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

Barilla puts sustainability centre stage

Barilla's 2016 results statement, published last week, makes interesting reading, not because of the Italian food group's commercial performance, but for the emphasis placed on sustainability achievem...

BLOG

UK M&A deal volumes slide in early months of 2017

Fresh data from Grant Thornton indicates the number of mergers and acquisitions in the UK food and drink sector fell to the lowest level for over two years in the first quarter of in 2017 - but the ac...

NEWS

Calbee confims Tmall launch date for Frugra

Japanese snack company Calbee is to start selling its breakfast granola brand Frugra to Chinese consumers on Tmall Global in August, ahead of the general retail launch...

BLOG

Food policy returns to focus in Westminster

Amid the political turmoil in the UK caused by the EU Referendum, the resignation of a Prime Minister, subsequent burning debates over the Brexit “divorce” settlement and now by the surprise announcem...

NEWS

Food market news of the week - JBS in row with Brazil's president, Grupo Bimbo enters India, Campbell invests in Chef'd

The week saw Brazil's President, Michel Temer, take aim at the country's largest meat processor, JBS, in a row over alleged corruption. Mexico's Grupo Bimbo, the world's largest bakery group, entered ...

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. ...

just-food homepage



Forgot your password?