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Singapore Food and Drink Report Q4 2008
Business Monitor International, Nov 2008, Pages: 71
This Singapore Food Drink Report provides independent forecasts and competitive intelligence on Singapore's food and drink industry.
Despite the impact of food price inflation, and the possibility of slumping consumer demand, Singapore’s per-capita food consumption remained robust, at US$1,469.78 in 2007. However, we have slightly downgraded our future forecasts, and expect total food consumption to reach a value of US$7.96bn in 2012, representing a five-year growth rate of 15.6%.
Understandably, in the current environment of soaring food prices and falling consumer purchasing power it is likely to be premium brands that are hit hardest, with consumers downgrading to less expensive alternatives and sacrificing quality for cost. Nevertheless, such a situation has failed to impact on sales at Singapore Food Industries. In July 2008, the company announced strong results for the first six months of the year, with net profits increasing 29.5% to SGD18.2mn (US$12.88mn). This was primarily driven by the domestic market, which saw sales grow by 17.5%.
Meanwhile, despite the global economic difficulties there has still been some merger and acquisition activity involving Singaporean firms. In July 2008, food ingredients group Olam International acquired a 24.99% stake in New Zealand dairy processor Dairy Trust, in a deal worth just over NZD101mn (US$69.34mn). However, Olam has announced that it would not be making a bid for Australia’s Dairy Farmers. Olam had been linked to AUD920mn (US$849.9mn) bid for the dairy co-operative in April 2008.
Elsewhere, Singaporean food & beverage firm Fraser & Neave (F&N) has acquired the remaining 5% interest that it does not already own in Malaysian bottled water company Borneo Springs. The deal extends F&N’s dominance of the bottled water sector in Malaysia and Singapore. Bottled water is a segment for which this report forecasts good growth. Healthier beverages have benefited in recent years at the expense of carbonated drinks. Although, as bottled water becomes an increasingly mainstream product, we warn that firms will have to innovate in regards to their product offering to replicate recent successful expansion.
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Singapore Food and Drink Report Q3 2008
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