adding value in_food_industry_oct13

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Update by CONEXIDADE October 2013 ADDING VALUE IN FOOD INDUSTRY

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A short review of Foodserice market size and trends in Brazil.

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Page 1: Adding value in_food_industry_oct13

Update by CONEXIDADE

October 2013

ADDING VALUE IN FOOD INDUSTRY

Page 2: Adding value in_food_industry_oct13

THANK YOU ALL!

This is a part of the information I reviewed with clients recently based on seminars, trade show, direct talk with industry and internet.

The information is free to use and if you want to discuss further or get more data on specific matters contact me in addresses below.

Have a successful year end!.

Hamilton Caio Gouvea

[email protected]

CONEXIDADE

+5511972671139

Page 4: Adding value in_food_industry_oct13

7 Billion People Expend USD 7 Trillion in FOOD

< 4 >

EducationEducation

HealthHealth

WorkWork

LeisureLeisure

CommercialCommercial

HotelsHotels

TravelTravel

PurchasePurchase$ 4.200 $ 2.800

RETAIL (60%) FOOD SERVICE (40%)Conv. Store [$70]Gas Station [$50]

Other [$50]

Catering[$40]

Hotéls, Resorts, SPA’s[$200]

Sports e Leisure, Parks[$40]

Hospitals e Clinics[$100]

Offices, Industries[$300]

Schools , Universities[$160]

Restaurants [$700] Fast Food [$500]

Coffee & Bakery [$300]

Street [$250] Vending [$50]

64%[$1.800]

20%[$560]

10%[$280]

6%[$170]

Consumers

Page 5: Adding value in_food_industry_oct13

Supply Chain Overview

Industry, Distributor, User and Consumerbut either

Technology Supplier, Volume Supplier and Brand Owners

< 5 >

Functional Ingredients & Flavors

Commodities

Retail Brands

Store Brands

Restaurant Brands

Page 6: Adding value in_food_industry_oct13

< 6 >

FOOD SERVICEleads Brazilian market growth in the last 17 years

0

50

100

150

Brazilian food market size atmanufacturer value (R$ billions)

95

46

12

58

96

51

13

64

97

56

14

70

98

59

18

77

99

61

22

83

00

63

24

87

01

66

22

89

02

75

26

101

03

87

30

116

04

96

34

130

0.8%

CAGR(95-04)

8.4%

12.6%

CAGR(95-04)

4.7%

Retail

FoodService

Nominal Real

FOOD SERVICE grows at 14% per year and RETAIL at 10% in last 17 years

Page 7: Adding value in_food_industry_oct13

MENOS BRASILEIROS COMENDO FORA DE CASA...

Penetração

Gasto Médio R$

Classe AB R$ 3.049Classe C R$ 1.665Classe DE R$ 1.238

2011

87%

1.657

ALIMENTAÇÃO E BEBIDA FORA DO LARALIMENTAÇÃO E BEBIDA DENTRO DO LAR

Penetração

Gasto Médio R$

Classe AB R$ 7.721Classe C R$ 5.884Classe DE R$ 5.166

2011

100%

5.590

2012

100%

6.075

2012

82%1.891+9% +14%

127 (índice de gasto)

97

85

161 (índice de gasto)

88

65

Fonte: HolisticView 2013 Kantar Worldpanel

Out Of Home / In Home: from 25% (class DE) to 40% (class AB) and OOH growing faster

Page 8: Adding value in_food_industry_oct13

Brazilian FOOD SERVICE Market

R$ 100 Billion Sizebut Client Users With Different Needs and Expectations

< 8 >

0

20

40

60

80

100%

Restaurants

F&V

Bakery

Staples

Meat,poultry&seafood

Oils& Fats

CulinaryFrozen

27

Bakeries

Bakery

Staples

Oils& Fats

Dairy

Desserts

17

Bars

F&V

Bakery

Staples

Meat,poultry&seafood

Oils& Fats

Dairy

Culinary

Frozen

14

SnackBars

F&V

Staples

Meat,poultry&seafood

Desserts

Culinary

Frozen

13 5

Catering

F&V

Bakery

Staples

Meat,poultry&seafood

Culinary

23

FastFood

F&V

Oils& Fats

Staples

Meat,poultry&seafood

Dairy

Culinary

Frozen

14

Hotels CVS

Others

Page 9: Adding value in_food_industry_oct13

BRAZILIAN AGRIBUSINESS OPPORTUNITIES

Page 10: Adding value in_food_industry_oct13

< 10 >

ROBERTO RODRIGUES (AGRÔNOMO, AGRICULTOR, MINISTRO DA AGRICULTURA)

FROM THE BOOK “AFTER THE STORM” - THE CHALLENGE IN THE FIELD

• Technology which generates competitiveness in the field need resources .

• It is necessary to analyze global trends in consumption of agricultural products . Who are the major producers and what will be its cost and productivity? ( Cost of land , mechanization and labor)

• The demand for better quality products , best price , taste , appearance , but also information on product origin , production methods , environmental impact on human and animal health .

• In 2010 the urban population exceeded the rural and 2030 there will be 8 Billion people, growing by 10 % every 10 years , with only 40 % living in the countryside .

• Growing life expectancy . In 2000 were 600 million people over 60 and in 2030 will be 1.4 billion.

• Brazil is the largest exporter of eight commodities ( Sugar , Coffee , Orange Juice , Soybeans , Beef , Poultry , and Tobacco Ethanol ) .

• Agribusiness is the largest sector of the Brazilian economy , representing 30 % of GDP , generates 37 % of jobs accounts for 40 % of exports .

Page 11: Adding value in_food_industry_oct13

< 11 >

• Top 10 Most Expensive Coffee in the World (Porto Rico, Rwanda, Hawai, El Salvador, Jamaica, Minas Gerais, Guatemala, Panama, Ilha St. Helena, Indonesia)

• Large companies: Kraft, Sara Lee, Procter & Gamble, Nestlé, Starbucks, Green Mountain Coffee Roasters, Reckitt Benckiser

• Café de Colombia, Espresso Italiano, Illy, Lavazza, capsule's, machines

• We will produce 56 Million bags 2012/13, which means 38% of the world ... (2nd 22Msc Vietnam / Indonesia 10Msc 3rd / 4th 8Msc Colombia)

• We export 60% and 21 MSc consume domestically, representing 15% of the world market.

• The average price of traditional coffee in 2011/12 was £ 403/sc for average production cost of U.S. $ 258/sc...margem R $ 2.4 / kg (156%)

• Export of roast and ground coffee is 1% of total

ARE BRAZILIANS LEADERS IN COFFEE?

WE PRODUCE VOLUME BUT NOT VALUED GOODS

Page 12: Adding value in_food_industry_oct13

Trung Nguyên CoffeeLegendee – VietnamSmall business in 1996 but now a gift for country all visiting tourists

< 12 >

• South America (100% Arabica) narrowed flavor range. Taste tests indicate that 70% of consumers respond better to mixed-species blends and thus Vietnamese blended coffee has a wider appeal than single-source, 100% Arabica.

• Roasting preferences establish decades ago favored a lower-temperature, longer roasting process. Burning coffee results in the breakdown of sugars and oils and fast oxidation and fermenting of coffee once exposed to the air. These drawbacks do not occur in the Southeast Asian dark roast, which is more stable.

Page 13: Adding value in_food_industry_oct13

< 13 >

FLAVOR DEVELOPMENT OPPORTUNITY

Page 14: Adding value in_food_industry_oct13

[GOOD] FOOD TRENDS

URBAN,

HEALTHY,

NATURE,

SUSTAINABLE,

TASTEFUL,

PREMIUM AND

MEANINGFUL FOR ME.

Page 15: Adding value in_food_industry_oct13

Urban population matched Rural before 2010

< 15 >

0,0

0,5

1,0

1,5

2,0

2,5

3,0

3,5

4,0

4,5

5,0

1950 1960 1970 1980 1990 2000 2010 2020 2030

Bil

es d

e p

esso

as

Rural

Urbana

Page 16: Adding value in_food_industry_oct13

For the moment we just need 1,5 our planet surfacePlantation Area vs. Population

< 16 > Fonte: FAO (2007). Elaboração: ICONE.

Page 17: Adding value in_food_industry_oct13

< 17 >

MANY URBAN TRENDS DETECTED (BY ENIVRANCE AND OTHER OBSERVERS)

ON THE STREETS IN 2005 ARE (STILL) BOOMING TODAY

Page 18: Adding value in_food_industry_oct13
Page 19: Adding value in_food_industry_oct13

“AMAZON”THE MOST POWERFUL

GIVEN BRANDby CONEXIDADE

Page 20: Adding value in_food_industry_oct13
Page 21: Adding value in_food_industry_oct13

Organic& Nature

< 21 >

Quality& Safety

SocialResponsibility

Premium Especial for ME Health

Page 22: Adding value in_food_industry_oct13

< 22 >

INDUSTRY TREND-SPOTTING IN AN EVER-CHANGING FOOD MARKET

Barry Callebaut6 Consumer Trends

Inova Market Insight10 Key Trends

Puratos Taste Tomorrow

10 Mega Trends

1. My Daily Luxury - "One minute of

pure delight - That's my daily luxury“

2. Smart & Convenient - "Smart ideas

make my life easier"

3. Virtuous simplicity - "Close to nature

is close to me“

4. My Food - "I take my food very

personal“

5. Human and local - "I love originals“

6. Respect and responsibility - "The

future is my responsibility, too"

1. Pure is the new natural

2. Green is given

3. Location, location, location

4. Premium stands out

5. Seniors get some attention

6. Forty is the new twenty

7. Grounded in science

8. Regulators force rethink

9. Um-measurable niches

10. Boom for protein

1. Food apocalypse versus food

utopia

2. Quality versus price

3. Storyselling

4. Global versus local

5. City brands

6. Tradition versus innovation

7. Meal mobility

8. Small pleasures, big health

9. Authentic bakery feel

10. Bakery superstars and super

bakeries

Page 23: Adding value in_food_industry_oct13

SOLUTIONS FOR FAT REPLACEMENT

HEALTHY

CARAVAN INGREDIENTS [CORBION PURAC]

Page 24: Adding value in_food_industry_oct13
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INNOVATION IS PARAMOUNT

Page 29: Adding value in_food_industry_oct13

Tudo está mudando...

... Muito rápido

E a gentenem percebe!

Page 30: Adding value in_food_industry_oct13

5 REGRAS PARA INOVAÇÃO DE SUCESSO

Page 31: Adding value in_food_industry_oct13

5. RESPEITE AS DIFERENÇAS REGIONAIS!5. RESPEITE AS DIFERENÇAS REGIONAIS!

A Classe A/B do Nordeste compra mais que a Classe C da Grande SP

E esses lares ainda tem renda 11% maior do que os gastos

O Centro-Oeste tem a maior renda do país!

Brasília tem a maior renda, porém a região tem o segundo maior % de classe D/E

Lares do Leste começam a se endividar com superfluos

Higiene, Lazer e Alimentação fora do lar tem gasto acima da média Brasil

Cariocas estão muito endividados!

Todas as classes gastam, pelo menos, 13% mais do que ganham

Classe D/E da Grande SP tem a segunda menor renda do Brasil!

Essa classe tem renda 7% abaixo da média e gasta 8% acima do que ganha

Interior de SP tem maior peso de Gastos Fixos do Brasil

61% do gasto dos lares já estão comprometidos, principalmente por gastos com transportes

Mais comida e bebida e menos produtos de beleza no Sul

Os lares do Sul gastam menos, tanto com produtos de higiene e beleza quanto com serviços estéticos.

5 REGRAS PARA INOVAÇÃO DE SUCESSO

Page 32: Adding value in_food_industry_oct13

INNOVATION IS PARAMOUNT