Brazil Food & Drink Report

Published 11 May 2015

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Brazil Food & Drink Report

BMI View: We forecast real private consumption growth at 1.3% in Brazil, down from 1.5% in 2014 and which compares to 1.5% in 2014 and 2.6% in 2013, on the back of anaemic GDP growth. A less favourable external environment in light of an ongoing slowdown in Chinese growth, a poor domestic business environment and lack of export competitiveness pose significant headwinds to growth. Although we previously argued that Brazil was in the early stages of an economic policy shift with the appointment of an investor friendly Finance Minister Joaquim Levy, we expect investor pessimism to rise, on the back of the economic recession, high inflation, currency weaknesses and the potential for delay in fiscal reforms Food and retail consumption is likely to outperform among the country's private consumption items and we project generally strong sales growth for the main companies in the sector. We also believe that a moderation in input prices (grains) could help margins for these companies to recover in the coming months.

Headline Industry Data (local currency)

  • 2015 per capita food consumption = +7.4% y-o-y; forecast compound annual growth rate (CAGR) to 2019 = +7.1%.

  • 2015 alcoholic drink sales = +7.4% y-o-y; forecast CAGR to 2019 = +7.2%.

  • 2015 soft drink sales = +7.6% y-o-y; forecast CAGR to 2019= +7.8%.

  • 2015 mass grocery retail sales = +8.5% y-o-y; forecast CAGR to 2019 = +7.6%.

Key Company Trends

Lactalis Gains Approval For Brasil Foods Dairy Purchase: In April 2015, French dairy company Lactalis received approval to buy the dairy units of Brazilian food producer Brasil Foods (BRF) for USD594mn, reports Reuters. Antitrust regulator General Superintendence of Administrative Council for Economic Defense (CADE)'s has confirmed its approval for the deal. The acquisition will be carried out through Lactalis' Brazilian subsidiary Parmalat. Lactalis will buy BRF's dairy facilities in Brazil and its Batavo and Elege brands. Upon completion of the deal,...

BMI Industry View
7
SWOT
9
Food
9
Drink
11
Mass Grocery Retail
13
Industry Forecast
15
Consumer Outlook
15
Food
18
Food Consumption
18
Table: Food Consumption Indicators - Historical Data & Forecasts (Brazil 2012-2019)
19
Processed Food
19
Table: Pasta Volume Sales, Production & Trade - Historical Data & Forecasts (Brazil 2014-2019)
19
Table: Meat Volume Sales, Production & Trade - Historical Data & Forecast (Brazil 2014-2019)
20
Table: Jams & Jellies Volume Sales, Production & Trade - Historical Data & Forecast (Brazil 2014-2019)
20
Table: Frozen Fruit & Vegetables Volume Sales, Production & Trade - Historical Data & Forecasts (Brazil 2014-2019)
21
Dairy
21
Table: Dairy Volume Sales, Production & Trade - Historical Data & Forecasts (Brazil 2014-2019)
22
Confectionery
24
Table: Confectionery Value/Volume Sales, Production & Trade - Historical Data & Forecasts (Brazil 2012-2019)
25
Table: Sweet Biscuits Volume Sales, Production & Trade - Historical Data & Forecasts (Brazil 2014-2019)
26
Drink
27
Hot Drinks
27
Table: Hot Drink Value/Volume Sales, Production & Trade - Historical Data & Forecasts (Brazil 2014-2019)
28
Alcoholic Drinks
29
Table: Alcoholic Drinks Value/Volume Sales, Production & Trade - Historical Data & Forecasts (Brazil 2014-2019)
30
Soft Drinks
32
Table: Soft Drinks Sales, Production & Trade (Brazil 2014-2019)
32
Mass Grocery Retail
35
Table: Mass Grocery Retail Sales By Format - Historical Data & Forecasts (Brazil 2014-2019)
36
Table: Sales Breakdown By Retail Format Type (%)
36
Trade
37
Table: Trade Balance - Historical Data & Forecasts (Brazil 2014-2019)
37
Macroeconomic Forecast
38
Economic Analysis
38
Table: Economic Activity (Brazil 2010-2019)
43
Industry Risk Reward Index
44
Latin America Risk/Reward Index
44
Table: Latin America Food & Drink Risk/Reward Index Q315
46
Table: Latin America Food & Drink Risk/Reward Sub-Factor Index Q215 (scores out of 10)
49
Brazil Risk/Reward Index
50
Market Overview
51
Food
51
Prepared Food/Canned Food
51
Confectionery
51
Dairy
53
Meat
54
Poultry
55
Seafood
55
Drink
56
Hot Drinks
56
Soft Drinks
56
Alcoholic Drinks
57
Mass Grocery Retail
59
Table: Mass Grocery Retail Sales By Format (Brazil 2006-2015)
61
Table: Mass Grocery Retail Sales By Format (Brazil 2006-2015)
62
Industry Trends And Developments
63
Food
63
Drink
66
Key Industry Trends And Developments
66
Mass Grocery Retail
68
Key Industry Trends And Developments
68
Competitive Landscape
70
Table: Key Players In Brazil's Food Sector
70
Table: Key Players In Brazil's Drink Sector
70
Table: Key Players In Brazil's Mass Grocery Retail Sector
71
Company Profile
72
JBS
72
Table: JBS Financial Results
83
Brasil Foods
84
Embotelladora Andina
86
AB Inbev
87
Table: AB InBev Selected Financials and Ratios
92
Table: AB InBev Selected Historical Financial Data
94
Brasil Kirin
95
Companhia Brasileira de Distribui--o
97
Walmart
99
Table: Walmart Financial Highlights
107
Carrefour
108
Table: Carrefour's Main Financial Highlights
114
Global Industry Overview
115
Table: Food and Drink Core Views - Q115 Roundup
122
Demographic Forecast
124
Table: Population Headline Indicators (Brazil 1990-2025)
125
Table: Key Population Ratios (Brazil 1990-2025)
125
Table: Urban/Rural Population & Life Expectancy (Brazil 1990-2025)
126
Table: Population By Age Group (Brazil 1990-2025)
126
Table: Population By Age Group % (Brazil 1990-2025)
127
Glossary
129
Food & Drink
129
Mass Grocery Retail
129
Methodology
131
Industry Forecast Methodology
131
Sector-Specific Methodology
132
Sources
132
Risk/Reward Index Methodology
133
Table: Food & Drink Risk/Reward Index Indicators
134
Table: Weighting
135

The Brazil Food & Drink Report features BMI Research's market assessment and independent forecasts for food and drink expenditure, consumption, sales, and imports/exports and forecasts for the mass grocery retail sector. The report also includes analyses of major regulatory developments, the background macroeconomic outlook and competitive landscape comparing national and multinational companies by leading products and services, sales, investments, partners and expansion strategies.

BMI's Brazil Food & Drink Report provides industry professionals and strategists, sector analysts, business investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the food and drink industry and the mass grocery retail market in Brazil.

Key Benefits

  • Benchmark BMI's independent food and drink industry forecasts for Brazil to test other views - a key input for successful budgeting and strategic business planning in the Brazilian food and drink market.
  • Target business opportunities and risks in Brazil through our reviews of latest industry trends, regulatory changes and major deals, projects and investments.
  • Exploit latest competitive intelligence on your competitors, partners and clients via our Company Profiles (inc. SWOTs, KPIs and latest activity) and Competitive Landscape Tables.

Coverage

BMI Industry View

Summary of BMI’s key industry forecasts and views, covering food and drink manufacturing and consumption and the mass grocery retail market.

Industry SWOT Analysis

Analysis of the major strengths, weaknesses, opportunities and threats within the food, drink and mass grocery retail sectors and within the broader political, economic and business environment.

BMI’s Food and Drink Risk Reward Index

BMI’s Risk Reward Index provides investors (food and drink manufacturers and mass grocery retailers) looking for opportunities in the region with a clear country-comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic points. These provide indices of highest to lowest appeal to investors, with each position explained.

Food Forecasts

BMI’s food chapter is divided into sections such as meat, fish, confectionary, dairy and canned foods, and provides insight into each market’s food industry, centred on a forecast to end-2019 for the sector. The chapter includes the following elements:

  • Industry Forecast Scenario: Historical data series and a forecast to end-2019 for growth of key indicators within a market’s food industry. Indicators include food consumption, food consumption as % of GDP, canned food sales, confectionery sales and food and drink imports and exports, among others.
  • Industry Developments: A summary of corporate developments, including news on M&As, FDI, expansions, closures and financial results, in addition to analysis and explanation of the latest industry events and how these could influence further investment.
  • Market Overview: An overview of the structure of the market, introducing the key players and discussing underlying trends.

Drink Forecasts

Segmented the same way as BMI’s food chapter, the drink section provides insight into each market’s drink industry, centred on a forecast to end-2019 for the sector. Forecast indicators include alcoholic and soft drink sales by value, volume and sub-sector and tea and coffee sales, among others.

Mass Grocery Retail Forecasts

Segmented the same way as BMI’s food and drink chapters, the mass grocery retail section provides insight into each market’s grocery retail industry, centred on a forecast to end-2019 for the sector. Forecast indicators include mass grocery retail sales by format (including supermarkets, hypermarkets, convenience and discount stores) and a breakdown of the organised retail sector versus the traditional sector, among others.

Competitive Landscape

Illustration of the mass grocery retail and food and drink industries via rankings tables comparing revenues, number of outlets and number of employees. This chapter also includes data-rich, in-depth regional analysis of the market position, business strategies and investment potential of the region’s leading mass grocery retail and food and drink operators.

Company Profiles*

Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate company SWOT analyses. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.

Sources

The Food & Drink reports draw on an extensive network primary sources, such as multilateral organisations, government departments, industry associations, chambers and company reports.

*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.

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