2013-12-27 11:29:56 - Recently published research from Business Monitor International, "Singapore Food & Drink Report Q1 2014", is now available at Fast Market Research
The Singaporean consumer outlook remains steady as the city-state continues to push for economic momentum. With unemployment low and private consumption stable, the Singapore consumer sector continues to look strong. The Singaporean economy has shown some nascent signs of life lately, with a strong services sector powering real GDP growth to a surprise 5.1% year-on-year performance in Q313.
As a result of the economy's better than expected performance, as well as material revisions to H113 figures, we have upgraded our full-year real GDP 2013 forecast to 3.6% from 3.1% previously. That said, we believe that a somewhat middling external demand picture will likely effect a modest slowdown from the current pace of growth in 2014, and therefore retain our 3.2% forecast
for the year.
Headline Industry Data (local currency)
* 2014 food consumption = +1.9%; compound annual growth rate (CAGR) forecast 2014 to 2017 = +1.4%
* 2014 alcoholic drink value sales = +7.4%; CAGR forecast 2014 to 2017 = +5.0%
* 2014 soft drink value sales = +3.2%; CAGR forecast 2014 to 2017 = +2.0%
* 2014 mass grocery retail sales = +2.7%; CAGR forecast 2014 to 2017 = +2.1%
* 2014 trade deficit growth= +10.3%; CAGR forecast 2014 to 2017= +8.7%.
Full Report Details at
- www.fastmr.com/prod/754664_singapore_food_drink_report_q1_2014.a ..
Industry Trends & Developments
Heineken To Enter Singapore Soft Drinks Market: Global brewer Heineken will begin to market soft drinks in Singapore following Fraser & Neave's decision not to act on a non-compete clause signed between the two companies in January. In late 2012, Heineken bought Fraser & Neave's stake in Malaysia-based Asia Pacific Breweries for US$4.1bn. As part of the deal, Heineken signed an agreement not to manufacture, distribute or sell soft drinks in Singapore for two years from the completion of the acquisition. Fraser & Neave has since stepped aside and allowed Heineken to enter into the market, which is currently dominated by the Singaporean company.
In 2012, Fraser & Neave's soft drinks sales increased 2% year-on-year (y-o-y) to US$3.8bn, with profit before interest and taxes rising by 1% to US$535mn. This is despite the firm losing in 2010 its licence to distribute Coca-Cola products in the region, and selling its stake in Asia Pacific Breweries towards the end of 2012. The company is the market leader in many beverage sectors, with its well-established brands in Singapore including the 100PLUS isotonic drink, F&N sparkling drinks and the F&N SEASONS Asian-inspired drinks and teas.
Petra Foods In Dispute With Barry Callebaut On Cocoa Unit Sale: Singapore's Petra Foods is in a dispute with Barry Callebaut after the latter sought a discount in the final pricing for buying Petra's cocoa business. Switzerland-based Barry Callebaut, the world's biggest maker of finished chocolate products for companies such as Nestle and Hershey, sought a reduction of $98.3 million in the closing price in September 2013, which Petra Foods considered unjustified. In July, Petra Foods said it expected to receive $860 million from the deal, after it first announced selling its cocoa ingredients business to Barry Callebaut for $950 million last December. Petra Foods said that Barry Callebaut's proposal to reduce the closing price is not compliant with the sale and purchase agreement and the law and does not have a proper or valid basis.
Haribo Targets Sweetening Confectionery Market: German confectionery giant Haribo has increased its presence in Singapore as it looks to capitalise on growing confectionery demand. Having confirmed a deal with expansion services provider DKSH, the announcement not only signals continuing confidence in the Singaporean confectionery segment but the strategic benefit of being in proximity to new markets such as Malaysia, Indonesia and Myanmar, which continue to offer dynamic potential to both domestic and international confectionery producers. As Haribo is already present in the market, we expect it to perform well; however, the geographically strategic value of an increased presence in Singapore is a clear highlight of the proposed new deal.
Petra Foods Looking For Brand Growth In Asian Markets: Singapore-based confectioner Petra Foods is aiming for brand growth in markets across Asia following the sale of its loss-making cocoa ingredients unit to Swiss chocolate-maker Barry Callebaut, reports Just-Food. The company offloaded the business division for US$950mn in June 2013, with its weak performance having led Petra to post a US$10.1mn loss during H113. CEO John Chuang said that the company will now look to capitalise on 'vibrant economies and fast-growing middle income classes' in the Asian region to develop brand growth.
Heineken Signs JV To Sell Beer In Myanmar: In May 2013 Heineken, the parent company of Asia Pacific Brewery (APB), announced that it had signed a joint venture (JV) agreement with the privately owned Alliance Brewery Company to produce and sell Heineken beers in Myanmar. Through APB, Heineken will own 57% of the JV called APB Alliance Brewery Company Limited, and will be responsible for overall management, providing brewing and technical expertise, ingredients procurement and brands licensing. APB Alliance Brewery will build a new Greenfield brewery in Myanmar, representing an investment of US$60mn. The brewery is expected to be operational by the end of 2014, will create more than 400 jobs and will give Heineken and APB access to one of the least saturated beer markets in the region.
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