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Kazakhstan Food and Drink Report Q1 2012
Business Monitor International, Nov 2011, Pages: 79
Kazakhstan 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 Kazakhstan's food and drink industry.
Kazakhstan’s attractiveness to foreign food and beverage manufacturers is considerable on account of the country’s economic development and a favourable demographic outlook. We expect that the nascent mass grocery retail industry will continue to expand outside the major urban areas, providing more opportunities for discretionary purchases by a gradually better-off population. While consumers are expected to remain relatively price-sensitive in the shorter term, novelty and premium products – mostly imported – should be well received by the growing middle class.
Headline Industry Data (local currency, compound annual growth rate)
- 2011 per capita food consumption: +10.1%; forecast to 2016: +11.1%
- 2011 alcoholic drink value sales: +12.6%; forecast to 2016: +12.5%
- 2011 soft drink value sales: +12.8%; forecast to 2016: +13.2%
Key Industry Trends And Developments
Beer Market Attracting Foreign Players: Kazakhstan’s beer market is viewed as an attractive longer-term proposition. This view is supported by the September 2011 news that Central and Eastern European brewing major StarBev is to expand to Kazakhstan and 14 other new markets over the next two years. StarBev is planning to launch its flagship product Staropramen in those new markets as it looks to diversify from the markets struggling in the aftermath of recession.
Bottled Water Performing Well: Kazakhstan’s bottled water market has continued to grow despite a decline in the segment in the US and Europe, with consumers benefiting from an extensive range of options. Nevertheless, with individual consumption of pre-packaged water at around 15 litres annually in Kazakhstan, the country’s consumption is still significantly below that of Western Europe.
Key Risks To Outlook
Downside Risks: Risks to the downside are based on the country’s reliance on exports of natural resources for economic growth, which makes it vulnerable to commodity price crashes. Additionally, Kazakhstan’s current political scene – an ageing autocratic president and the lack of an obvious successor – highlights its weak long-term political outlook.
Upside Risks: Upside risks to our forecasts are provided by the expansion of the Islamic finance industry in Kazakhstan. Such developments bode well for further inflows of foreign direct investment into the country. Foreign direct investment levels have already been boosted significantly over the past years, providing an impetus going forward.
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