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Europe Food & Beverage Sectors : A Company and Industry Analysis (August 2008)

  • ID: 656127
  • Report
  • August 2008
  • Region: Europe
  • 36 pages
  • Mergent
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This report updates the previous European food and beverage report, focusing on the markets in Denmark, France, Germany, Italy, Spain and the United Kingdom
Current Environment - Key Points
- In the first half of 2008, the sector experienced weaker sales and profit growth against a backdrop of sharp rises in commodity, oil and energy prices, as well as rising inflation and interest rates
- Food manufacturers in Europe faced significant headwinds from high raw material prices which squeezed margins
European food and beverage (F&B) companies reported slower sales and profitability growth in the first half of 2008, as demand eased slightly
- The F&B stock market was sluggish over the six months from January 3, to May 16, 2008, with investors bailing out of the market
- Most leading companies reported mixed financial results in the second half of 2007 and the first quarter of 2008
- Merger and acquisition activity in Europe maintained its momentum over the last six months, albeit slower, highlighting F&B companies- abilities to push ahead with plans to expand

Industry Profile - Key Points
- The value of EU F&B exports and imports rose in 2007 as a result of growing consumer demand; this was driven by rising incomes, population growth and greater ethnic diversity
- The F&B industry is Europe's largest manufacturing sector, employing 4.1 million Europeans and accounting for -870 billion (US$1.37 trillion) of total manufacturing turnover in 2007
- Denmark, Germany, France, Italy, Spain and the UK are the leading F&B producers in the EU, representing two thirds of sector turnover
- Investment levels in the European F&B industry maintained momentum in 2007, helping to stimulate economic activity, generate employment and sustain the industry's competitiveness
- Some companies maintained their R&D capability to develop and test any potential new products, while some engaged in strategic alliances
- European F&B companies- approach to R&D generated several large-scale investments in the industry over the past six months
- Several new laws and regulations were introduced in 2007, aimed at protecting and encouraging industry growth
Market Trends and Outlook - Key Points
- Most F&B firms are absorbing higher energy, commodity and packaging costs, but are still struggling to do so
- Rising production costs is forcing F&B manufacturers to seek ways to reformulate their ingredient listings in certain products, to offset the potential for losses
- A growing awareness of the importance of maintaining good health is a major factor driving the trend towards healthier sugar and confectionery products in Europe
- The trend to reposition sugar and confectionery products as a premium, indulgent but healthy food item is picking up and will accelerate in the coming year
- European economic growth is likely to remain anemic in 2008 but prospect for the industry appears promising
- Export competitiveness will be slightly hindered by rising prices and currency fluctuations
- Investors are expected to opt for companies with the strongest propensity to stay firm amid the vagaries of the stock markets.
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Current Environment - Sector Overview - Sector Performance - Leading Companies - Merger and Acquisition Activity Industry Profile - Industry Size and Value - Industry Focus - Research and Development - Policy and Regulatory Environment Market Trends and Outlook - Health-oriented Sugar and Confectionery Gains Popularity - Food Costs Continue to Rise - Market Outlook Country Profiles - Denmark - France - Germany - Italy - Spain - United Kingdom Currency Conversion Table The Scope of This Report Key References Comparative Data Reports Coverage
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