Zimbabwe Food and Drink Report 2010
Business Monitor International, January 2010, Pages: 38
Zimbabwe 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 Zimbabwe's food and drink industry.
Once the envy of most sub-Saharan African states as it carried much of Africa’s post-colonial regeneration on its once-broad shoulders, fortified by a bustling economy and high literacy, Zimbabwe’s star plummeted over the past twenty years with the last ten particularly unforgiving. With GDP growth of 4.6% estimated for 2009 (Zimbabwe’s best performance since 1996), a functional (albeit delicate) unity government in place and perhaps most importantly, from a fast-moving-consumer-goods point of view, hyperinflation out of the picture after the Zimbabwe dollar was replaced by the US dollar, 2009 could one day be known as the year Zimbabwe turned the corner as discussed in BMI’s recently published Zimbabwe Food & Drink Report for 2010.
The overdue decision to drop the Zimbabwean dollar is spurring on private consumption while domestic and foreign (mostly South African) companies alike are beginning to invest again. Leading domestic food processors (those that have managed to survive) like Cairns Holding have increased capacity utilisation to above 30% in 2009 on the back of strengthened sales volumes. The turnaround has been marked bearing in mind that Cairns operated at less than 10% in 2008 as hyperinflation and government imposed price controls in particular decimated the industry.
Unsurprisingly, beer sales strengthened considerably in 2009. Delta Corporation, Zimbabwe’s leading brewer and soft drinks producer, announced its intention to invest US$150mn to dramatically increase its production capacity by 2014. Counting on the brewing giant SABMiller (36%) and UK-based Old Mutual (28%) as its main shareholders, Delta has a market share in excess of 90% and 85% in beer and soft drinks according to Zimbabwe-based newspaper The Herald. Expectedly, a large part of Delta’s investment kitty will be used to restore underutilised equipment to push capacity rather than installing new technology. It is aiming to increase its capacity to 10mn hectolitres (includes soft drinks production) from its current level of 2.2mn hectolitres by 2014.
Zimbabwe’s mass grocery retail (MGR) industry provides further evidence of the atypical state of its fastmoving- consumer-goods industry. Organised retail is well established by regional standards. While most regional markets (barring Botswana, Namibia and South Africa in particular) have one or at best two organised multi-store retail chains, Zimbabwe has more than five.
Shifting back to our macroeconomic outlook, to 2019 BMI expects GDP growth in Zimbabwe to average 8% as the economy recovers some of the productivity lost over the past decade. Over the first phase (up until about 2014), growth is likely to be particularly rapid largely because there is so much spare capacity in the economy. Over the second, expansion is likely to slow down as a significant proportion of the lost productivity is regained. Crucially, we expect inflation to hold steady at about 4% over the period. While we hold a sanguine long-term economic view, we do caution that Zimbabwe remains an immensely hazardous market with the greatest downside risk being the durability of the fragile unity government. Should it fail to hold, the recovery process that took shape in 2009 could unfold. On the regulatory front, the government’s decision to place Meikles (owner of the leading TM supermarket banner) into state administration under anti-corruption laws in September 2009 was a stark reminder of the business environment risks firms operating in Zimbabwe must take onboard.
Executive Summary
SWOT Analysis
Zimbabwe Food Industry SWOT
Zimbabwe Drink Industry SWOT
Zimbabwe Mass Grocery Retail Industry SWOT
Macroeconomic outlook
Zimbabwe – Economic Activity
Food
Industry Forecast Scenario
Industry Developments
Market Overview
Agriculture
Food Production
Table: Manufacturing Production Index by Sub-sector, Base year 1990 = 100
Drink
Industry Forecast Scenario
Alcoholic Drinks
Soft Drinks
Industry Developments
Market Overview
Alcoholic Drinks
Soft Drinks
Mass Grocery Retail
Industry Forecast Scenario
Table: Zimbabwe Income Distribution by Wealth Tier
Industry Developments
Market Overview
Competitive Landscape
Key Players
Table: Key Players in Zimbabwe’s Mass Grocery Retail Industry
Table: Key Players in Zimbabwe's Food & Drink Sector
Company Analysis
Mass Grocery Retail
Meikles (TM)
OK Zimbabwe
Food
Dairiboard Zimbabwe Ltd (DZL Holdings)
Cairns Foods Ltd
Drink
Delta Beverages
Appendix
Country Snapshot: Zimbabwe Demographic Data
Section 1: Population
Table: Demographic Indicators, 2005-2030
Table: Rural/Urban Breakdown, 2005-2030
Section 2: Education And Healthcare
Table: Education, 2000-2003
Table: Vital Statistics, 2005-2030
Section 3: Labour Market And Spending Power
Table: Employment Indicators, 1997 And 1999*
Table: Average Annual Manufacturing Wages, 1996-2002
BMI Methodology
BMI Food & Drink Industry Glossary
Food & Drink
Mass Grocery Retail
BMI Food & Drink Forecasting & Sourcing
How We Generate Our Industry Forecasts
Sourcing
- Meikles (TM)
- OK Zimbabwe
- Dairiboard Zimbabwe Ltd (DZL Holdings)
- Cairns Foods Ltd
- Delta Beverages
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