"South Africa Food & Drink Report Q4 2012" Now Available At Fast Market Research

New Food research report from Business Monitor International is now available from Fast Market Research

by Bill Thompson

(WireNews+Co) - Boston, MA - 04 January 2013

While we remain broadly optimistic about the consumer outlook in South Africa, serious headwinds from the global economy will inevitably take their toll on GDP growth and therefore also on private consumption. Moreover, there are major domestic problems that will undoubtedly weigh on economic growth, including high unemployment, frequent industrial unrest and intermittent power shortages.

Headline Industry Data (local currency)

- 2012 per capita food consumption = +8.3%; forecast compound annual growth (CAGR) to 2016 = +8.9%.
- 2012 alcoholic drinks sales = +9.2%; forecast CAGR to 2016 = +9.4%.
- 2012 soft drinks sales = +11.9%; forecast CAGR to 2016 = +13.4%.
- 2012 mass grocery retail sales = +9.4%; forecast CAGR to 2016 = +9.9%.

View Full Report Details and Table of Contents (http://www.fastmr.com/prod/504102_south_africa_food_drink_report_q4_2012.aspx) (http://www.fastmr.com/prod/504102_south_africa_food_drink_report_q4_2012.aspx)

Key Company Developments

Multinationals Expand Local Production: In August 2012, Swiss food group Nestle established two new production facilities in South Africa as part of its strategy to expand its footprint in the country. The firm had announced in February 2011 that it would invest ZAR400mn (US$48.9mn) in the two plants to address the growing demand for its products. Shortly before this, the privately owned Italy-based food company (mainly confectionery) Ferrero was reported to be expected to strengthen its business in South Africa over the next few years, potentially through manufacturing another one of its well-known brands locally.

Retail Sales Holding Up Well: Many of South Africa's leading retailers report year-end results mid-year (calendar), and it seems as if the 2011/12 period was another good for one for the industry. Shoprite, the largest South African food retailer by sales, reported an 8.5% increase in same-store sales from June 2011 to more than US$10bn on the back of promising growth from its international business. Similarly, Woolworths, which focuses more on the higher end of the market than Shoprite, posted a 16% increase in sales in its fiscal year to June 24 2012, to US$7.56bn, with growth driven by the addition of new outlets. The company's sales reached US$7.56bn, beating analysts' estimates.

Key Risks To Outlook

The 'Marikana Massacre' Weighs Down on Investor Sentiment: The August 2012 deaths of 34 protesting miners at Lonmin's Marikana platinum mine illustrate the seriousness of worker tensions afflicting the platinum industry. Despite the government's efforts to address the underlying issues, we expect the dispute to rumble on, weighing on platinum output and investor perceptions in general. The incident has exposed the serious tensions stemming from poverty and inequality that exist under the surface in South Africa.

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