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Central America Food and Drink Report Q1 2012
Business Monitor International, Jan 2012, Pages: 102
Business Monitor International's Central America 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 Central America's food and drink industry.
Growth in organised retailing is playing a major role in the development of Central America’s consumer sector, with the local unit of US retailer Walmart currently the driving force behind this expansion. Walmart is the undisputed market leader in Central America, and BMI sees no sign of this changing over the forecast period, as a sustained investment programme will only strengthen its position. The retailer’s dominance could have negative implications for the region’s consumer sector over the longer term, and also on mass grocery retail market competition. In a market where less than 50% of food sales are made through organised channels, the continued development of the mass grocery retail sector will be a key factor driving the consumer segment.
Headline Industry Data (regional averages)
- 2012 per capita food consumption (US$) = +5.0%; forecast to 2016 = +28.3%
- 2012 alcoholic drink sales (litres) = +6.2%; forecast to 2016 = +35.5%
- 2012 soft drink sales (litres) = +5.3% ; forecast to 2016 = +30.8%
- 2012 mass grocery retail sales (US$) = +6.0%; forecast to 2015 = +35.0%
KEY COMPANY TRENDS
Costa Rican Farmers Setting Up Micro-Processing Plants To Sell Coffee Directly:
A growing number of coffee farmers in Costa Rica are setting up their own micro-processing plants in a bid to serve international buyers directly, reports CentralAmericaData. The Instituto del Café de Costa Rica (Icafé)’s figures revealed that the number of processing plants has increased to 161 in 2011 from 94 in 2010. According to Marvin Barquero, the establishment of micro-processing plants allows small coffee farmers to sell directly to roasters on the international market by skipping exporters. Information from Icafé shows that the processing plants are enabling farmers to receive up to US$100 more per quintal (46 kilos) of processed coffee.
Walmart Opens New Discount Format:
In December 2011 mass grocery retailer Walmart de México opened a new store in El Salvador under the banner Maxi Despensa. The discount-focused store is targeted at lower-income consumers, and the new format demonstrates the firm’s renewed focus on its ‘everday low pricing’, which is designed to attract a greater customer base to its network. The launch in El Salvador follows the opening of the firm’s first Maxi Despensa outlet in Honduras in November 2011.
KEY RISKS TO OUTLOOK
Political Risk:
For some Central American markets, political risk is a significant factor for consideration. Central America remains one of the worst-affected areas in the world in terms of non-political violence, and BMI is concerned particularly about the potential for unrest in countries such as Honduras, Nicaragua and Guatemala. These states are among the poorest in the region and share the potentially explosive combination of high unemployment, youthful populations and stark inequality, as well as a high proportion of income spent on food and energy.
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