|
|
 |
|
Viewing report
|
|
|
|
Israel Food and Drink Report Q1 2010
Business Monitor International, Jan 2010, Pages: 56
Israel Food and Drink Report provides industry professionals and strategists, corporate analysts, food and drink associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Israel's food and drink industry.
Israel’s economy performed resiliently in 2009. Estimated to have contracted by 0.1%, full-year GDP performance compares well to similarly developed states. As discussed in the recently published Israel Food & Drink Report for 2010, the country’s leading food processors also showed resilience despite the tough economic headwinds.
One of Israel’s largest food and drink companies with an annual turnover in excess of US$1.6bn, Strauss Group had a busy 2009. In November, it reported a 75% year-on-year (y-o-y) decline in third quarter net income to ILS62mn (US$16.5mn) and a 1.4% y-o-y drop in sales revenue to ILS1.62bn (US$428mn). While the decline in earnings was marked, base-effects are believed to be behind the sharp fall. Strauss sold a 25.1% stake in its coffee operations to TPG Capital in September 2008 which inflated Q308 earnings by US$75mn.
The fact that foreign markets account for about 45% of Strauss’ annual sales revenue has helped it through the downturn. Despite sharp declines in consumer confidence both domestically and abroad, Strauss reported first quarter organic sales growth of 6.3% y-o-y. Although the near-term sales buffer provided by such diversification is an important consideration and a reflection of the strength of the diaspora, it is the long-term assurances it provides that is particularly significant bearing in mind that Israel’s food industry is rapidly maturing. To 2014, the authors expect headline food consumption to increase by just 10% to ILS71.81bn.
On the non-organic front, the downturn has not overly restricted Strauss’ ability to finance expansion. In July 2009, it acquired the UK-based water purifier company Tana Industries for a reported ILS291mn (US$73mn) as it continued to stretch out its business. Other notable food companies also performed well in 2009. Nestlé’s Israeli unit Osem Investments reported second quarter net income of ILS57.7mn (US$15.2mn); boosted by acquisitions and the outperformance of Nestlé’s brands, sales revenue climbed by an encouraging 7.3% y-o-y to ILS844.6mn.
Much more reliant on the domestic market than leading food companies like Strauss, Israel’s two dominant mass grocery retailers (MGR) Shufersal and Blue Square have felt the downturn more sharply. Market leader Shufersal reported a 1.6% y-o-y decline in third quarter same-store sales; revenues performed better, decreasing by 0.3% y-o-y to ILS2.88bn. Despite weaker sales, Shufersal reported a 6.8% y-o-y spike in net income to ILS63mn, largely attributed to lower overheads.
Number two Blue Square found trading conditions tougher. First half same-store sales declined 6.8% while sales revenues slipped 3.5% y-o-y to ILS3.61bn. Although the authors expect trading conditions to improve in 2010 on the back of forecast GDP growth of 2.6%, similar to our headline food consumption forecast, we are expecting only modest growth in MGR sales to 2014. Between 2010 and 2014, headline sales are expected to increase by just 6.96% to ILS17.5bn. However, our estimate that up to 35% of grocery sales are still accounted for by independent retailers will encourage Shufersal and Blue Square.
Product samples
A sample for this product is available. Please Login/Register to download this sample.
Customers who bought this item also bought
Israel Food and Drink Report Q1 2012
Israel Food and Drink Report 2009
Food Retail in Israel
Hungary Food and Drink Report Q4 2010
Kazakhstan Food and Drink Report Q2 2012
Qatar Food and Drink Report Q3 2010
Turkey Food and Drink Report Q4 2010
Chile Food and Drink Report Q4 2010
Turkey Food and Drink Report Q1 2011
Bakery Products in Israel
|
|
|
|
