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Recently Released Market Study: Chile Food & Drink Report Q1 2014

Recently published research from Business Monitor International, "Chile Food & Drink Report Q1 2014", is now available at Fast Market Research


Boston, MA -- (SBWIRE) -- 01/07/2014 -- We expect growth to slow in the Chilean economy over the next year as increases in annual GDP per capita reach their lowest rate for four years at 3.4%. This will have an impact on the spending patterns of consumers, an effect common across much of Latin America. Private consumption is therefore forecast to grow at 4.0% in 2014 compared with 6.1% and 4.7% in 2012 and 2013 respectively. However, we expect to see per capita food consumption increase to US$1,706 in 2014, up 5.6% on 2013. With inflation at around 3.2% for the period, this represents real growth in food consumption as the market continues to develop and offers new products to the consumer class.

Headline Industry Forecasts (local currency terms)

- 2014 per capita food consumption growth = +5.6% year-on-year (y-o-y); compound annual growth rate (CAGR) to 2017 = +5.7%.
- 2014 alcoholic drinks value sales = +5.5%; forecast CAGR to 2017 = +5.7%.
- 2014 soft drinks value sales = +7.1%; forecast CAGR to 2017 = +7.0%.
- 2014 mass grocery retail value sales = +5.6%; forecast CAGR to 2017 = +5.8%.

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Key Company Trends

Cencosud Sacrificing Short-Term Profitability: Chile-based Latin American food retail giant Cencosud has been working hard to diversify its business over recent years, with the most recent high-profile example coming in October 2012 as the company reached an agreement to acquire Carrefour's assets in Colombia for US$2.6bn. This move was largely debt-financed (JP Morgan loaned the retailer about US$2.5bn) and inevitably had a negative effect on the company's short-term profitability given increased financing costs. Indeed, in the first quarter to March 2013, excluding a one-time provision expense, Cencosud's net income was down 26% y-o-y.

Andina's Net Profits Decline In FY12: In March 2013, Coca-Cola bottler and beverage company Embotelladora Andina posted a 9.7% y-o-y decline in net profits for FY12, reporting them at CPL87.64bn (US$185.4mn). The results released by Andina were consolidated to take into account Q412 figures of Embotelladoras Coca-Cola Polar. The amalgamated company's sales went up by 19.3% y-o-y to CPL1.172trn (US$2.47bn). In April 2013, Andina announced that it plans to invest US$350mn for the year, which will go towards its Brazilian plant and maintenance work Concha y Toro 2013 Profits Hit: In April 2013 local wine major Concha y Toro reported that its full-year net profits for 2012 dropped 40.5% y-o-y to CLP30.02bn (US$63.5mn). Operating profits for the year were down 9.1% y-o-y to CLP53.68bn. That said, net sales increased by 6.6% for the year to CLP450.4bn, making up in part for weak domestic demand. Asian sales were particularly strong, up 21% y-o-y.

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