South Africa Food and Drink Report Q4 2011
Report description
While South Africa is clearly the most advanced consumer economy in Africa, it still holds vast potential, which is why the likes of Walmart are keen to get in now. How successful South Africa is in creating the conditions for unemployment to come down significantly will have a large bearing on how well it does relative to its potential. A per capita GDP of about US$7,000 in 2010 is expected to grow well past US$20,000 by 2019. In our opinion, Walmart’s entry could set a benchmark in terms of big Western retailers coming into South Africa, investing in cost and eventually using South Africa as a springboard into wider Sub-Saharan Africa.
Headline Industry Data 2011 per capita food consumption growth in local currency = 9.6%; forecast compound annual growth to 2015 = 10.3%. 2011 beer volume sales = 5.0%; forecast compound annual growth to 2015 = 3.6%. 2011 mass grocery retail sales = 10.6%; forecast compound annual growth to 2015 = 11.5%.
Key Company Trends Woolworths Looking For Growth In Sub-Saharan Africa: We expect South Africa’s leading retailers to spend more in wider Sub-Saharan Africa over the next few years. In many ways, they are perfectly placed to introduce and grow the organised retail concept at the mass market level. The likes of Shoprite, Pick ‘n’ Pay and Woolworths are considerably larger than anything in the wider region, where in many cases organised retail still contributes less than 5% to overall food retail sales (the bulk of shopping takes places at independent kiosks). This is compared to about 65% in South Africa.
AVI Boosted By Food Business: The food business of South African fast-moving consumer goods company AVI performed particularly well in the year to June 2011, with volumes from its coffee and tea businesses all growing well. Like rival Tiger Brands, from which AVI fended off a takeover bid in 2009, AVI is a diversified food and drink player with a range of established brands. Among the most notable is leading seafood processor I&J, which has promising export exposure. Food and drink accounted for about 75% of AVI’s business in the year to June by sales revenue contribution.
Key Risks To Outlook Rising Food Prices: Even though the strong rand has provided a cushion so far, the risk is that the strong currency means the effects of upward global moves in soft commodity prices have yet to be realised and could have a much greater impact in H211, perhaps if inflation outweighs disinflationary cushions provided by the rand. This would hit consumer spending hard given the high rate of unemployment.
Table of contents
Chapter 1 - BMI Industry View
Chapter 2 - SWOT Analysis
South Africa Food Industry SWOT
South Africa Drink Industry SWOT
South Africa Mass Grocery Retail Industry SWOT
Chapter 3 - Business Environment Ratings
BMI’s Core Global Industry Views
Table: BMI’s Core Views For The Food & Drink Industry
Macroeconomic Outlook
Table: Economic Activity
Chapter 4 - Industry Forecast Scenario
Consumer Outlook
Food
Food Consumption
Table: Food Consumption Indicators – Historical Data & Forecasts
Confectionery
Table: Confectionery Sales – Historical Data & Forecasts
Table: Confectionery
Prepared Food
Table: Canned Food Sales – Historical Data & Forecasts
Table: Meat
Table: Fish
Table: Frozen Fruit & Vegetables
Table: Jams & Jellies
Oils & Fats
Table: Oils & Fats
Dairy
Table: Dairy
Drinks
Alcoholic Drinks
Table: Alcohol Sales – Historical Data & Forecasts
Soft Drinks
Table: Soft Drinks Sales – Historical Data & Forecasts
Hot Drinks
Table: Hot Drinks Sales – Historical Data & Forecasts
Table: Hot Drinks
Mass Grocery Retail
Table: Mass Grocery Retail Sales By Format – Historical Data & Forecasts
Table: Grocery Retail Sales By Format &
Trade
Table: Trade Indicators – Historical Data & Forecasts
Chapter 5 - Food
Key Industry Trends And Developments
AVI Boosted By Food Business
Greater Food Price Inflation Remains A Risk
Market Overview
Agriculture
Organics
Production
Chapter 6 - Drink
Key Industry Trends And Developments
SABMiller FullYear Earnings Beat Estimates
SABMiller May Be Lining Up An Acquisition
Market Overview
Alcoholic Drinks
Soft Drinks
Chapter 7 - Mass Grocery Retail
Key Industry Trends And Developments
Woolworths Looking For Growth In SubSaharan Africa
Shoprite Plans Supermarkets In FY As Retail Landscape Changes
Tesco Could Follow Walmart Into Africa
Walmart Looking To Wider SubSaharan Africa Region
Market Overview
Table: Structure of South Africa’s Mass Grocery Retail Market – Sales Value by Format (US$bn)
Table: Structure of South Africa’s Mass Grocery Retail Market – Sales Value by Format (ZARbn)
Chapter 8 - Competitive Landscape
Consumer Share Price Analysis
Key Players
Table: Key Players in South Africa’s Food & Drink Sector
Table: Key Players in South Africa’s Mass Grocery Retail Industry
Chapter 9 - Company Analysis
Food
Illovo Sugar
Tiger Brands
Pioneer Foods
Drink
SABMiller
Distell
Mass Grocery Retail
Shoprite Group
Woolworths
Pick ‘n’ Pay
Chapter 10 - BMI Food & Drink Methodology
BMI Food & Drink Industry Glossary
Food & Drink
Mass Grocery Retail
BMI Food & Drink Forecasting And Sourcing
How We Generate Our Industry Forecasts
Sourcing
Related market research by market
South Africa (in Africa), Africa
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