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Caribbean Food and Drink Report Q1 2011
Business Monitor International, Nov 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.
Industry View: The consumer outlook for the Caribbean will be shaped, to a large degree, by the sluggish return to economic growth, especially due to the flagging economies of the developed countries providing most of the region’s tourist numbers. While not all Caribbean economies are dependent on tourism, with evidence of some countries seeking to diversify their economic base, overall, the flagging tourism industry will have an impact on the performance of the region’s food and drink industry, as well as mass grocery retail (MGR) markets, as tourists more frequently purchase premium and value-added goods than the local population. This situation will be exacerbated by political and social tensions, which will discourage some tourists from coming to the Caribbean, while also detracting potential investors.
Headline Industry Data
2010 food consumption per capita (US$)/forecast growth to 2015 (local currency):
- Bahamas: US$1,292.0/+34.0%
- Barbados: US$863.5/+19.1%
- Dominican Republic: US$141.3/+31.2%
- Jamaica: US$155.6/+21.1%
- Puerto Rico: US$310.0/+18.0%
- Trinidad and Tobago: US$319.1/+13.2%
Key Company Trends
Sugar Industry Remains an Attractive Investment Proposition – In August 2010, the state-owned Sugar Company of Jamaica (SCJ), which amassed debts of US$220mn, sold off its remaining sugar factories to a Chinese company in a deal worth around US$9mn. The Complant International Sugar Industry Company is also required to modernise the factories and conduct a feasibility study for the building of a new refinery as part of the agreement. The Chinese company is expected to reap considerable benefits from the deal, in the light of zero-tariff ethanol exporting opportunities to the US, as well as due to recovering sugar prices over the past months. Earlier in the year, UK-based ingredients producer Tate & Lyle entered into a marketing agreement with the Jamaican government for the provision of 100,000 tonnes of sugar, indicating that the sector remains relatively dynamic.
Key Risks to Outlook
Combination of Economic, Political and Social Instability Uncertainty – Economically speaking, heavy debt burden, high rates of unemployment, combined with flagging tourism in the region, due to slowdown in US and European economies, will continue to pose risks to GDP growth of most of the Caribbean nations, and thus the development of the higher value-added segments of their food, drinks and MGR markets. In addition, a number of states in the region are facing increased political and also social risks, related to factors such as the need to reduce state expenditure, eradicate corruption and deal with alarming rates of violent crimes, which are also negatively impacting on the attractiveness of the Caribbean in terms of FDI and foreign presence in general.
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