Blog: Katy AskewIndia ascendant as outlook for global food sector dims

Katy Askew | 17 March 2016

Growth prospects for the global packaged food sector were negatively revised today (17 March) on faltering emerging market demand - but India looks increasingly set to be a bright spot for the industry.

Researchers at Euromonitor International cut their prediction for 2016 annual average growth in global packaged food sales to 2.3% from 2.5% this morning. In particular, the research group flagged concerns over emerging markets.

For some time, food multinationals have felt the negative impact in China's consumption slowdown. And it now appears a fresh threat has emerged for companies exposed to high growth but volatile emerging economies. Latin American markets in general – and Brazil in particular – are set to become increasingly problematic for food makers.

"Whilst China has previously been the cause of much distress, recent data clearly indicates that the wider Latin American market is going through a period of disruption, with Brazil’s downgrade being the most alarming event," the researchers wrote.

The likes of Nestle and Lactalis, which boast a strong Brazilian presence, could be in for a bumpy ride.

However, it is not all bad news on the emerging market front. Euromonitor suggests India is emerging from China's shadow as a market offering potential for packaged food makers. "India has lagged behind China in terms of economic performance as well as attractiveness for the food industry. However, with China’s current slowdown and considerable potential yet to be realised in India, some are starting to predict that it will be India, rather than China, driving future growth in the packaged food market.”

Here at just-food, the Indian food sector regularly crops up on our insight pages. While the country is notorious for its red tape and import tariffs, recent moves toward a more liberal trade policy point to a potentially brighter future for food importers. Another key challenge for international food makers with India in their sights is the need to adapt to local tastes. However, the growing importance of millennial consumers in the country has resulted in a rise in demand for international cuisine. New routes to market - such as e-commerce - and a growth in channels stocking high-end international foods are also positive notes.

Earlier this month, we published a six in-depth articles examining how to succeed in India. Click here to view the series in full.

Sectors: Emerging markets

Companies: Lactalis, Nestle

BLOG

Danone closes WhiteWave, who will acquire Stonyfield?

Danone completed its US$12.5bn acquisition of WhiteWave Foods this week. The move will roughly double Danone's presence in North America, where WhiteWave is a top four dairy player. ...

BLOG

Premier Foods pension news offers cheer but challenges remain

Premier Foods plc revealed today (28 March) it has secured a deal with its pension scheme trustees that will see the UK food maker reduce its pension burden....

BLOG

Another reshuffling of pack at Hain Celestial

Hain Celestial, under the scrutiny of the investment community in recent months and facing some challenges in its domestic market, has announced another shuffling of its management pack....

NEWS

Nestle organic growth slows but beats expectations - results data

Nestle saw weaker organic growth in the first quarter of 2017 than in the corresponding period a year earlier - but the KitKat maker's underlying sales still came in ahead of consensus analyst expecta...

BLOG

FrieslandCampina looking to sell final non-dairy asset

FrieslandCampina, which today served up higher profits but lower sales for 2016, is ready to offload the last non-dairy business owned by the Dutch cooperative giant....

just-food homepage



Forgot your password?