Business Monitor International


Philippines Food & Drink Report

Published 20 December 2013

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Philippines Food & Drink Report

Executive Summary

BMI View : While the Philippines' economy continues to expand at a healthy rate and despite its expanding base of young consumers, we believe that the country offers limited potential in its grocery and food and drink markets. Multinational investment has been slow to penetrate the market, which in itself continues to present numerous challenges to players in the sectors. Issues such as widespread poverty, highly uneven income distribution, under - developed mass grocery retail networks and high levels of unemployment will continue to weigh on the consumer outlook.

Headline Industry Data (local currency)

? 2014 per capita food consumption = +5.98%; compound annual growth rate (CAGR) forecast 2014 to 2017 = +4.54%

? 2014 alcoholic drinks value sales = +7.41%; CAGR growth forecast 2014 to 2017 = +4.99%

? 2014 soft drinks value sales = +7.76%; CAGR growth forecast 2014 to 2017 = +5.87%

? 2014 mass grocery retail sales = +6.94%; CAGR growth forecast 2014 to 2017 = +5.13%

Industry Developments

LT Group Raises $912 Million in Philippines's Largest Equity Sale

Filipino billionaire Lucio Tan's LT Group Inc. raised PHP37.72 billion (US$912.2 million) in the country's largest ever equity sale, benefiting from a stock market that has boomed just weeks after the country received an investment-grade rating.

The conglomerate's private-placement sale, which was announced in 2012, followed other large share sales in the region in recent months. It attracted strong interest from beyond Asia, sole book runner and lead issue manager UBS AG said, demonstrating investors' appetite for Philippine assets.

The offer was priced at the top end of an indicative range of PHP18 to PHP20.50 a share, and the company exercised an overallotment option to issue a total of 1.84bn shares, UBS said. The sale attracted 11 cornerstone investors and the order book totalled US$3.5bn. UBS said 23% of the funds came from Europe, 36% came from the US, and 41% came from Asia. It did not...

Table of Contents

Executive Summary
7
SWOT Analysis
9
Philippines Food Industry SWOT
9
Philippines Drink Industry SWOT
10
Philippines Mass Grocery Retail Industry SWOT
11
Business Environment
12
BMI's Core Global Industry Views
12
Table: Core Views
20
Asia Pacific Food & Drink Risk/Reward Ratings
21
Table: Food & Drink Risk/Reward Sub-Factor Ratings, Q113 (score out of 10)
22
Table: Asia Pacific Food & Drink Risk/Reward Ratings, Q113
25
Philippines' Food & Drink Risk/Reward Rating
25
Macroeconomic Outlook
27
Table: Economic Activity
30
Industry Forecast Scenario
31
Consumer Outlook
31
Food
35
Food Consumption
35
Table: Food Consumption Indicators - Historical Data & Forecasts, 2010-2017
35
Canned Food
36
Table: Canned Food Value/Volume Sales - Historical Data & Forecasts, 2010-2017
37
Confectionery
37
Table: Confectionery Value/Volume Sales - Historical Data & Forecasts, 2010-2017
39
Fish
39
Table: Fish Volume Sales, Production & Trade - Historical Data & Forecasts, 2010-2017
40
Dairy
41
Table: Dairy Volume Sales, Production & Trade - Historical Data & Forecasts, 2010-2017
41
Drink
43
Hot Drinks
43
Table: Hot Drinks Value Sales - Historical Data & Forecasts, 2010-2017
44
Soft Drinks
44
Table: Soft Drinks Value Sales - Historical Data & Forecasts, 2010-2017
45
Alcoholic Drinks
46
Table: Alcoholic Drinks Value/Volume Sales - Historical Data & Forecasts, 2010-2017
46
Trade
48
Table: Food & Drink Trade Indicators - Historical Data & Forecasts, 2011-2017
49
Mass Grocery Retail
49
Table: Mass Grocery Retail Sales - Historical Data & Forecasts, 2010-2017
51
Table: Sales Breakdown By Retail Format Type
51
Food
52
Key Industry Trends And Developments
52
General Mills Pulls Out Of The Philippines
52
Taiwanese Uni-President To Increase Production Capacity In The Philippines
52
McDonald's Versus Jollibee In Fast-Food War
52
Jollibee Banking On Dynamic Asian Growth
53
An Attractive Market For Food Producers
55
Alaska Milk Grows Sales
56
Market Overview
57
Food Processing
57
Agriculture
57
Organic Farming
58
Drink
59
Key Industry Trends And Developments
59
Spirits Sector Consolidation
59
San Miguel Brewery Posts Flat Volumes In The First Nine Months Of 2012
60
WTO's Ruling Has Mixed Implications For Spirits Industry
61
Eyeing The Philippine Drinks Potential
62
Market Overview
63
Hot Drinks
63
Soft Drinks
63
Alcoholic Drinks
64
Mass Grocery Retail
66
Key Industry Trends And Developments
66
Japanese FamilyMart Targets The Philippines
66
Rustan's Signs Distribution Deal With Casino
66
Philippines Seven Embarks On Expansion Drive
66
Market Overview
67
Table: Mass Grocery Retail Market By Estimated Number Of Outlets
68
Table: Average Sales Per Outlet By Format - 2012
68
Table: Mass Grocery Retail Sales By Format (PHPbn)
69
Competitive Landscape
70
Key Players
70
Table: Key Players In The Philippine Food Industry
70
Table: Key Players In The Philippine Drink Industry
71
Table: Key Players In The Philippine Mass Grocery Retail Sector
72
Company Monitor
73
Food
73
Alaska Milk Corporation
73
Universal Robina Corp (URC)
75
Drink
77
Tanduay Holdings
77
San Miguel Brewery (SMB)
79
Mass Grocery Retail
82
SM Investments - Retail Business (SM)
82
Philippine Seven Corp
84
Demographic Outlook
86
Table: Philippines' Population By Age Group, 1990-2020 ('000)
87
Table: Philippines' Population By Age Group, 1990-2020 (% of total)
88
Table: Philippines' Key Population Ratios, 1990-2020
89
Table: Philippines' Rural And Urban Population, 1990-2020
89
Risk/Reward Ratings Methodology
90
Table: Rewards
90
Table: Risks
91
Weighting
91
Table: Weighting
91
BMI Food & Drink Industry Glossary
92
Food & Drink
92
Mass Grocery Retail
92
BMI Food & Drink Forecasting & Sourcing
94
How We Generate Our Industry Forecasts
94
Sourcing
95

The Philippines Food & Drink Report features Business Monitor International (BMI)'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 Philippines 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 Philippines.

Key Benefits

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

Business Environment Rankings

BMI's Food & Drink Business Environment Rankings provide a country-comparative Risk-Reward Rankings index aimed at investors, food and drink manufacturers and mass grocery retailers.

The rankings methodology makes sophisticated use of over 40 industry, economic and demographic data points.

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.

Food Forecasts

BMI's food chapter is divided into sections such as Meat, Fish, Confectionary, Dairy and Canned Foods, and provides insight into a market's food industry, centred on a forecast to end-2018 for the sector. The chapter includes the following elements:

Industry Forecast Scenario - Historical data series and forecasts to end-2018 for growth of key indicators within a market's food industry. Including 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 the market's drink industry, centred on a forecast to end-2018 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 a market's grocery retail industry, centred on a forecast to end-201 for the sector. Forecast indicators include mass grocery retail sales by format (including supermarkets, hypermarkets, convenience and discount stores) and a breakdown for the organised retail sector versus the traditional sector, among others.

Competitive Landscape & Profiles

Illustration of the industry via rankings tables comparing revenues, number of outlets and number of employees. BMI analyses each company's market position, business strategies and investment potential.

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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