The US economy will continue to strengthen in 2014, due to sustained improvement in the labour market that will fuel an acceleration in private consumption. We will continue to see positive - although slowing - fixed investment growth this year, and we believe the drag on growth from government expenditure will lessen compared to last year. However, we have revised down our 2014 growth forecast from 2.4% to 2.1% due to a particularly weak Q114. Indeed, real GDP contracted at a seasonally-adjusted, annualised rate of 2.9% in the first quarter of the year, the largest contraction during a period of economic growth in decades. That said, the downward revision is attributable to base effects from Q1 and does not suggest the start of a major slowdown. We believe many of the contributing factors have already begun to recede, suggesting a much stronger second quarter.
Headline Industry Forecasts (local currency)
2014 per capita food consumption = +2.0%; five-year compound annual growth rate (CAGR) to 2018 = +4.1%.
2014 alcoholic drinks value sales = +3.7%; CAGR to 2018 = +3.5%.
2014 soft drink value sales = +3.1%; CAGR to 2018 = +1.9%.
2014 mass grocery retail sales = +2.9%; CAGR to 2018 = +2.5%.
Key Industry Trends And Developments
Premium Paid For Russell Stover Exaggerated
We believe Lindt's acquisition of Russell Stover will increase the company's exposure to North America. The acquisition is motivated by strong potential for growth for premium chocolate in the US. In this context, the premium paid for Russell Stover is exaggerated given the smaller growth potential for box chocolates, low synergies and limited room for cross selling.
Bourbon To Outperform Scotch In 2014 Export Growth
We outlined the view in April 2014 that the export growth prospects for bourbon whiskey - the dominant whiskey category in the US - would be stronger than scotch (from Scotland) in 2014 (see 'Bourbon Exports To Outperform Scotch In 2014', April 11 2014). A key driver of...
The United States 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 United States 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 United States.
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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.
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.