BMI View: We expect to see another positive year for the South African economy and consumer industries through 2014, as the country's economy continues to recover post-recession. We forecast real GDP gro wth of 2.5% in 2014, up from 2.1 % the previous year. In addition, p rivate consum ption is expected to c ontinue its growth of the past four years at a rate of 2.2% in 2014, and 2.9% in 2015 . Although the economic recovery has not been without challenges and will likely remain uneven, in our view, the consumer sector continues to hold up.
Headline Industry Data
2014 per capita food consumption (local currency) = +8.1%; five-year forecast compound annual growth (CAGR) to 2017 = +8.1%.
2014 soft drinks per capita volume sales = +7.6%; forecast compound annual growth to 2017 = +5.0%
2014 mass grocery retail sales (local currency) = +9.3%; forecast compound annual growth to 2017 = +9.2%.
Key Company Developments
Pick n Pay Making Progress : South Africa's second biggest food retailer by sales Pick n Pay has improved its position. After a challenging period that saw it lose further ground to its main rival Shoprite, it has reported promising interim results for the first half of its trading year.
Chief among Pick n Pay's problems has been a relatively dated distribution network, which was thought to be a contributing factor in its consistently weaker operating margin performance compared with Shoprite over the past few years.
To address such shortcomings, its margins would have to get weaker before they could get better as the company invested in improving its competitiveness. In the six months to September its same-store sales rose 3.1% year-on-year (y-o-y). Trading profit increased 15.% y-o-y to ZAR317.5mn (US$32.2mn)
Longer-term, Pick n Pay is aiming to bump up its operating margins nearer to the 4.5% range, compared with 2.7% last year and 2.3% this year. Getting its margins above 4% would represent a tremendous step forward in Pick n Pay's...
The South Africa 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 South Africa 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 South Africa.
- Benchmark BMI's independent food and drink industry forecasts for South Africa to test other views - a key input for successful budgeting and strategic business planning in the South African food and drink market.
- Target business opportunities and risks in South Africa 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.
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 Ratings
BMI's Food & Drink Business Environment Ratings provide a country-comparative Risk-Reward Ratings index aimed at investors, food and drink manufacturers and mass grocery retailers.
The ratings 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.
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.
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.