Boston, MA -- (SBWire) -- 07/12/2013 --We believe Colombia's economy will continue to expand at a robust rate over the coming years, driven by an improving consumer story and strong investment into the country's hydrocarbons and infrastructure sectors. We anticipate gradual improvements in private consumption over the coming years, following slower household spending growth in 2012, on account of household deleveraging cycle, the impact of which we now believe to be fading. All those factors bode well for the development of the country's food and beverages markets, especially in regards to premium segments, and as income disparities lessen.
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Headline Industry Data (in local currency)
- 2013 per capita food consumption = +6.61% year-on-year (y-o-y); five-year forecast compound annual growth rate (CAGR) to 2017 = +8.12%.
- 2013 alcoholic drink sales = +5.20%; forecast CAGR to 2017 = +5.89%.
- 2013 soft drink sales = +5.69%; forecast CAGR to 2017 = +8.79%.
- 2013 mass grocery retail sales = +8.34%; forecast CAGR to 2017 = +9.92%.
Key Company Trends
Colombian Coffee To Benefit From Central America's Coffee Rust Crisis: The International Coffee Organization (ICO) is expecting a rebound in the price of coffee for Colombian crops by the end of the year on account of the decimated crop across Central America, caused by the leaf rust fungus. Nevertheless, Colombian coffee crop prices fell to a three-year low in March 2013, with the ICO only expecting a rebound in the latter parts of the year owing to stock-piling by Brazilian farmers, who reportedly held out for better prices. Once the Brazilian stock has been moved , Colombian coffee will be able to fill the gap and thus demand higher prices. Therefore, Bloomberg expects coffee volumes of exports from Colombia to increase by 30% y-o-y.
Jeronimo Martins Opens First Colombian Stores: In March 2013, Jeronimo Martins, Portugal's largest retailer, opened its first five Colombian stores in the city of Pereira. Signalling the retailer's commitment to diversification beyond maturing European markets, it aims to have approximately 40 stores under its Ara banner by the end of 2013. Presenting ample opportunity for Jeronimo moving forward, the launch of its Latin America operations reflect a wider pattern of European retailers entering developing markets, prompted by a subdued consumer outlook and slowing domestic growth at home. The company may also look for acquisitions in order to become one of Colombia's top three retailers. Jeronimo has reportedly allocated EUR400mn for its expansion in Colombia over the next two years. However, entering the market organically, the company will not benefit from the expertise of a local player and will face competition from Chilean retailer Cencosud and Colombia-based Almacenes Exito.
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Colombia Food & Drink Report Q3 2013 - New Market Research Report
New Food research report from Business Monitor International is now available from Fast Market Research