Top 10 Food and Drinks Companies: Emerging opportunities, growth strategies and innovation in the leading players

Published: February 2009

Publisher: Business Insights

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Report description

The Top 10 Food and Drinks Companies
Emerging opportunities, growth strategies and innovation in the leading players

Report Overview

The global food and drinks market was worth $3,498bn in 2007, up 3.1% over 2006. The global food and drinks market is anticipated to grow at a CAGR of 3.2% during 2007–10 to reach $3,843bn in 2010. Increasing demand for healthy products coupled with rising disposable incomes in emerging economies is fueling demand for food and drink products. However, the rising price of raw materials such as animal feed, energy, and other commodities such as aluminium used in packaging, will increase the operating costs of players.

‘The Top 10 Food and Drinks Companies: Emerging opportunities, growth strategies and innovation in the leading players’ is a new report published by Business Insights that analyzes the innovation and growth strategies of the top 10 players in the food and drinks industry. This report identifies the product areas that the top 10 players are seeking to develop. It also examines the comparative strengths, weaknesses, opportunities and threats facing the world’s leading food and drinks companies.

Key Findings...

Rising consumption of food and drinks in emerging countries, elevated fuel prices, and climate change have contributed to the rise in raw material prices, which will adversely impact the operating margins of food and drinks companies.

The food and drinks industry is highly fragmented - the top 10 companies account for 12.9% of the global market share, based on 2007 sales.

Consolidation in the food and drinks industry will change its competitive landscape as JBS expected to appear in the top 10 players list in the industry.

Nestlé is the global leader with 2.6% market share in 2007, followed by Cargill with 2.5%.

Use this report to...

• Gain insight into the world’s leading food and drinks companies with this report’s ranking of the top 10 companies, detailing their financial performance and future prospects.
• Identify and target future growth areas from this report’s analysis of acquisitions and divestments made by leading food and drinks companies and their strategies for growth.
• Understand the key trends in the food and drinks market and the impact that they are expected to have on the top 10 players.
• Enhance your product development strategies by examing the leading food and drinks companies’ innovation and NPD strategies and recent product launches.
• Create more effective competitive strategies based on this report’s SWOT analyses of the top food and drinks companies.

Key issues...

Food safety. Rising concerns over the safety of Chinese food products has led its government to draft a five year food safety plan to place new controls on food and drug imports and exports.

Price fixing. Rising raw-material prices and emergence of huge agricultural conglomerates have pushed players to collude and form cartels to co-ordinate pricing for mutual benefit at the expense of buyers.

Growth in Asia Pacific markets. A rising middle class population and an improving macroeconomic environment in the Asian economies of India and China has increased consumption of food and drinks in these countries.

Rising raw material costs. Prices of raw materials such as barley, sorghum, oats, maize (coarse grains) and wheat have been rising sharply due to extensive use of these products in biofuel production, elevated fuel prices and climate change. This has had a negative impact on the operating margins of the food and drinks companies.

Your questions answered...

• What are the drivers and resistors of growth of food and drinks industry?
• Which regions offer the leading food and drinks companies the greatest growth opportunities?
• What are the key trends in the global food and drinks industry?
• Who are the top 20 players in the food and drinks industry?
• What is the market share of each of the global food and drinks leaders by company?
• How do the leading food and drinks companies compare in terms of financial performance and coverage by country and category?
• What are the key strategies of the leading food and drinks companies and how do these strategies drive revenue and market share?

The Top 10 Food and Drinks Companies
Executive Summary
Industry overview
Nestlé
Cargill
Unilever
PepsiCo
Kraft Foods
InBev
Mars
Coca-Cola
Tyson
SABMiller

Chapter 1 Introduction
What is this report about?
Methodology

Chapter 2 Industry overview
Summary
Introduction
Market overview
Market size and growth
Positioning and performance of top 10 companies
Consolidation in the food and drinks industry
Trends
Rising prices of raw materials
Shift to healthy food
Functional food and drinks
Organic foods
Expansion into Asian markets
India
China

Chapter 3 Nestlé
Summary
Company overview
Recent financial performance
Performance by business segments
Growth strategies
Aligning product portfolio towards healthier nutrition
Growth in emerging markets
Acquisitions and divestments
Innovation and NPD
SWOT analysis
Strengths
Global leader in infant nutrition
Strong R&D platform
Strong brand portfolio
Weaknesses
Product recall
Complex supply chain in India.
Opportunities
Extending foodservice to out of home customers
Growing bottled water market in Turkey
Expansion in Russia
Premiumization
Threats
Rising milk prices
Growing consumption of private label products

Chapter 4 Cargill
Summary
Company overview
Recent financial performance
Growth strategies
Focus on Asian markets
Focus on innovation
Acquisitions and divestments
Innovation and NPD
SWOT analysis
Strengths
Strong brand offerings in meat food category
Backward integration
Weaknesses
Weak performance in beef business
Operating as a private company
Opportunities
New product launches in the functional food category
Investment in innovation
Joint venture with Coca-Cola
Threats
Rising commodity prices

Chapter 5 Unilever
Summary
Company overview
Recent financial performance
Performance by business segments
Growth strategies
Attaining operational efficiency through restructuring
Focusing resources on high growth areas
Acquisitions and divestments
Innovation and NPD
SWOT analysis
Strengths
Strong portfolio of brands
Strong R&D platform
Global scale and reach
Weaknesses
Declining cash from operations
Opportunities
Growth in developed and emerging markets
Extending partnership with PepsiCo
Agreement with Starbucks
Threats
Rising commodity prices
Competition from private label

Chapter 6 PepsiCo
Summary
Company overview
Recent financial performance
Performance by business segments
Growth strategies
Transforming its beverage portfolio
Growth through partnerships
Acquisitions and divestments
Innovation and NPD
SWOT analysis
Strengths
Strong brand portfolio
Larger product range
Strong liquidity position
Weaknesses
Dependence on North American operations
Rising debt burden
Opportunities
Focus on healthy offerings
Expanding presence in emerging markets
Threats
Intense competition
Decline in demand for carbonated drinks in the US market

Chapter 7 Kraft Foods
Summary
Company overview
Recent financial performance
Performance by business segments
Growth strategies
Restructuring program
Reframing food product categories
Aligning product portfolio to consumer trends across markets
Shift to direct sales model in developed markets
Re-engineer cost structure
Acquisitions and divestments
Innovation and NPD
SWOT analysis
Strengths
Strong brand portfolio
Significant international presence
Weaknesses
Declining profitability
Rising debt obligations
Opportunities
Agreement with Probi
Investment in coffee business
Acquisition of Groupe Danone
Threats
Private Label
Legal proceedings

Chapter 8 InBev
Summary
Company overview
Recent financial performance
Performance by business segments
Growth strategies
Attain operational efficiency through cost management
Investing in capabilities development
Acquisitions and divestments
Innovation and NPD
SWOT analysis
Strengths
Strong brand portfolio
Geographically diversified operations
Improved financial performance
Weaknesses
Weak performance in Western Europe
Opportunities
Expansion in emerging markets
Acquisition of Anheuser-Busch
Threats
Rising raw material costs
Competition from wine

Chapter 9 Mars
Summary
Company overview
Recent financial performance
Performance by business segments
Growth strategies
Focus on Eastern Europe emerging markets
Acquisitions and divestments
Innovation and NPD
SWOT analysis
Strengths
Strong presence in the confectionery industry
Larger product portfolio than competitors
Weaknesses
Negative publicity
Opportunities
Shift towards healthy and nutritious snack food in Europe
Wrigley’s acquisition boosting presence in China
Investment in Uncle Ben’s plant
Threats
Growth of private label confectionery brands in the US

Chapter 10 Coca-Cola
Summary
Company overview
Recent financial performance
Performance by business segments
Growth strategies
Gaining leadership in sparkling beverages
Expanding still beverages portfolio
Focus on innovation
Acquisitions and divestments
Innovation and NPD
Innovation in packaging:
Innovation in formulation:
SWOT analysis
Strengths
Strong growth in unit case volume
Large scale of operations
Weaknesses
Declining performance in North America
Less diversified product portfolio
Opportunities
Extending geographic presence of products
Expansion in Chinese beverage market
Threats
Dependence on bottling partners

Chapter 11 Tyson
Summary
Company overview
Recent financial performance
Performance by business segments
Growth strategies
Focus on creating innovative and value-added products
Maximize margins through operational efficiency
Build multinational enterprise
Acquisitions and divestments
Innovation and NPD
SWOT analysis
Strengths
Significant market share in the US
Strong R&D platform
Weaknesses
Legal proceedings
Weak international presence
Opportunities
Commercializing poultry litter and animal by-products
Expanding poultry operations in international markets
Threats
Rising costs of feed grains
Slowdown in the US poultry industry

Chapter 12 SABMiller
Summary
Company overview
Recent financial performance
Performance by business segments
Growth strategies
Developing strong, relevant brand portfolios in the local market
Attaining operational efficiency
Acquisitions and divestments
Innovation and NPD
SWOT analysis
Strengths
Significant market share across geographies
Depth in product portfolio
Weaknesses
Declining performance in South Africa
Weaker presence in markets outside North America
Opportunities
Expansion in emerging markets
Joint venture with Molson Coors Brewing
Threats
Consolidation in the beer industry

Chapter 13 11–20 companies
Groupe Danone
Company overview
Recent financial performance
Innovation and NPD
Heineken
Company overview
Recent financial performance
Innovation and NPD
JBS
Company overview
Recent financial performance
Innovation and NPD
Kirin Brewery
Company overview
Recent financial performance
Innovation and NPD
Diageo
Company overview
Recent financial performance
Innovation and NPD
Associated British Foods (ABF)
Company overview
Recent financial performance
Innovation and NPD
Groupe Lactalis
Company overview
Recent financial performance
Innovation and NPD
Asahi Breweries
Company overview
Recent financial performance
Innovation and NPD
General Mills
Company overview
Recent financial performance
Innovation and NPD
Sara Lee
Company overview
Recent financial performance
Innovation and NPD

Chapter 14 Appendix
Glossary
Index

List of Figures
Figure 2.1: Global food and drinks market size ($bn), 2006-10
Figure 2.2: Top 10 food and drinks companies market share, 2007
Figure 2.3: Top 10 food and drinks companies growth, 2007
Figure 3.4: Nestlé financial performance ($m), 2003–07
Figure 3.5: Nestlé’s recent product launches, by category, 2005–08
Figure 3.6: Nestlé’s innovative product launches, 2008
Figure 3.7: Nestlé SWOT analysis
Figure 4.8: Cargill financial performance ($m), 2004-08
Figure 4.9: Cargill’s recent product launches, by category, 2005–08
Figure 4.10: Simply Done Ready-to-Cook Turkey
Figure 4.11: Cargill SWOT analysis
Figure 5.12: Unilever financial performance ($m), 2004–07
Figure 5.13 Unilever’s recent product launches, by category, 2005–08
Figure 5.14 Unilever’s innovative product launches, 2008
Figure 5.15: Unilever SWOT analysis
Figure 6.16: PepsiCo financial performance ($m), 2003–07
Figure 6.17: PepsiCo’s recent product launches, by category, 2005–08
Figure 6.18: PepsiCo’s innovative product launches, 2008
Figure 6.19: PepsiCo SWOT analysis
Figure 7.20: Kraft Foods financial performance ($m), 2003–07
Figure 7.21: Kraft Foods’ recent product launches, by category, 2005-08
Figure 7.22: Kraft Foods’ innovative product launches, 2008
Figure 7.23: Kraft Foods SWOT analysis
Figure 8.24: InBev financial performance ($m), 2003–07
Figure 8.25: InBev’s innovative product launches, 2008
Figure 8.26: InBev SWOT analysis
Figure 9.27: Mars’s recent product launches, by category, 2005–08
Figure 9.28: Mars’s innovative product launches, 2008
Figure 9.29: Mars SWOT analysis
Figure 10.30: Coca-Cola financial performance ($m), 2003–07
Figure 10.31: Coca-Cola’s recent product launches, by category, 2005–08
Figure 10.32: Coca-Cola’s innovative product launches, 2008
Figure 10.33: Coca-Cola SWOT analysis
Figure 11.34: Tyson financial performance ($m), 2003–07
Figure 11.35: Tyson’s recent product launches, by category, 2005–08
Figure 11.36: Tyson’s innovative product launches, 2008
Figure 11.37: Tyson SWOT analysis
Figure 12.38: SABMiller financial performance ($m), 2004–08
Figure 12.39: SABMiller’s innovative product launches, 2007
Figure 12.40: SABMiller SWOT analysis
Figure 13.41: Groupe Danone financial performance ($m), 2003–07
Figure 13.42: Groupe Danone’s innovative product launches, 2008
Figure 13.43: Heineken financial performance ($m), 2004–07
Figure 13.44: Heineken’s innovative product launches, 2008
Figure 13.45: Kirin Brewery financial performance ($m), 2003–07
Figure 13.46: Kirin Brewery’s innovative product launches, 2008
Figure 13.47: Diageo financial performance ($m), 2005–08
Figure 13.48: Diageo’s innovative product launches, 2008
Figure 13.49: ABF financial performance ($m), 2003–07
Figure 13.50: Asahi financial performance ($m), 2003–07
Figure 13.51: Asahi’s innovative product launches, 2008
Figure 13.52: General Mills financial performance ($m), 2004–08
Figure 13.53: General Mills’ innovative product launches, 2008
Figure 13.54: Sara Lee financial performance ($m), 2004–08
Figure 13.55: Sara Lee innovative product launches, 2008

List of Tables
Table 2.1: Global food and drinks market size ($bn), 2006-10
Table 2.2: Top 10 food and drinks companies turnover ($m), 2003–07
Table 2.3: Major M&A deals 2007–08
Table 3.4: Nestlé snapshot
Table 3.5: Nestlé financial performance ($m), 2003–07
Table 3.6: Nestlé business segment performance ($m), 2007
Table 3.7: Nestlé’s key brands
Table 4.8: Cargill snapshot
Table 4.9: Cargill financial performance ($m), 2004–08
Table 4.10: Cargill’s key brands
Table 5.11: Unilever snapshot
Table 5.12: Unilever financial performance ($m), 2004–07
Table 5.13: Unilever business segment performance ($m), 2007
Table 5.14: Unilever’s key brands
Table 6.15: PepsiCo snapshot
Table 6.16: PepsiCo financial performance ($m), 2003–07
Table 6.17: PepsiCo business segment performance ($m), 2007
Table 6.18: PepsiCo’s key brands
Table 7.19: Kraft Foods snapshot
Table 7.20: Kraft Foods financial performance ($m), 2003–07
Table 7.21: Kraft Foods business segment performance ($m), 2007
Table 7.22: Kraft Foods’ key brands
Table 8.23: InBev snapshot
Table 8.24: InBev financial performance ($m), 2003–07
Table 8.25: InBev business segment performance ($m), 2007
Table 8.26: InBev’s key brands
Table 9.27: Mars snapshot
Table 9.28: Mars business segment performance ($m), 2007
Table 9.29: Mars’s key brands
Table 10.30: Coca-Cola snapshot
Table 10.31: Coca-Cola financial performance ($m), 2003–07
Table 10.32: Coca-Cola business segment performance ($m), 2007
Table 10.33: Coca-Cola’s key brands
Table 11.34: Tyson snapshot
Table 11.35: Tyson financial performance ($m), 2003–07
Table 11.36: Tyson business segment performance ($m), 2007
Table 11.37: Tyson’s key brands
Table 12.38: SABMiller snapshot
Table 12.39: SABMiller financial performance ($m), 2004–08
Table 12.40: SABMiller business segment performance ($m), 2008
Table 12.41: SABMiller’s key brands
Table 13.42: Groupe Danone snapshot
Table 13.43: Groupe Danone financial performance ($m), 2003–07
Table 13.44: Heineken snapshot
Table 13.45: Heineken financial performance ($m), 2004–07
Table 13.46: JBS snapshot
Table 13.47: JBS financial performance ($m), 2006–07
Table 13.48: Kirin Brewery snapshot
Table 13.49: Kirin Brewery financial performance ($m), 2003–07
Table 13.50: Diageo snapshot
Table 13.51: Diageo financial performance ($m), 2005–08
Table 13.52: ABF snapshot
Table 13.53: ABF financial performance ($m), 2003–07
Table 13.54: Groupe Lactalis snapshot
Table 13.55: Asahi snapshot
Table 13.56: Asahi financial performance ($m), 2003–07
Table 13.57: General Mills snapshot
Table 13.58: General Mills financial performance ($m), 2004–08
Table 13.59: Sara Lee snapshot
Table 13.60: Sara Lee financial performance ($m), 2004–08