India Food and Drink Report Q4 2012
Report description
Sentiment towards India’s growth story is at a low ebb. Not long ago, the mainstream view was that 8% growth would be the new norm on the back of the country’s demographic dividend, huge infrastructure push and consumer boom potential. Fast forward to today, consensus expectations have capitulated spectacularly and, in our opinion, came down too far. We do not expect a particularly robust rebound and are mindful that major tail risks, ranging from a eurozone breakup to a poor monsoon season, exist. Nor do we expect a return to the 8-10% growth rates seen prior to the 2008-2009 global recession. That said, the structural foundations of the Indian growth story – strong demographics, low leverage and broadening economic liberalisation – remain intact, as do investment opportunities to capture these dynamics. Any marginal improvement in India’s business environment could therefore trigger a revival in investment activity.
Headline Industry Forecasts (local currency) ?? 2012 food consumption growth = +5.4%; compound annual growth rate (CAGR) 2011-2016 = +6.8% ?? 2012 alcoholic drink value sales growth = +12.8%; CAGR to 2016 = +13.3% ?? 2012 soft drink value sales growth = +15.9%; CAGR to 2016 = +16.9% ?? 2012 mass grocery retail sales = +17.1%; CAGR to 2016 = +15.9%
Key Company Trends PepsiCo Expanding In Indian Food: In August 2012, US snack and soft drink producer PepsiCo announced it has partnered with Delhi-based LT Foods to handle the manufacturing, processing and packaging of its rice snack Kurkure in the local market. As part of the deal, Daawat Foods, a majorityowned subsidiary of LT Foods, built a new facility that can produce 796 tonnes of the product per month. This partnership is the first time LT Foods has manufactured, processed and packaged for a company other than itself, and LT Foods has stated that it hopes other products may be produced with PepsiCo in the future. The Indian snack market has been a strong growth market for PepsiCo, and the use of strategic partnerships is potentially a way for the firm to bolster capacity and distribution for its large portfolio of food brands.
Auchan Enters India: In August 2012, French retailer Auchan confirmed that it has signed a deal with the Landmark Group to enter the Indian hypermarket sector. The move will take the form of a franchising agreement, which will help Auchan circumnavigate India’s restrictions on investment in multi-brand retail. Landmark’s 13 existing Max Hypermarkets will be rebranded under the Auchan banner in the India Food & Drink Report Q4 2012 © Business Monitor International Ltd Page 8 fourth quarter of 2012, and the two firms have set a goal of rolling out between 12 to 15 new outlets per year.
Risks To Outlook In India the challenging business environment has a strong sway over our forecasts, with the potential for much more dramatic growth if the regulatory environment were improved. For example India’s retail policy suspension has sent out a negative message to foreign investors about the lack of stability in the country’s policy-making process. Within a span of two weeks, the government backtracked on its decision to allow foreign direct investment in its multi-brand retail sector, fuelling uncertainty among foreign investors on the matter of policy continuity in India.
Table of contents
Chapter 1 - BMI Industry View
Chapter 2 - SWOT Analysis
India Food Industry SWOT
India Drink Industry SWOT
India Mass Grocery Retail Industry SWOT
Chapter 3 - 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, Q (score out of )
Table: Asia Pacific Food & Drink Risk/Reward Ratings, Q
India’s Food And Drink Business Environment Ratings
Macroeconomic Outlook
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, -
Trade
Table: Food & Drink Trade Indicators – Historical Data & Forecasts, -
Drink
Hot Drinks
Table: Hot Drinks Value/Volume Sales – Historical & Forecasts, -
Alcoholic Drinks
Table: Alcoholic Drinks Value/Volume Sales – Historical Data & Forecasts, -
Soft Drinks
Table: Soft Drinks Value/Volume Sales – Historical Data & Forecasts, -
Mass Grocery Retail
Table: MGR Sales By Format – Historical Data & Forecasts, -
Table: Average Outlet Sales By Format –
Chapter 5 - Food
Key Industry Trends And Developments
PepsiCo Expanding In Indian Food
Britannia Industries Posts Sales Growth
Toblerone Launch Follows Record Results
Hershey’s Split From Godrej Is A Positive Move
Western Fast-Food Prospering In India
Yum Seeks To Replicate Chinese Success In India
Sweet Prospects For Krispy Kreme
Increase In Rice Supplies And Fish Import Demand
Market Overview
Food Processing
Food Consumption
India Food & Drink Report Q
© Business Monitor International Ltd Page
Confectionery
Canned Food
Trade
Agriculture
Rice
Dairy
Chapter 6 - Drink
Key Industry Trends And Developments
Is Franchising Key For Lavazza’s Indian Cafe Business?
India, An Exciting Growth Story For Coca-Cola
An Uncertain Earnings Outlook For United Spirits
Dynamism Heating Up In Hot Drinks Sector
Drinks Sector Witnessing A Wave Of Expansionary Investments
Financial Woes At UB Group Prompting Divestment Talks
Market Overview
Soft Drinks
Hot Drinks
Alcoholic Drinks
Spirits
Beer
Wine
Chapter 7 - Mass Grocery Retail
Key Industry Trends And Developments
Auchan Enters India
Cash-And-Carry Is A Bright Spot In Investment Picture
ABRL Slows Expansion Amid Flurry Of Sector Investments
Linking Up With Local Retailers To Circumvent Expansion Hurdles
Market Overview
Leading MGR Players
Table: Structure Of India’s Mass Grocery Retail Market By Estimated Number Of Outlets, -
Table: Structure Of India’s Mass Grocery Retail Market – Sales By Format (US$mn), -
Table: Structure Of India’s Mass Grocery Retail Market – Sales By Format (INRmn), -
Table: Grocery Retail Sales By Format (%) – Historical Data & Forecasts
Chapter 8 - Competitive Landscape
Table: Key Players In India’s Food And Drink Sector
Table: Key Players In India’s Mass Grocery Retail Sector
Chapter 9 - Company Monitor
Food
Hindustan Unilever Limited (HUL)
Gujarat Co-operative Milk Marketing Federation (Amul Dairy)
Britannia
Drink
PepsiCo India
United Breweries (UB)
Coca-Cola India
SABMiller India
Mass Grocery Retail
RPG Retail
Pantaloon Retail India
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Chapter 10 - Demographic Outlook
Table: India’s Population By Age Group, - (‘)
Table: India’s Population By Age Group, - (% of total)
Table: India’s Key Population Ratios, -
Table: India’s 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
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