Latvia Food & Drink Report

Published 02 December 2014

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Latvia Food & Drink Report

BMI View:   We expect that household consumption will remain stable over 2015, contributing 1. 7 percentage points to headline real GDP,. This will be supported by low inflation and an improving labour market. However, the deterioration in EU-Russia relations is adversely affecting Latvia's economic growth outlook. Western sanctions on Russia have led to capital flight and sharp depreciation of the rouble against the dollar, which has markedly worsened the growth outlook for Russia (which remains one of Latvia's most important trading partners). Russia's retaliatory embargo on EU agricultural goods will also leave Latvia among the worst affected, as Latvian agricultural exports to Russia account for almost 3% of total exports.

Headline Industry Data (local currency)

  • 2014 per capita food consumption: +2.8%; forecast compound annual growth rate (CAGR) 2013 to 2018: +4.0%

  • 2014 alcoholic drinks sales: -0.6%; forecast CAGR 2013 to 2018: 13.0%

  • 2014 soft drinks sales: +2.9%; forecast CAGR 2013 to 2018: +4.0%

  • 2014 mass grocery retail sales: +15.0%; forecast CAGR 2013 to 2018: +5.9%

Key Company Trends

Orkla Expands Baltic Operations Through NP Foods Acquisition : In summer 2014, Norwegian food company Orkla announced the acquisition of Latvia-based NP Foods Group, including the Laima confectionery brand, Staburadze cakes and Gutta soft drinks. The financial details of the transaction were not disclosed. Orkla said the acquisition will 'nearly double the scale' of its operations in the Baltic and make it 'one of the largest consumer goods companies in the region' Peter Ruzicka, CEO of Orkla, said: 'The acquisition of Laima and other well-established brands is strategically important to Orkla and will significantly strengthen our foothold in the region.'

SPI Group Creates Baltic Holding Company for Further Expansion : In autumn 2014, SPI Group announced plans to create a holding company to manage its 'ambitious development plans' in the Baltics. The...

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 (Latvia 2011-2018)
18
Confectionery
18
Table: Confectionery Value/Volume Sales, Production & Trade - Historical Data & Forecasts (Latvia 2011-2018)
19
Canned Food
19
Meat
20
Table: Meat Volume Sales, Production & Trade - Historical Data & Forecast (Latvia 2013-2018)
20
Snack Food
20
Table: Sweet Biscuits Volume Sales, Production & Trade - Historical Data & Forecasts (Latvia 2013-2018)
21
Table: Jams & Jellies Volume Sales, Production & Trade - Historical Data & Forecast (Latvia 2013-2018)
21
Pasta
21
Table: Pasta Volume Sales, Production & Trade - Historical Data & Forecasts (Latvia 2013-2018)
22
Dairy
22
Table: Dairy Volume Sales, Production & Trade - Historical Data & Forecasts (Latvia 2013-2018)
23
Drink
24
Alcoholic Drinks
24
Table: Alcoholic Drinks Value/Volume Sales, Production & Trade - Historical Data & Forecasts (Latvia 2013-2018)
25
Soft Drinks
26
Table: Soft Drinks Sales, Production & Trade (Latvia 2013-2018)
27
Hot Drinks
28
Table: Hot Drink Value/Volume Sales, Production & Trade - Historical Data & Forecasts (Latvia 2013-2018)
29
Mass Grocery Retail
29
Table: Food Consumption Indicators - Historical Data & Forecasts (Latvia 2011-2018)
30
Table: Grocery Retail Sales By Format
30
Trade
31
Table: Trade Balance - Historical Data & Forecasts (Latvia 2013-2018)
31
Macroeconomic Forecast
32
Economic Analysis
32
Macro Outlook
32
Real GDP By Expenditure Breakdown
33
Risks To Outlook
37
Table: Economic Activity (Latvia 2009-2018)
37
Industry Risk Reward Index
38
Central And Eastern Europe - Risk/Reward Index
38
Table: Central & Eastern Europe Food & Drink Risk/Reward Index Q115
39
Latvia Risk/Reward Index
43
Market Overview
45
Food
45
Food Consumption
45
Food Processing
45
Leading Food Producers
46
Confectionery
47
Trade
47
Agriculture
48
Drink
49
Alcoholic Drinks
49
Soft Drinks
53
Hot Drinks
55
Mass Grocery Retail
56
Table: Structure Of Mass Grocery Retail Market By Estimated Number of Outlets (Latvia 2005-2014)
58
Table: Mass Grocery Retail Sales By Format (Latvia 2005-2014)
58
Table: Mass Grocery Retail Sales By Format (Latvia 2005-2014)
58
Table: Average Annual Sales Per Outlet By Format, 2012
59
Industry Trends And Developments
60
Food
60
Drink
62
Mass Grocery Retail
63
Competitive Landscape
65
Table: Key Players In Latvia's Food & Drink Sector
65
Table: Key Players In Latvia's Mass Grocery Retail Sector
66
Company Profile
68
Paulig Baltic
68
Laima
70
Margota
72
Rigas Piena Kombinats
74
Livu Alus
77
Aldaris
79
Cesu Alus
82
Cido Grupa
84
Latvijas balzams
86
Maxima LT
88
Rimi Baltic
90
Elvi
92
Global Industry Overview
94
Table: Dollar General And Family Dollar Historic Quarterly Same-Store Sales Growth (% Change Y-O-Y)
98
Table: Selected US And Global Spirits Companies - Historical Financial Indicators
101
Table: Select US Beverage Companies - Historic Eva Spread
103
Table: Food and Drink Team's Core Views
104
Demographic Forecast
106
Table: Population Headline Indicators (Latvia 1990-2025)
107
Table: Key Population Ratios (Latvia 1990-2025)
107
Table: Urban/Rural Population & Life Expectancy (Latvia 1990-2025)
108
Table: Population By Age Group (Latvia 1990-2025)
108
Table: Population By Age Group % (Latvia 1990-2025)
109
Glossary
111
Food & Drink
111
Mass Grocery Retail
111
Methodology
113
Industry Forecast Methodology
113
Sector-Specific Methodology
114
Sources
114
Risk/Reward Index Methodology
115
Table: Food & Drink Risk/Reward Index Indicators
116
Table: Weighting
117

The Latvia 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 Latvia 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 Latvia.

Key Benefits

  • Benchmark BMI's independent food and drink industry forecasts for Latvia to test other views - a key input for successful budgeting and strategic business planning in the Latvian food and drink market.
  • Target business opportunities and risks in Latvia 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