2012-08-31 14:09:14 - New Food market report from Business Monitor International: "Malaysia Food & Drink Report Q4 2012"

We are relatively optimistic about the near-term domestic demand conditions in Malaysia. Cash handouts targeted at around 5.2mn lower-income households should help support private consumption, particularly in the mass-market segment. Moderating price pressures and scope for monetary loosening from the Malaysian government should also provide a boost to demand conditions in the country. Therefore, we believe domestic demand in Malaysia is likely to outperform the broader economy for the foreseeable future. However, we acknowledge intensifying global headwinds and a property price correction as major downside risks to our private consumption outlook for Malaysia.

Headline Industry Data

* 2012 food consumption = +2.3%; compound annual growth rate (CAGR) forecast to 2016 = +2.9%
* 2012 soft drinks value sales = +4.7%; CAGR

forecast to 2016 = +5.0%
* 2012 alcoholic drinks value sales = +3.3%; CAGR forecast to 2016 = +4.6%
* 2012 mass grocery retail sales = +6.9%; CAGR forecast to 2016 = +8.2%


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Key Industry Trends

BMI Confident About Dutch Lady Milk's FY2012 Earnings Prospects: In April 2012, Malaysia-based beverage firm Dutch Lady Milk Industries reported strong growth in both revenue and earnings for the year ending December 2011. More noteworthy is the company's improvement in its operating margins, which is a remarkable showing given the backdrop of an inflationary environment in FY2011. Given its strong pricing power and ability to generate cost efficiencies, we continue to see reasons to be optimistic about Dutch Lady's FY2012 earnings prospects.

Aeon Could Look To Discount Retailing And Fresh Foods For Untapped Opportunities: International expansion has long been a strategic priority for Japanese retailer Aeon. Aeon is accelerating its expansions across emerging markets such as Vietnam as it struggles to contend with subdued domestic demand conditions. While Malaysia's long-term retail prospects do not compare as favourably to Vietnam, it is nonetheless an important growth market for Aeon, and Aeon Malaysia should benefit from its parent company's expansionary ambitions. As the Malaysian mass grocery retail (MGR) market edges towards maturity and greater consolidation, the sub-sectors of fresh food produce, private labels and discount retailing should provide enticing growth opportunities for Aeon in the longer term.

Risks To Outlook

Headwinds in the US and eurozone remain the key risks to our outlook on the Malaysian economy. Should developments in these regions turn out to be more severe than expected, we could see a continued deterioration in external demand, which could become a further drag on Malaysia's economic growth. This scenario could dampen consumer sentiment, in turn weighing on domestic demand growth.

Partial Table of Contents:

SWOT Analysis
- Malaysia Food Industry SWOT
- Malaysia Drinks Industry SWOT
- Malaysia Mass Grocery Retail Industry SWOT
Business Environment
- BMI's Core Global Industry Views
- Table: Core Views
- Asia Pacific Food & Drink Risk/Reward Ratings
- Table: Food & Drink Risk/Reward Sub-Factor Ratings, Q412 (score out of 10)
- Table: Asia Pacific Food & Drink Risk/Reward Ratings, Q412
- Malaysia's Food & Drink Risk/Reward Ratings
- Macroeconomic Outlook
Industry Forecast Scenario
- Consumer Outlook
- Food
- Food Consumption
- Table: Food Consumption Indicators, 2010-2016
- Confectionery
- Table: Confectionery Sales, 2010-2016
- Trade
- Table: Trade Of Food, Drink And Tobacco, 2010-2016
- Drink
- Hot Drinks
- Table: Tea And Coffee Sales, 2010-2016
- Alcoholic Drinks
- Table: Alcoholic Drink Sales, 2010-2016
- Soft Drinks
- Table: Soft Drink Sales, 2010-2016
- Mass Grocery Retail
- Table: MGR Sales By Format, 2010-2016
Food
- Key Industry Trends And Developments
- Malaysia A Key Component Of Multinationals' Arsenal
- Yum!'s Divestment Should Prove Supportive Of International Ambitions
- Building Upon Superiority In Halal Food
- Market Overview
- Food Production
- Confectionery
- Halal
- Agriculture
- Dairy
Drink
- Key Industry Trends And Developments
- A Cloudy Revenue Outlook For YHS In 2012
- BMI Confident About Dutch Lady Milk's FY2012 Earnings Prospects
- Malaysia Catching The Sights Of Regional Players
- Diversification A Growing Trend Among Cognac Producers
- Sharpening Profitability Coming Into Greater Focus
- Market Overview
- Soft Drinks
- Hot Drinks
- Alcoholic Drinks
Mass Grocery Retail
- Key Industry Trends And Developments
- Aeon Could Look To Discount Retailing And Fresh Foods For Untapped Opportunities
- Malaysia: A Stepping Stone To Regional Ambitions
- Dairy Farm To Reap Strong Rewards From Its Regional Diversity
- Tesco Leapfrogs Carrefour In South East Asian Battle
- Market Overview
- Table: Structure Of Malaysia's MGR Market - Estimated Number Of Outlets, 2005-2011
- Table: Structure Of Malaysia's MGR Market - Sales By Format, 2005-2011 (US$bn)
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