Romania Food and Drink Report Q3 2012

Includes 3 FREE quarterly updates

BMI View: While Romania continues to be viewed with interest from a longer-term perspective, the country’s food and beverages market will remain challenging in the course of 2012. For example, recent political turmoil in Romania has pushed the Romanian leu into a new trading range against the euro, which will increase the price of imported foods, on which the country largely relies. We also expect at best a modest improvement in domestic demand in H212, as the government’s planned public sector wage increases feed through, which will push up both non-food price inflation and services inflation.

Headline Industry Data
(local currency) - 2012 per capita food consumption = +4.08%; forecast compound annual growth rate to 2016 = +5.07%
- 2012 alcoholic drinks sales = +4.47%; forecast compound annual growth rate to 2016 = +5.01% - 2012 soft drinks sales = +4.96%; forecast compound annual growth rate to 2016 = +5.74% - 2012 mass grocery retail = +8.66%; forecast compound annual growth rate to 2016 = +9.38% Key Industry Trends And Developments Food and Beverage Producers Investing in Private Retail Stores: Prominent Romanian meat processor ChrisTim is planning to open a network of mobile carts across the capital. The company already operates eight supermarkets and 15 neighbourhood stores in Bucharest, with plans also unveiled for the further expansion of this retail network. Other companies engaged in the same practice include agricultural producer Agricola Bacau, which already operates a network of Agricola Bacau stores, Murfatlar, the largest wine producer in the country, and fellow wine maker Halewood Romania Ltd, which also operates online stores, thus allowing consumers to procure wines from overseas destinations, such as New Zealand. Private stores are aiming to increase brand awareness, cut cost and provide competition against private label brands increasingly promoted by mass grocery retail (MGR) operators across the country.
Key Risks to Outlook Downside Risks Remain in Play: Risks to our outlook lie firmly to the downside, with the country highly exposed to eurozone problems through its trade patterns. Romania’s idiosyncratic political risk, with the elections in November 2012 fast approaching, could see another bout of investor risk aversion push the Romanian leu higher against the euro, which will bode poorly for imported goods. At the same time, a deterioration in the eurozone economy in the form of a country defaulting on its debt, or exiting the eurozone, would lead to further downside pressure on the leu as trade and investment flows would drop further.

Beverage Industry in Romania

BMI Industry View 7
SWOT Analysis . 8
Romania Food Industry SWOT .. 8
Romania Drink Industry SWOT . 9
Romania Mass Grocery Retail Industry SWOT 10
Business Environment .. 11
BMI’s Core Global Industry Views ... 11
Table: Core Views ... 19
CEE Food & Drink Risk/Reward Ratings . 20
Table: Food & Drink Risk/Reward Sub-Factor Ratings, Q312 (scores out of 10) ... 21
Table: CEE Food & Drink Risk/Reward Ratings, Q312 .. 24
Romania’s Food & Drink Business Environment Ratings. 25
Macroeconomic Outlook ... 26
Table: Economic Activity . 28
Industry Forecast Scenario ... 29
Consumer Outlook 29
Food.. 31
Food Consumption ... 31
Table: Food Consumption Indicators – Historical Data & Forecasts . 32
Confectionery... 33
Table: Confectionary Value/Volume Sales – Historical Data & Forecasts . 34
Canned And Processed Food ... 34
Table: Canned Food Value/Volume Sales – Historical Data & Forecasts .. 35
Table: Meat . 35
Table: Jams & Jellies .. 36
Pasta 37
Table: Pasta . 37
Baked Products 39
Table: Snack Foods . 39
Dairy 40
Table: Dairy 42
Drink . 45
Alcoholic Drinks .. 45
Table: Alcoholic Drinks Value/Volume Sales – Historical Data & Forecasts . 46
Soft Drinks ... 47
Table: Soft Drinks Value/Volume Sales – Historical Data & Forecasts .. 48
Hot Drinks ... 49
Table: Hot Drinks Value Sales – Historical Data & Forecasts 50
Trade 50
Table: Trade Indicators – Historical Data & Forecasts .. 51
Mass Grocery Retail . 51
Table: Mass Grocery Retail Sales By Format – Historical Data & Forecasts . 53
Table: Mass Grocery Retail By Format (%) 53
Food . 54
Key Industry Trends And Developments ... 54
Food Consumption In Decline . 54
Interest In Fast-Food Industry . 54
Development Of New Agricultural Segments ... 55
Reshuffling In The Confectionery Market 56
Romania Remains Attractive As Manufacturing Location ... 57
Romanian Dairy Industry Remains Competitive .. 58
Market Overview .. 58
Food Consumption ... 58
Food Production .. 59
Leading Players ... 59
Meat Processing .. 60
Confectionery... 61
Canned Food ... 62
Trade ... 62
Agriculture ... 62
Organic Farming . 63
Drink 65
Key Industry Trends And Developments ... 65
Romanians Interested In Premium Wine .. 65
Bottled Water Industry Continues Investment .. 65
Beverage Segments Dented By Economic Downturn ... 66
Market Overview .. 68
Alcoholic Drinks .. 68
Beer . 69
Wine . 71
Spirits... 72
Soft Drinks ... 73
Hot Drinks ... 76
Mass Grocery Retail ... 78
Key Industry Trends And Developments ... 78
MGR Players Continue To Expand In Romania Despite Economic Challenges .. 78
Retail Insolvencies On The Rise ... 81
Market Overview .. 82
Leading Retailers . 83
Table: Structure Of Mass Grocery Retail Sector By Estimated Number Of Outlets . 84
Table: Structure Of Mass Grocery Retail Sector – Estimated Sales Value By Format . 84
Table: Structure Of Mass Grocery Retail Sector – Average Sales Value Per Retail Outlet – 2011.. 85
Competitive Landscape . 86
Table: Key Players In Romania’s Food Sector 86
Table: Key Players In Romania’s Drinks Sector .. 87
Table: Key Players In Romania’s Mass Retail Grocery Sector 88
Company Monitor ... 90
Food.. 90
Kandia Excelent ... 90
Vel Pitar .. 91
Nestlé Romania 92
Drink . 93
Quadrant Amroq Beverages SA (QAB)/Pepsi Americas Romania ... 93
Brau Union Romania (Heineken) . 94
SABMiller Romania . 95
Bergenbier (StarBev) ... 96
Mass Grocery Retail . 97
Metro Cash & Carry Romania . 97
Rewe Romania . 98
Hiparlo/Carrefour ... 99
Delhaize ..100
Auchan 101
Demographic Outlook .. 102
Table: Romania’s Population By Age Group, 1990-2020 (‘000) 103
Table: Romania’s Population By Age Group, 1990-2020 (% of total) 104
Table: Romania’s Key Population Ratios, 1990-2020 105
Table: Romania’s Rural And Urban Population, 1990-2020 ..105
Risk/Reward Ratings Methodology 106
Table: Rewards ...106
Table: Risks 107
Weighting .107
Table: Weighting 107
BMI Food & Drink Industry Glossary . 108
Food & Drink ..108
Mass Grocery Retail 108
BMI Food & Drink Forecasting & Sourcing ... 110
How We Generate Our Industry Forecasts ..110
Sourcing ..111

Beverage in Romania

Romania Alcoholic Drinks Sales, Us$mn

• $ 250
• Industry data
• February 2013

Yearly, From 2002 To 2016
By Business Monitor International
Source: National Statistical Institute, National Bank of Romania, BMI/BMI calculation

• Industries : Beverage
• Countries : Romania

Romania Food And Drink Trade Balance Us$mn

• $ 250
• Industry data
• January 2013

Yearly, From 1995 To 2017
By Business Monitor International
Source: National Statistical Institute, National Bank of Romania, BMI/BMI calculation

• Industries : Beverage
• Countries : Romania

Romania Alcoholic Drinks Sales (mn Litres)

• $ 250
• Industry data
• January 2013

Yearly, From 2002 To 2017
By Business Monitor International
Source: National Statistical Institute, National Bank of Romania, BMI

• Industries : Beverage
• Countries : Romania

Romania Alcoholic Drinks Sales, Us$ % Change Y-o-y

• $ 250
• Industry data
• January 2013

Yearly, From 2003 To 2017
By Business Monitor International
Source: National Statistical Institute, National Bank of Romania, BMI/BMI calculation

• Industries : Beverage
• Countries : Romania

Romania Alcoholic Drinks Sales, Litres Per Capita

• $ 250
• Industry data
• January 2013

Yearly, From 2002 To 2017
By Business Monitor International
Source: National Statistical Institute, National Bank of Romania, BMI/BMI calculation

• Industries : Beverage
• Countries : Romania