Ukraine Food and Drink Report Q4 2012
Report description
In our view, the debt hangover from a credit boom and the possibility of higher inflation could be threats to consumer spending over the rest of 2012. Additionally, Ukraine’s GDP per capita is expected to remain one of the lowest in Europe over the decade ahead. Given the pace of deceleration and our expectations for a weaker H212, we are revising down our 2012 real GDP forecast for Ukraine, as a result of a downwards adjustment to the country’s export growth forecast. While there is still enormous unrealised potential in terms of political reform and economic growth, without institutional and economic reform, Ukraine’s current economic growth model will prove unsustainable over the coming 10 years. Headline Industry Data (local currency)
? 2012 per capita food consumption = +7.9%; five-year forecast to 2016 = +51.6% ? 2012 alcoholic drinks value sales = +12.6%; five-year forecast to 2016 = +64.4% ? 2012 soft drinks value sales = +12.6%; five-year forecast to 2016 = +61.4% ? 2012 mass grocery retail = +10.7%; five-year forecast to 2016 = +69.4%Key Company Trends Ukraine Wine Market Demonstrates Potential: In August 2012, Australian wine group Accolade Wines announced the launch of its Hardy’s wine brand in the Ukrainian market. The firm confirmed that local producer Olimp will act as distributor for the brand, and that initially five varieties of wine will be made available. The Ukrainian wine market is set on a strong growth trajectory. Alcohol consumption in the country is historically dominated by spirits, and while we expected continued momentum in this sector, we see an even greater opportunity within both wine and beer. In 2011, consumption of wine stood at around 10.1 litres per capita, but over the next five years we expect per capita consumption to increase by 27% to reach 12.8 litres.
Prevalence Of Informal Retailing Leaves Room For Formalisation: There is no question that the past few years have been difficult, but Ukraine in summer 2012 has started to look better on the consumer side, with private household expenditure up strongly since the start of 2011. We still believe that organised retail will begin offering up good opportunities in the not too distant future. As independent stores make up the bulk of total food spending in Ukraine, this suggests substantial room for growth given that Ukrainian organised retail has not been formalising as quickly as many other economies in Central and Eastern Europe. Ukraine Food & Drink Report Q4 2012 © Business Monitor International Ltd Page 8 Key Risks To Outlook
Overly Optimistic Government Growth Forecasts: We remain particularly cautious concerning Ukraine’s fiscal situation due to the optimistic growth forecasts upon which the budget is predicated. The government expects real GDP growth of 3.7% this year, and has planned the 2013 budget around expected growth of 4.5%. However, economic activity is slowing in Ukraine, and as a result, a revenue undershoot remains highly probable, in our opinion. We also note that inflation has come in significantly lower than government forecasts, weakening government revenues as a result. We therefore believe economic activity will significantly undershoot government estimates and are forecasting real GDP growth of 2.0% in 2012 and 0.9% in 2013.
Table of contents
Chapter 1 - BMI Industry View
Chapter 2 - SWOT Analysis
Ukraine Food Industry SWOT
Ukraine Drink Industry SWOT
Ukraine Mass Grocery Retail Industry SWOT
Chapter 3 - Business Environment
BMI’s Core Global Industry Views
Table: Core Views
CEE Food & Drink Risk/Reward Ratings
Table: Food & Drink Risk/Reward Sub-Factor Ratings, Q (scores out of )
Table: CEE Food & Drink Risk/Reward Ratings, Q
Ukraine’s Food & Drink Business Environment Ratings
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 Value/Volume Sales – Historical Data & Forecasts, -
Prepared Food
Table: Meat, -
Table: Jams & Jellies, -
Table: Pasta, -
Table: Snack Foods, -
Dairy
Table: Dairy, -
Drink
Alcoholic Drinks
Table: Alcoholic Drinks Value/Volume Sales – Historical Data & Forecasts, -
Soft Drinks
Table: Soft Drinks Value/Volume Sales – Historical Data & Forecasts, -
Hot Drinks
Table: Hot Drinks Value Sales – Historical Data & Forecasts, -
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
Cheese Dispute Benefits Danone
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Nestlé Ukraine Outperforms Rest Of Europe
Agriculture Continues To Attract Interest
Government Calls For Greater Investment Into Agriculture
Dairy Industry Consolidates And Changes Direction
Market Overview
Food Processing
Key Players
Confectionery
Trade
Agriculture
Chapter 6 - Drink
Key Industry Trends And Developments
Ukraine Wine Market Demonstrates Potential
Budweiser Launched In Ukraine
Anadolu Efes Looks For Acquisitions
Oasis CIS Seeks Expansion Through Acquisition
The Beer Industry Seems To Be Growing Against The Odds
Ukrainian Spirits Majors Targeting Russia
Market Overview
Alcoholic Drinks
Beer
Wine
Spirits
Soft Drinks
Hot Drinks
Chapter 7 - Mass Grocery Retail
Key Industry Trends And Developments
Prevalence Of Informal Retailing Leaves Room For Formalisation
Ukraine Consumers Turn To MGR Outlets
Retail Space Expanding Despite Economic Adversity
Investment Into Hypermarkets Continues
Supermarket Expansion Also On Cards
Market Overview
Leading Retailers
Table: Mass Grocery Retail Market By Number Of Outlets, -
Table: Average Annual Sales By Outlet Type,
Table: Mass Grocery Retail Sales By Format , -
Chapter 8 - Competitive Landscape
Table: Key Players In Ukraine’s Food Sector
Table: Key Players In Ukraine’s Drink Sector
Table: Key Players in Ukraine’s Mass Grocery Retail Industry
Chapter 9 - Company Monitor
Food
Ukrproduct
Myronivsky Hliboproduct (MHP)
Danone-Unimilk (Halakton)
Roshen
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Konti
Astarta-Kyiv
Drink
Sun InBev Ukraine
Slavutich Carlsberg (Baltic Beverages Holding Ukraine)
Obolon
Odessa Champagne Factory
Nemiroff
Mass Grocery Retail
Fozzy Group
Billa
ATB Market
Auchan
Chapter 10 - Country Snapshot
Table: Ukraine’s Population By Age Group, - (‘)
Table: Ukraine’s Population By Age Group, - (% of total)
Table: Ukraine’s Key Population Ratios, -
Table: Ukraine’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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