Chile’s consumer sector is more developed than many in Latin America leaving less room for growth. A population of only 17mn also places downwards pressure on our forecasts. On the plus side, the food and drink market is still seen as relatively fragmented, leaving opportunities for companies to come in and be successful. The penetration of organised retailing is also high, smoothing the way for producers to get their products into the hands of consumers. Chile’s regulatory environment is viewed favourably, with the country committed to free trade and investment while we also have a generally positive outlook for the country’s economy, with the country well placed to weather the global economic headwinds.
Chile Food and Drink Market Report Q1 2012
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Industry Data
2012 per capita food consumption (local currency) = +8.5 %; forecast to 2016 = +34.9%
2012 alcoholic drink sales (litres) = +4.8%; forecast to 2016 = +19.2%
2012 soft drink sales (litres) = +4.8% ; forecast to 2015 = +19.7%
2012 mass grocery retail sales (local currency) = +8.0%; forecast to 2015 = +34.3%
Key Company Trends
Rising Exports And Domestic Demand Prompt Chilean Confectionery Investment – In October 2011, Argentine food producer Arcor announced plans to invest US$40mn in Chile to build a new confectionery factory. The investment will be made through its Chilean confectionery subsidiary Dos en Uno. Arcor revealed the facility is intended to eventually replace its plant in Santiago city centre, in an effort to increase profit margins. The facility will produce confectionery for both the domestic market and for export, underlining Chile’s strong position as a hub for producing food for the wider region.
Walmart’s Entry Leads To Rapid Consolidation In Chilean Retail – In September 2011, Chile’s third largest supermarket operator Grupo SMU has announced it is to acquire smaller rival Supermercados del Sur. Full terms of the deal have not been disclosed, although SMU did reveal it included a capital injection of US$215mn. The move comes three years after Walmart entered the market and can be seen as a sign of the competitive pressure that the firm, with its low-priced business model, has brought to bear on the market. We expect further consolidation within the sector as local operators look to build the economies of scale needed to compete with the world’s largest retailer.
Key Risks To Outlook
Market maturity – A limiting factor on our growth forecasts is the growing maturity of the food, drink and retail sectors; for example, Chileans are already among the highest consumers of soft drinks in the world. In addition, the organised retail sector already accounts for around 62% of all grocery sales (compared to 27% in neighbouring Peru) and, with expansion opportunities limited, supermarket sales in real terms have advanced by only around 30% since 2005. This figure compares unfavourably to other countries in the region.
Growth remains tied to Chinese prospects – With the Chilean economy still highly dependent on the export of minerals to China, any slowdown in this market would have significant negative implications for Chilean economic growth and consumption.
- BMI Industry View
- SWOT Analysis
- Chile Food Industry SWOT
- Chile Drink Industry SWOT
- Chile Mass Grocery Retail Industry SWOT
- Business Environment
- BMI’s Core Global Industry Views
- Table: Food Prices, 2010 And 2011
- Table: BMI’s Core Views For The Food & Drink Industry
- Latin American Sector Focus
- Brewing Will Continue To Consolidate Around Heineken, SABMiller and ABI
- Latin America Risk/Reward Ratings
- Table: Q112 Food & Drink Ratings – Brazil
- Table: Latin America Food & Drink Risk/Reward Ratings Q112
- Regional Focus – Latin American Brewing Will Continue To Consolidate Around Heineken, SABMiller and ABI
- Chile’s Risk/Reward Rating
- Macroeconomic Outlook
- Table: Chile – Economic Activity
- Industry Forecast Scenario
- Consumer Outlook
- Food
- Total Food Consumption
- Table: Chile Food Consumption Indicators – Historical Data & Forecasts
- Prepared Food
- Table: Canned Food Value/Volume Sales – Historical Data & Forecasts
- Table: Frozen Fruit And Vegetables
- Oils & Fats
- Table: Oils And Fats
- Dairy
- Table: Dairy
- Confectionery
- Table: Confectionery Value/Volume Sales – Historical Data & Forecasts
- Table: Confectionery
- Baked Goods
- Table: Snack Foods
- Pasta
- Table: Pasta
- Drink
- Hot Drinks
- Table: Hot Drinks
- Soft Drinks
- Table: Soft Drink Value/Volume Sales – Historical Data & Forecasts
- Alcoholic Drinks
- Table: Alcoholic Drinks
- Trade
- Table: Food & Drink Trade Balance – Historical Data & Forecasts
- Mass Grocery Retail
- Table: Chile Mass Grocery Retail – Value Sales by Format – Historical Data & Forecasts
- Food
- Key Industry Trends And Developments
- Rising Exports And Domestic Demand Prompt Chilean Confectionery Investment
- Fonterra And Nestlé’s Plan For Chilean Merger Derailed By Opposition
- Chile Positioned As Regional Hub
- Foreign Direct Investment
- Focus On Healthy Food
- Market Overview
- Overview of Food Sector
- Canned Food/Prepared Food
- Confectionery
- Dairy
- Meat
- Aquaculture
- Drink
- Key Industry Trends And Developments
- Concha y Toro Sees Profits Hit By Currency Movements; Highlights Need For Expansion
- Concha y Toro Eyes Growing Domestic Beer Market
- Market Overview
- Soft Drinks
- Alcoholic Drinks
- Mass Grocery Retail
- Key Industry Trends And Developments
- Walmart’s Entry Leads To Rapid Consolidation In Chilean Retail
- Chilean Retailers Investing In Peru To Take Advantage Of Burgeoning Consumer Demand
- Walmart Expansion Taking Advantage Of Rising Chilean Affluence
- Cencosud Trading At A Discount To Latin American Peers
- Falabella Accelerates Investment For Regional Growth Potential
- Supermercados del Sur Considers IPO
- International Expansion
- Market Overview
- Table: Structure of Chile’s Mass Grocery Retail Market by Estimated Number of Outlets
- Table: Structure of Chile’s Mass Grocery Retail Market – Sales by Format (US$bn)
- Table: Structure of Chile’s Mass Grocery Retail Market – Sales by Format (CHLbn)
- Table: Average Annual Sales Value by Format – 2009
- Competitive Landscape
- Consumer Shares Analysis
- Key Players
- Table: Key Players in Chile’s Food Sector
- Table: Key Players in Chile’s Drink Sector
- Table: Key Players in Chile’s Mass Grocery Retail Sector
- Company Profiles
- Food
- Empresas Carozzi
- Nestlé Chile SA
- Soprole
- Drink
- Concha y Toro
- Embotelladora Andina
- Compañia Cervecerias Unidas (CCU)
- Mass Grocery Retail
- Distribución y Servicio (Walmart)
- Cencosud SA
- Risk/Reward Ratings Methodology
- Table: Rewards
- Table: Risks
- Weighting
- Table: Weighting
- BMI Food & Drink Industry Glossary
- Food & Drink
- Mass Grocery Retail
- BMI Food & Drink Forecasting & Sourcing
- How We Generate Our Industry Forecasts
- Sourcing