Chile Food and Drink Market Report Q1 2012

2011-12-28
Published : Dec-2011

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
Filed in: Food & Beverage, Food Service
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