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Caribbean Food and Drink Report Q4 2010
Business Monitor International, Aug 2010, Pages: 90
Caribbean 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 the Caribbean's food and drink industry.
Those Caribbean countries that are heavily reliant on the tourism industry have found it more difficult to shake off the effects of the economic downturn, especially given the sluggish return to growth in the key European and American markets that provide most of their tourists. This, coupled with high levels of debt and elevated inflation, will continue to cast a shadow over the coming years’ food and drinks value growth, especially as foreign direct investment (FDI) in the mass grocery retail (MGR) industry will be deterred by the lack of immediate rewards. On the other hand, some countries – such as the Dominican Republic – are proactively diversifying their economic bases, a lead that may be followed by their peers, resources permitting.
Headline Industry Data
2010 food consumption per capita/forecast growth to 2014 (local currency):
- Bahamas: US$1,328.0/+27.6%
- Barbados: US$863.5/+13.2%
- Dominican Republic: US$139.7/+24.7
- Jamaica: US$155.6/+20.8%
- Puerto Rico: US$310.0/+14.7%
- Trinidad and Tobago: US$319.1/+15.6%
Key Company Trends
Sugar Industry in the Spotlight – Over the past months, the government support for the sugar industry in Barbados and in Jamaica came to the fore. In the former, government backing of the sector is viewed as crucial to its survival. Given the need to diversify industrial sectors, which provide a degree cushioning against external forces, this support is likely to continue. Similarly, in Jamaica, although sugar is perhaps Jamaica's strongest agricultural sub-sector, much needs to be done to realise potential to become the main supplier to Caribbean community (Caricom) countries. An investment from UK-based ingredients producer Tate & Lyle – which recently entered into a marketing agreement with the government for the provision of 100,000 tonnes of sugar – could be a step in the right direction.
Key Risks to Outlook
Economic Uncertainty – Although the Caribbean is not a homogenous food and drinks market, the fact that most of the region remains heavily debt-ridden poses downside risks to our consumer outlook. While we expect that debt will be more successfully managed in the medium term, this will be reliant on the successful implementation of the governments’ fiscal stabilisation strategies. Moreover, as European economies are grappling with the effects of debt overhang and deflation and the US is already showing signs of another slowdown in economic activity, the outlook for tourism and FDI into the Caribbean does not look overly positive, with clear implications for food values growth.
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