Fast Market Research recommends "Philippines Food & Drink Report 2013" from Business Monitor International, now available

Boston, MA -- (SBWire) -- 03/19/2013 --BMI View: While the Philippines' economy continues to expand at a healthy rate, and despite its expanding base of young consumers, we remain relatively pessimistic about the near-to-mid-term potential of its grocery and food and drink markets. Multinational investment has been slow to penetrate the market, which in itself continues to present numerous challenges to players in the sectors. Issues such as widespread poverty, highly uneven income distribution, underdeveloped mass grocery retail networks and high levels of unemployment will continue to weigh on the consumer outlook.

Headline Industry Data (local currency)

- 2013 per capita food consumption = +4.32%; compound annual growth rate (CAGR) forecast to 2017 = +4.16%
- 2013 alcoholic drinks value sales = +7.19%; CAGR growth forecast to 2017 = +6.86%
- 2013 soft drinks value sales = +7.20%; CAGR growth forecast to 2017 = +7.75%
- 2013 mass grocery retail sales = +6.92%; CAGR growth forecast to 2017 = +6.85%

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Industry Developments

General Mills Pulls out of the Philippines: In July 2012, US food giant General Mills announced that it is pulling out of the Philippines, having operated in the market for 12 years. The firm cited the unit's poor performance, with General Mills Philippines stating that it 'can no longer sustain our business in the increasingly challenging environment we face'. The move will see the firm shut its Haagen-Dazs cafes and will also see brands such as Gold Medal, Green Giant, Nature Valley, Pillsbury and Betty Crocker disappear from shelves. This move comes despite General Mills' aim to build its emerging market exposure. It highlights the relative unattractiveness of emerging markets where growth is less dynamic and where consumer demand, at the premium end in particular, has been slower to take hold.

Japanese FamilyMart Targets the Philippines: In January 2012, reports emerged that Japanese convenience store retailer FamilyMart plans to open around 600 outlets in Indonesia and the Philippines by 2015, targeting expansion away from its domestic market, as an ageing population weighs on the growth prospects of the Japanese mass grocery retail sector. In fact, in September 2012, real estate giant Ayala Land Inc was reported to have put aside PHP300mn for the opening of 100 FamilyMart outlets. In 2013, the company is planning to open 30 stores, at a cost of PHP80mn. In the project, Ayaya is partnering Rustan's and Japanese conglomerate Itochu (which is the main shareholder in FamilyMart). The FamilyMart network is expected to provide strong competition to Philippines Seven - a 7-Eleven franchisee in the Philippines - and the other leading convenience player in the country, Mini Stop, which is run by the Gokongwei group.

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