Brazil Food & Drink Report

Published 17 February 2015

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Brazil Food & Drink Report

We forecast real private consumption growth at 1.3% in Brazil, down from 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 poses significant headwinds to growth. Brazil is in the early stages of an economic policy shift with new Finance Minister Joaquim Levy set to reverse the fiscal deterioration of recent years and a central bank that is more committed to reining in inflation.

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

SABMiller To Export To Brazil : UK-based brewer SABMiller has re-added Brazil to its distribution network in the Latin American region. The company has entered a distribution licence agreement with Brazil-based Grupo Petropolis to return to the Brazilian market. The company, which stopped importing to Brazil in 2012 owing to a difficult exchange rate, will target the small but growing premium segment in the country.

China And Saudi Arabia Lift Brazilian Meat Bans : In December 2014, Brazil resumed exports of meat products to China and Saudi Arabia, according to Neri Geller, the country's minister of agriculture, livestock and supply. The move comes after Chinese authorities decided to remove their ban on Brazilian...

Table of Contents

BMI Industry View
7
SWOT
9
Food
9
Drink
11
Mass Grocery Retail
13
Industry Forecast
15
Consumer Outlook
15
Food
17
Food Consumption
17
Table: Food Consumption Indicators - Historical Data & Forecasts (Brazil 2011-2018)
18
Processed Food
18
Table: Pasta Volume Sales, Production & Trade - Historical Data & Forecasts (Brazil 2013-2018)
18
Table: Meat Volume Sales, Production & Trade - Historical Data & Forecast (Brazil 2013-2018)
19
Table: Jams & Jellies Volume Sales, Production & Trade - Historical Data & Forecast (Brazil 2013-2018)
19
Table: Frozen Fruit & Vegetables Volume Sales, Production & Trade - Historical Data & Forecasts (Brazil 2013-2018)
20
Dairy
20
Table: Dairy Volume Sales, Production & Trade - Historical Data & Forecasts (Brazil 2013-2018)
21
Confectionery
22
Table: Confectionery Value/Volume Sales, Production & Trade - Historical Data & Forecasts (Brazil 2011-2018)
23
Table: Sweet Biscuits Volume Sales, Production & Trade - Historical Data & Forecasts (Brazil 2013-2018)
25
Drink
26
Hot Drinks
26
Table: Hot Drink Value/Volume Sales, Production & Trade - Historical Data & Forecasts (Brazil 2013-2018)
27
Alcoholic Drinks
28
Table: Alcoholic Drinks Value/Volume Sales, Production & Trade - Historical Data & Forecasts (Brazil 2013-2018)
29
Soft Drinks
30
Table: Soft Drinks Sales, Production & Trade (Brazil 2013-2018)
31
Mass Grocery Retail
33
Table: Mass Grocery Retail Sales By Format - Historical Data & Forecasts (Brazil 2013-2018)
34
Table: Sales Breakdown By Retail Format Type (%)
35
Trade
36
Table: Trade Balance - Historical Data & Forecasts (Brazil 2013-2018)
36
Macroeconomic Forecast
37
Economic Analysis
37
Table: Economic Activity (Brazil 2009-2018)
41
Industry Risk Reward Index
42
Latin America Risk/Reward Index
42
Table: Latin America Food & Drink Risk/Reward Index Q115
44
Table: Latin America Food & Drink Risk/Reward Sub-Factor Index Q115 (scores out of 10)
46
Brazil Risk/Reward Index
47
Market Overview
49
Food
49
Prepared Food/Canned Food
49
Confectionery
49
Dairy
51
Meat
52
Poultry
53
Seafood
53
Drink
54
Hot Drinks
54
Soft Drinks
54
Alcoholic Drinks
55
Mass Grocery Retail
57
Table: Structure Of Mass Grocery Retail Market By Estimated Number of Outlets (Brazil 2005-2014)
59
Table: Mass Grocery Retail Sales By Format (Brazil 2005-2014)
59
Table: Mass Grocery Retail Sales By Format (Brazil 2005-2014)
60
Table: Average Annual Sales Value By Format - 2011
60
Industry Trends And Developments
61
Food
61
Table: BMI Business And Operation Risk Indices
65
Drink
69
Key Industry Trends And Developments
69
Mass Grocery Retail
74
Key Industry Trends And Developments
74
Competitive Landscape
77
Table: Key Players In Brazil's Food Sector
77
Table: Key Players In Brazil's Drink Sector
77
Table: Key Players In Brazil's Mass Grocery Retail Sector
78
Company Profile
79
JBS
79
Table: JBS Financial Results
88
Brasil Foods
89
Embotelladora Andina
91
AB Inbev
92
Table: AB InBev Selected Financials and Ratios
97
Table: AB InBev Selected Historical Financial Data
99
Brasil Kirin
100
Companhia Brasileira de Distribui--o
102
Walmart
104
Table: Walmart Financial Highlights
110
Carrefour
111
Table: Carrefour's Main Financial Highlights
116
Global Industry Overview
117
Table: DOLLAR GENERAL AND FAMILY DOLLAR HISTORIC QUARTERLY SAME-STORE SALES GROWTH (% CHANGE Y-O-Y)
121
Table: SELECT US BEVERAGE COMPANIES - HISTORIC EVA SPREAD
126
Table: Food and Drink Team's Core Views
127
Demographic Forecast
129
Table: Brazil's Population By Age Group, 1990-2020 ('000)
130
Table: Brazil's Population By Age Group, 1990-2020 (% of total)
131
Table: Brazil's Key Population Ratios, 1990-2020
132
Table: Brazil's Rural And Urban Population, 1990-2020
132
Glossary
133
Food & Drink
133
Mass Grocery Retail
133
Methodology
135
Industry Forecast Methodology
135
Sector-Specific Methodology
136
Sources
136
Risk/Reward Index Methodology
137
Table: Food & Drink Risk/Reward Index Indicators
138
Table: Weighting
139

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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Testimonials

'An essential, multi-faceted research tool. BMI’s thorough understanding of the major market players enables an informed – and informative – review of the sector’s actual performance, together with useful insights into current industry issues, which are topped-off with detailed and invaluable forecasts of industry and macroeconomic trends.’

Senior Research Analyst, ABC International Bank plc