Spain Food and Drink Industry Update Quarter 1 2012

  • January 2014
  • -
  • Business Monitor International
  • -
  • 115 pages

According to a host of leading indicator data, Spain's economic recovery remains weak by regional standards, and we hold to our projection for real Gross Domestic Product growth to come in at no more than 0.7% in 2011. The medium-term economic outlook for Spain has worsened considerably in recent months. While the domestic economy remains beset by high unemployment, falling house prices and severe fiscal retrenchment, the external environment has also deteriorated on the back of a severe slowdown in the eurozone bloc.

Headline Market Data

2011 per capita food consumption = +0.4%; projection to 2016 = +14.8%
2011 alcoholic drink revenues = -0.23%; projection to 2016 = +3.1%
2011 soft drink revenues = +0.89% ; projection to 2016 = +20.6%
2011 mass grocery retail revenues = +0.85%; projection to 2016 = +19.0%

Key Firms Trends & Developments
Stevia's EU Approval to Spur Product Development: Sweeteners derived from the stevia plant have finally been formally approved for use by the European Commission. The move comes into force at the beginning of December 2011 and could pave the way for a host of new product launches containing the ingredient. Stevia-based sweeteners have already captured 12% of the US tabletop sweetener industry and this is likely to be an important early driver of awareness. However, the bigger opportunity lies within other parts of the food and drink market, such as soft drinks and confectionery, where there is a strong possibility that stevia-based products can capture a significant chunk of these sizeable industries. Indeed agribusiness giant Cargill has subsequently signed a distribution agreement with Azucarera in Spain to address the 'strong consumer demand' for the sweetener in the country.

Mercadona Takes Number One Slot in MGR Segment : The continued slump in the Spanish economy continues to be reflected in the results of local retailers and has led to price-focused Mercadona overtaking El Corte Ingles to become the country's largest retailer by revenues . Reporting its full-year results (ending February 2011) El Corte Ingles recently announced that its revenues flat-lined, coming in only 0.3% higher at Euros 16.41bn. This puts it just behind Mercadona, which has been grow ing aggressively and registered annual revenues of Euros 16.49bn. Our weak outlook for the Spanish consumer segment means that Mercadona's leading position is unlikely to be threatened in the medium term and in fact the firm is likely to pull away and establish a sizeable lead as the country's largest retailer.

Key Risk to Outlook
Eurozone Debt Crisis: Should a more pronounced downturn occur in the eurozone bloc, Spain would be pushed into a severe recession, which not only highlights serious downside risks to our already weak growth projections, but the government's fiscal deficit targets would also need reevaluating.

Table Of Contents

BMI Market View . 7
Industry SWOT Analysis 9
Spain Food Industry Environment and Risk Analysis 9
Spain Drink Industry Environment and Risk Analysis . 10
Spain Mass Grocery Retail Industry Environment and Risk Analysis 11

Environment Overview . 12
BMI’s Core World Market Views 12
Data : Food Prices, 2010 And 2011 . 13
Data : BMI’s Core Views For The Food and Drink Market 18
Western Europe Risk/Reward Ratings . 19
Data : United Kingdom Food and Drink Risk/Reward Ratings - Q112 . 20
Data : Western Europe Food and Drink Risk/Reward Ratings - Q112 21
Spain’s Food and Drink Risk/Reward Ratings 22

Macroeconomic Data 24
Data : Economic Activity 26

Market Projection Scenario . 27
Consumer Outlook . 27
Food. 30
Food Consumption 30
Data : Food Consumption Indicators - Historical Data and Projections, from 2008 to 2016 30
Canned Food/Prepared Food . 31
Data : Canned Food Value/Volume Sales - Historical Data and Projections 31
Confectionery 32
Data : Confectionery Value/Volume Sales - Historical Data and Projections 33
Drink 34
Hot Drinks 34
Data : Coffee Value Sales - Historical Data and Projections 34
Soft Drinks 34
Data : Soft Drink Value/Volume Sales - Historical Data and Projections 35
Alcoholic Drinks . 36
Data : Alcoholic Drinks Value/Volume Sales - Historical Data and Projections . 37
Mass Grocery Retail 38
Data : Mass Grocery Retail Sales By Format - Historical Data and Projections . 39
Data : Grocery Retail Sales By Format (%) . 39
Trade . 40
Data : Food and Drink Trade Indicators - Historical Data and Projections . 41
Food 42

Key Market Trends And Developments 42
Stevia’s EU Approval Will Spur Product Development 42
Agro-Food Fund Established in Spain 43
Nueva Rumasa Restructuring Continues . 43
Ebro Sees Revenue Increase But Earnings Seeing Impact of Rising Costs 44
SOS Posts First Profit In Three Years 45
Smithfield Looks To Raise Stake In Campofrio . 47
Spain Food and Drink Report Q1 2012
© Business Monitor International Ltd Page 4
Mixed Signs For Investment In Segment 48
Private Labels Gaining Industry Share. 49

Industry Analysis . 50
Prepared Food 50
Data : Spain - Frozen vegetables Projection, from 2008 to 2016 52
Data : Spain - Snack Foods Projection, from 2008 to 2016 53
Data : Spain -Pasta Projection from 2008 to 2016 . 56
Organic . 57
Meat And Fish 57
Data : Spain - Meat Projection, from 2008 to 2016 58
Data : Fish - Projection, from 2008 to 2016 . 60
Eggs And Dairy 62
Data : Spain - Oils and Fats, from 2008 to 2016 . 62
Data : Spain - Dairy Projection, from 2008 to 2016 . 66
Drink . 70

Key Market Trends And Developments 70
Spirits Hit by New Taxes . 70
Wine Exports Exposed To Currency Fluctuations. 70
Mahou-San Miguel Extends Beverage Portfolio . 71
Energy Drinks Launching . 72

Industry Analysis . 73
Soft Drinks 73
Alcoholic Drinks . 73
Mass Grocery Retail 75

Key Market Trends And Developments 75
Eroski Posts Loss for Third Consecutive Year 75
Dia’s First Results As Independent Operator Hint At Opportunities Ahead 75
Mercadona Now Largest Retailer In Spain As El Corte Ingles Flatlines . 77
Retailers Adapting Their Offering 78
Retailers Continue To Invest . 79

Industry Analysis . 79
Data : Structure Of Spain’s Mass Grocery Retail Industry By Estimated Number Of Outlets . 82
Data : Structure Of Spain’s Mass Grocery Retail Industry By Value (US$mn) . 82
Data : Structure Of Spain’s Mass Grocery Retail Industry By Value (EURmn) 82
Data : Annual Average Sales Per Outlet By Format - 2009 . 83
Data : Grocery Retail Sales By Format - Historical Data And Projections . 83

Competition Overview 84
Data : Key Players In Spain's Food Segment . 84
Data : Key Players In Spain's Drink Segment 85
Data : Key Players In Spain's Mass Grocery Retail Segment 86
Company Monitor 88
Food. 88
Grupo Ebro Puleva . 88
Grupo Leche Pascual Alimentación 90
Campofrio Alimentación SA 92
SOS Corporación Alimentaria 94
Drink 96
Heineken España SA . 96
Spain Food and Drink Report Q1 2012
© Business Monitor International Ltd Page 5
Mass Grocery Retail 98
Auchan 98
Centros Comerciales Carrefour .100
Eroski Group (Including Caprabo) 102
Mercadona .104
BMI Methodology 106
Food and Drink Business Environment Ratings 106
Ratings Methodology .106
Ratings System .106
Indicators .106
Data : Limits Of Potential Returns 107
Data : Risks To Realisation Of Potential Returns 108
Weighting .109
Data : Weighting .109
BMI Food and Drink Market Glossary 110
Food and Drink 110
Mass Grocery Retail 110
BMI Food and Drink Projection ing And Sources .112
How We Generate Our Market Projections 112
Sources 113

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