Venezuela Food & Drink Report

Published 31 March 2015

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Venezuela Food & Drink Report

BMI View: In view of the substantial headwinds facing the Venezuelan economy, we have downgraded the country's real GDP to - 5 .6% in 2015 and - 2 . 9 % in 2016. Despite enormous natural resource wealth, the economy's outlook will continue to be dimmed by poor macroeconomic governance, high inflation, low oil prices and significant political uncertainty. Furthermore, we expect household consumption to continue to be constrained by high inflation, which has substantially eroded purchasing power (we forecast headline CPI price growth rising to 78 . 3 % year-on-year (y-o-y) in 2015), as well as government price controls, which create market inefficiencies that significantly reduce productivity (and, by extension, incomes).

Headline Industry Data (US dollar terms):

  • Per capita food consumption compound annual growth rate (CAGR) forecast 2014 to 2019 = 19.2%.

  • Alcoholic drink sales CAGR forecast 2014 to 2019 = +1.5%.

  • Soft drink sales CAGR forecast 2014 to 2019 = +1.6%.

  • Mass grocery retail sales CAGR forecast 2014 to 2019 = -18.4%.

Key Industry Trends And Developments

Chocolates El Rey Confident Despite Venezuela ' s Faltering Economy: Venezuela based chocolate producer Chocolates El Rey is riding the country's economic storm better than many and continues to innovate in a market that has seen many other producers fall by the wayside. Whilst the company is not immune from the foreign exchange and supply issues that plague much of the country's businesses, Chocolates El Rey sources the bulk of its raw materials domestically, which limits the potential for problems. In an interview for the PanAm Post in May 2015 the company's president, Jorge Redmond, said "in depressed economies people tend to consume products like ours, to make themselves happier" and "while other sectors have experienced considerable drops, especially due to rising prices, consumption of our chocolate has remained strong, even as chocolate prices go up."

Coca-Cola Femsa Hit By...

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 (Venezuela 2012-2019)
18
Confectionery
18
Table: Confectionery Value/Volume Sales, Production & Trade - Historical Data & Forecasts (Venezuela 2012-2019)
19
Drink
20
Alcoholic Drinks
20
Table: Alcoholic Drinks Value/Volume Sales, Production & Trade - Historical Data & Forecasts (Venezuela 2012-2019)
21
Soft Drinks
22
Table: Soft Drinks Sales, Production & Trade - Historical Data & Forecasts (Venezuela 2012-2019)
23
Hot Drinks
23
Table: Hot Drink Value/Volume Sales, Production & Trade - Historical Data & Forecasts (Venezuela 2012-2019)
24
Mass Grocery Retail
24
Table: Mass Grocery Retail Sales By Format - Historical Data & Forecasts (Venezuela 2012-2019)
25
Table: Sales Breakdown By Retail Format Type
25
Trade
26
Table: Trade Balance - Historical Data & Forecasts (Venezuela 2012-2019)
27
Macroeconomic Forecast
28
Economic Analysis
28
Industry Risk Reward Index
33
Latin America Risk/Reward Index
33
Table: Latin America Food & Drink Risk/Reward Index Q215
35
Table: Latin America Food & Drink Risk/Reward Sub-Factor Index Q215 (scores out of 10)
38
Venezuela Risk/Reward Index
39
Market Overview
40
Food
40
Food Production
40
Confectionery
41
Agriculture
41
Dairy
41
Meat
42
Seafood
42
Drink
43
Alcoholic Drinks
43
Soft Drinks
44
Hot Drinks
44
Mass Grocery Retail
45
Table: Structure Of Mass Grocery Retail Market By Estimated Number of Outlets (Venezuela 2006-2011)
46
Table: Mass Grocery Retail Sales By Format (Venezuela 2006-2011)
46
Table: Mass Grocery Retail Sales By Format (Venezuela 2006-2011)
47
Industry Trends And Developments
48
Food
48
Key Industry Trends And Developments
48
Drink
52
Key Industry Trends And Developments
52
Mass Grocery Retail
55
Key Industry Trends And Developments
55
Competitive Landscape
57
Table: Key Players In Venezuela's Food Sector
57
Table: Key Players In Venezuela's Drink Sector
58
Table: Key Players In Venezuela's Mass Grocery Retail Sector
59
Company Profile
61
Alimentos Heinz
61
Cargill Venezuela
63
Coca-Cola FEMSA
65
Diageo de Venezuela
68
Empresas Polar
70
Makro Venezuela
73
Mercal CA
75
Pernod Ricard Venezuela
77
Global Industry Overview
79
Table: TESCO - Selected Historical Financial Indicators
83
Table: Food and Drink Team's Core Views
87
Demographic Forecast
89
Demographic Outlook 2015
89
Table: Population Headline Indicators (Venezuela 1990-2025)
90
Table: Key Population Ratios (Venezuela 1990-2025)
90
Table: Urban/Rural Population & Life Expectancy (Venezuela 1990-2025)
91
Table: Population By Age Group (Venezuela 1990-2025)
91
Table: Population By Age Group % (Venezuela 1990-2025)
92
Glossary
94
Food & Drink
94
Mass Grocery Retail
94
Methodology
96
Industry Forecast Methodology
96
Sector-Specific Methodology
97
Sources
97
Risk/Reward Index Methodology
98
Table: Food & Drink Risk/Reward Index Indicators
99
Table: Weighting
100

The Venezuela 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 Venezuela 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 Venezuela.

Key Benefits

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