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Caribbean Food and Drink Report Q1 2012
Business Monitor International, Nov 2011, Pages: 131
Business Monitor International's 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 Caribbean's food and drink industry.
Within the Caribbean there are several markets, including the Dominican Republic and Trinidad and Tobago, which have bounced back much swiftly from the global economic downturn. In the Dominican Republic, the economy is being boosted by a number of major mining projects that are set to boost exports and should eventually have a significantly wider impact on affluence throughout the country.
The strength of the consumer in the Dominican Republic, linked to increasing personal wealth across the country, is likely to attract considerable investment into retail-focused sectors, including food and drink and financial services.
Another market with a favourable outlook in the region is Trinidad and Tobago, which has also managed to move beyond tourism thanks to its energy reserves. High international energy prices, as well as strong regional and US demand for the country’s main energy exports, liquefied natural gas and oil, are expected to keep a floor under growth and drive up local income and consumption.
Headline Industry Data:
2011 food consumption per capita/forecast 2012 growth/forecast compound annual growth rate (CAGR) to 2016 (all in US dollar terms):
- Bahamas: US$1,831/+2.3%/2.4%
- Barbados: US$1,174/+2.8%/+3.0%
- Dominican Republic: US$249/+14.9%/+8.2%
- Jamaica: US$292/+3.7%/+6.3%
- Puerto Rico: US$954/+3.0%/+5.6%
- Trinidad and Tobago: US$1,111/4.3%/+5.0%
Key Company Trends
US Red Stripe Stripped Out Of Jamaica: In October 2011, Diageo delivered a blow to the Jamaican drinks industry by announcing that Red Stripe beer destined for the US market will no longer be brewed in Jamaica but instead on the US mainland. While its Jamaican subsidiary Desnoes & Geddes (D&G) will continue to brew Red Stripe in Jamaica for Brazil, Canada and some parts of Europe, the sizeable scale of US exports will mean the move will have a significant impact on the local brewing sector. The chairman of D&G, Richard Byles, revealed the firm is planning to cut output at its Kingston brewery by up to 3.5mn cases and eliminate 70 jobs.
CL Financial's Angostura Loses CEO As Lascelles Is Subject To Takeover Bid: In September 2011, Trinidad & Tobago based drinks firm Angostura parted company with its CEO and Managing Director Wayne Yip Choy following a contract dispute. The dispute is reported to relate to an incentive compensation claim worth TTD20mn that was tied to Angostura's financial performance. Angostura is a subsidiary of the CL Financial Group, one of the largest conglomerates in the region but a major victim of the global credit crisis that had to be bailed out by the Trinidad & Tobago government, which has now assumed control of the business under a rescue plan. This setback comes despite Angostura's financial performance indicating that the unit has turned a corner, having moved back towards profitability in 2010 with sales also moving in the right direction.
Key Risks To Outlook
Different Prospects for Individual Caribbean Markets: Given that the Caribbean is not a homogenous food and drinks markets, risks are on both upside and downside in relation to individual countries surveyed. For example, given that tourism continues to account for a significant proportion of economic activity in Jamaica, improved international perceptions of the island are likely to bode well for real GDP growth and thus also for consumer outlook. Furthermore, on the domestic front, this is likely to encourage greater investment into both hotel and transport infrastructure from the private sector.
On the other hand, in Puerto Rico, one of the largest regional food and drinks markets, while huge structural reforms have dramatically improved the island’s fiscal outlook, growth is set to remain weak, especially as the authorities aim to rein in public sector spending.
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