adding value in_food_industry_oct13

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

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  • 1. ADDING VALUE IN FOOD INDUSTRY Update by CONEXIDADE October 2013
  • 2. 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 hcgouvea@hotmail.com CONEXIDADE +5511972671139
  • 3. WORLDWIDE AND BRAZILIAN FOOD MARKET
  • 4. 7 Billion People Expend USD 7 Trillion in FOOD FOOD SERVICE (40%) RETAIL (60%) Conv. Store [$70] Gas Station [$50] Other [$50] $ 4.200 $ 2.800 Purchase Purchase Health Health Travel Travel Hospitals e Clinics [$100] 20% [$560] 6% [$170] Work Work Catering [$40] Consumers Hotls, Resorts, SPAs [$200] Offices, Industries [$300] Leisure Leisure Education Education Sports e Leisure, Parks [$40] Schools , Universities [$160] Commercial Commercial 64% [$1.800] Hotels Hotels Restaurants [$700] Fast Food [$500] Coffee & Bakery [$300] Street [$250] Vending [$50] 10% [$280]
  • 5. Supply Chain Overview Industry, Distributor, User and Consumer but either Technology Supplier, Volume Supplier and Brand Owners Retail Brands Functional Ingredients & Flavors Store Brands Commodities Restaurant Brands
  • 6. FOOD SERVICE leads Brazilian market growth in the last 17 years Brazilian food market size at manufacturer value (R$ billions) Nominal Real CAGR CAGR (95-04) (95-04) 150 130 116 101 100 58 50 12 64 13 70 14 77 18 89 83 87 26 12.6% 4.7% 8.4% 30 0.8% 22 22 24 59 61 63 66 51 56 46 0 34 75 87 96 Food Service Retail 95 96 97 98 99 00 01 02 03 04 FOOD SERVICE grows at 14% per year and RETAIL at 10% in last 17 years
  • 7. Out Of Home / In Home: from 25% (class DE) to MENOS BRASILEIROS COMENDO FORA DE CASA... 40% (class AB) and OOH growing faster ALIMENTAO E BEBIDA DENTRO DO LAR 2012 2011 Penetrao 100% Gasto Mdio R$ 5.590 6.075 2011 100% Classe AB Classe C Classe DE R$ 7.721 R$ 5.884 R$ 5.166 ALIMENTAO E BEBIDA FORA DO LAR +9% Gasto Mdio R$ 127 (ndice de gasto) Classe AB 97 Classe C 85 Classe DE Fonte: HolisticView 2013 Kantar Worldpanel 87% Penetrao 2012 82% 1.657 1.891 R$ 3.049 R$ 1.665 R$ 1.238 +14% 161 (ndice de gasto) 88 65
  • 8. Brazilian FOOD SERVICE Market R$ 100 Billion Size but Client Users With Different Needs and Expectations 100% 27 Frozen Culinary 80 60 Oils & Fats Bakery F&V 17 Desserts Dairy 14 13 Dairy Frozen Culinary Oils & Fats Oils & Fats Meat, poultry& seafood 23 Desserts Culinary Frozen Bakery F&V Culinary Bakery F&V Meat, Meat, poultry& poultry& seafood seafood 0 Restaurants Staples Staples Bakeries Bars Staples Dairy Frozen Culinary F&V Meat, poultry& seafood Meat, poultry& seafood 20 Staples 14 Oils & Fats Bakery F&V 40 5 Staples Snack Hotels Catering Bars Staples Others Fast CVS Food
  • 9. BRAZILIAN AGRIBUSINESS OPPORTUNITIES
  • 10. ROBERTO RODRIGUES (AGRNOMO, 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 . < 10 >
  • 11. ARE BRAZILIANS LEADERS IN COFFEE? WE PRODUCE VOLUME BUT NOT VALUED GOODS 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. Top 10 Most Expensive Coffee in the World (Porto Rico, Rwanda, Hawai, El Salvador, Jamaica, Minas Gerais, Guatemala, Panama, Ilha St. Helena, Indonesia) 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%) Large companies: Kraft, Sara Lee, Procter & Gamble, Nestl, Starbucks, Green Mountain Coffee Roasters, Reckitt Benckiser Caf de Colombia, Espresso Italiano, Illy, Lavazza, capsule's, machines Export of roast and ground coffee is 1% of total < 11 >
  • 12. Trung Nguyn Coffee Legendee Vietnam Small 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.
  • 13. FLAVOR DEVELOPMENT OPPORTUNITY < 13 >
  • 14. URBAN, HEALTHY, NATURE, SUSTAINABLE, TASTEFUL, PREMIUM AND MEANINGFUL FOR ME. [GOOD] FOOD TRENDS
  • 15. Urban population matched Rural before 2010 5,0 Bilhes de pessoas 4,5 4,0 Rural 3,5 3,0 2,5 Urbana 2,0 1,5 1,0 0,5 0,0 1950 1960 1970 1980 1990 < 15 > 2000 2010 2020 2030
  • 16. For the moment we just need 1,5 our planet surface Plantation Area vs. Population < 16 > Fonte: FAO (2007). Elaborao: ICONE.
  • 17. MANY URBAN TRENDS DETECTED (BY ENIVRANCE AND OTHER OBSERVERS) ON THE STREETS IN 2005 ARE (STILL) BOOMING TODAY < 17 >
  • 18. AMAZON THE MOST POWERFUL GIVEN BRAND by CONEXIDADE
  • 19. Organic & Nature Quality & Safety Social Responsibility Premium Especial for ME Health < 21 >
  • 20. INDUSTRY TREND-SPOTTING IN AN EVER-CHANGING FOOD MARKET Barry Callebaut 6 Consumer Trends 1. My Daily Luxury - "One minute of pure delight - That's my daily luxury 2. Smart & Convenient - "Smart ideas Puratos Taste Tomorrow 10 Mega Trends Inova Market Insight 10 Key Trends 1. Pure is the new natural 2. 1. Green is given Food apocalypse versus food utopia 2. Quality versus price 3. Storyselling 4. Global versus local 3. Location, location, location Virtuous simplicity - "Close to nature 4. Premium stands out is close t