industry Trends And Developments
China Thirsty For French Wine Culture And Brands
Fate Of Rémy’s Champagne Arm Will Signal LVMH’s Strategy
Belvédère Puts Off Marie Brizard Sale, But For Good?
Pernod Ricard’s Portfolio Clearout
Starbucks Trying To Crack Coffee Market
Moet Increasing Champagne Production as EM Demand Heats Up
Kronenbourg Growth Suggests Opportunities Remain In Difficult Beer Sector
Bottled Water Continues to Stage a Recovery
Market Overview
Soft Drinks
Alcoholic Drinks
Beer
Wine
Spirits
Chapter 7 - Mass Grocery Retail
Key Industry Trends And Developments
French CStore Sector Set for Consolidation
Carrefour Shelves Plan for Property Spinoff/Focused on France Turnaround
Carrefour Looking Online
Intermarche Aims for Growth from Production Arm
Market Overview
Leading Players
Table: Structure Of France’s MGR Market – Estimated Number Of Outlets,
Chapter 8 - Competitive Landscape
Key Players
Table: Key Players in France's Food Sector
Table: Key Players in France's Drink Sector
Table: Key Players in France's Mass Grocery Retail Sector
Chapter 9 - Company Profiles
Food
Groupe Danone
Nestlé France
Drink
LVMH Group (Moët Hennessy Louis Vuitton)
Pernod Ricard
Mass Grocery Retail
Carrefour
Groupe Auchan
Groupe Casino
Chapter 10 - BMI Food & Drink Methodology
Table: Rewards
Table: Risks
Weighting
Table: Weighting
Chapter 11 - BMI Food & Drink Industry Glossary
Food & Drink
Mass Grocery Retail
Chapter 12 - BMI Food & Drink Forecasting And Sourcing
How We Generate Our Industry Forecasts
Sources
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