Turkey Food and Drink Industry Update Quarter 3 2012

• Publication date: May 2012
• Report size: 98 pages

Includes 3 FREE quarterly updates Despite short-term challenges posed by the slowing domestic and external demand, we remain optimistic about the Turkish consumer in the longer term. In the current quarter, the country remains ranked second in our proprietary Risk/Reward ratings for Central and Eastern Europe (CEE), which covers 15 key regional industries. Turkey scores particularly favourably in terms of its long-term rewards, ind...

Includes 3 FREE quarterly updates

Despite short-term challenges posed by the slowing domestic and external demand, we remain optimistic about the Turkish consumer in the longer term. In the current quarter, the country remains ranked second in our proprietary Risk/Reward ratings for Central and Eastern Europe (CEE), which covers 15 key regional industries. Turkey scores particularly favourably in terms of its long-term rewards, indicating the substantial potential for the growth of food and drink volumes as well as volumes, especially if the country’s operating risks are addressed in a timely fashion.

Headline Market Data
(local currency) - 2012 per capita food consumption value revenues = +6.4%; projection compound annual growth to 2016 = +7.0%.
- 2012 alcoholic drinks revenues = +10.4%; projection compound annual growth to 2016 = +9.5%. - 2012 soft drinks revenues = +11.4%; projection compound annual growth to 2016 = +12.3%. - 2012 mass grocery retail revenues = +12.7%; projection compound annual growth to 2016 = +12.6%. Key Firms Trends Turkish Ice Cream Industry of Interest: Shortly after Unilever’s announcement that it is building a new ice cream plant in central Turkey, in March 2012, US-based ice cream parlour chain Cold Stone Creamery was reported to be planning to enter the Turkish industry, and was reportedly looking for a guarantor to open its label in Turkey. The firm has been advertising in local newspapers and, if it is successful in finding a native investor, it plans to launch its first Turkish store in 2014. The Turkish ice cream industry grew by a year-on-year (y-o-y) margin of almost 30% in 2010.
Sabanci Looking to Change its Retail Cooperation with Carrefour: According to NamNews, Turkish retailer Sabanci is attempting to alter the terms of its food retail joint venture (JV) in the country with French Carrefour. Sabanci has argued that Carrefour has not done enough to help the JV capitalise on opportunities in the Turkish industry . The JV runs 216 supermarkets and 27 hypermarkets in Turkey, and saw revenues of Euros 1.8bn (US Dollar 2.4bn) in 2011. Sabanci's CEO commented: 'We don't want to continue the business as it is. At the moment we are 40% [owners] and we don't have the management control. We're not happy with the performance of the industry player so we want to change the situation.'

Key Risks to Outlook
Downside Risks Prevail: We continue to see downside risks to our current projections, on account of the country’s precarious external position and a deteriorating global macroeconomic backdrop. Cooling domestic demand will also have a major impact on the overall growth, given that private consumption currently represents in excess of 70% of Turkey’s Gross Domestic Product .

Food Retailing Industry in Turkey

BMI Market View 7
Industry SWOT Analysis 8
Turkey Food Industry Environment and Risk Analysis . 8
Turkey Drink Industry Environment and Risk Analysis . 9
Turkey Mass Grocery Retail Industry Environment and Risk Analysis ... 10

Environment Overview .. 11
BMI’s Core World Market Views ... 11
Data : BMI’s Core Views . 21
CEE Food & Drink Risk/Reward Ratings . 22
Data : Food & Drink Risk/Reward Sub-Factor Ratings, Q312 (scores out of 10) ... 23
Data : CEE Food & Drink Risk/Reward Ratings, Q312 .. 26
Turkey’s Food And Drink Risk/Reward Ratings 27

Macroeconomic Data ... 28
Data : Turkey – Economic Activity .. 33

Market Projection Scenario .. 34
Consumer Outlook 34
Food .. 38
Food Consumption ... 38
Data : Food Consumption Indicators – Historical Data & Projections . 39
Confectionery ... 39
Data : Value/Volume Sales of Selected Food Sub-sectors – Historical Data & Projections .. 40
Canned Food ... 43
Data : Canned Food – Historical Data & Projection . 43
Processed Foods .. 44
Data : Pasta – Production, Consumption & Trade – Historical Data & Projection .. 44
Data : Fish – Production, Consumption & Trade – Historical Data & Projection 45
Data : Breads and Jellies – Production, Consumption & Trade – Historical Data & Projection .. 46
Dairy 46
Data : Dairy – Production, Consumption & Trade – Historical Data & Projection .. 47
Drink . 50
Alcoholic Drinks .. 50
Data : Beer Volume/Value Sales – Historical Data & Projections . 51
Soft Drinks ... 51
Data : Soft Drinks 52
Hot Drinks ... 53
Data : Tea Value/Volume Sales – Historical Data & Projections .. 54
Trade . 55
Data : Trade Indicators – Historical Data & Projections .. 55
Mass Grocery Retail . 56
Data : Turkey Mass Grocery Retail Sales by Format – Historical Data & Projections . 57
Data E: Grocery Retail Sales By Format – Historical Data and Projections 57
Food 58



Key Market Trends:
And Developments
... 58
Companies Raising Capital For Expansion . 58
Multinational Interest Growing… 58
…As is Interest from Middle East Players 60
Agricultural Exports to the EU on the Rise .. 60

Industry Analysis ... 60
Consumption 60
Production ... 61
Confectionery ... 61
Agriculture ... 61
Organic Agriculture . 62
Halal Food ... 62
Drink 64



Key Market Trends:
And Developments
... 64
Coca Cola Iceçek Our Emerging Industries Pick ... 64
Anadolu Efes Expands in Russia and Ukraine . 66
Foreign Firms Interested in Domestic Beverage Producers 67
Beer Industry Growing .. 67
Bottled Water And Juices Important To Positive Soft Drinks View .. 68

Industry Analysis ... 69
Alcoholic Drinks .. 69
Beer . 69
Spirits ... 69
Wine . 69
Soft Drinks ... 70
Data : Soft Drinks Sales Breakdown In Turkey 71
Hot Drinks ... 71
Mass Grocery Retail .. 72



Key Market Trends:
And Developments
... 72
Discount Stores Have Excellent Prospects ... 72
Duty Free Capitalising On Turkish Airlines Boom, Just Like In The Gulf ... 74

Industry Analysis ... 75
Leading Retailers .. 77
Data : Structure of Turkey's Mass Grocery Retail Segment by Number of Outlets, estimates . 78
Data : Structure of Turkey's Mass Grocery Retail Industry – Sales Value by Format (TRYbn) . 78
Data : Value of sales per outlet 2011 ... 78

Competition Overview 79
Consumer Share Price Analysis 79
Data : Food and Drink

Key Players
82
Data :

Key Players
in Turkey’s Mass Grocery Retail Segment ... 83
Company Monitor .. 84
Food .. 84
Ülker Group . 84
Nestlé Turkey ... 85
Sabanc? Holding .. 86
Drink . 87
Anadolu Efes 87
Coca-Cola ?çecek (CCI)... 88
Mass Grocery Retail . 89
Migros Turk . 89
B?M .. 90
Tesco Kipa ... 91
BMI Methodology ... 92
Risk/Reward Ratings Methodology ... 92
Data : Rewards 92
Data : Risks . 93
Weighting .. 93
Data : Weighting.. 93
BMI Food & Drink Market Glossary ... 94
Food & Drink 94
Mass Grocery Retail . 94
BMI Food & Drink Projection ing & Sourcing . 96
How We Generate Our Market Projections ... 96
Sourcing ... 97

Food Retailing in Turkey

Turkey Per-capita Food Consumption, Us$

• $ 250
• Industry data
• February 2013

Yearly, From 2005 To 2016
By Business Monitor International
Source: Turkish Statistical Institute, BMI/BMI calculation

• Industries : Food Retailing
• Countries : Turkey