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Chile Food and Drink Report Q2 2012

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					Chile Food and Drink Report Q2 2012
Published : March 2012                No. of Pages : 112                Price:US$530




Despite the fact that its population does not exceed 18mn, we continue to view Chile as the second most
attractive market in Latin America, after Brazil, partly owing to its favourable regulatory
environment.However, economic slowdown, in combination with the market’s relative maturity compared
with its regional peers, is casting a shadow over the country’s longer-term potential for food and drink
manufacturers. The market’s fragmentation provides room for growth; however, larger players are
increasingly pushing out or absorbing smaller ones.

Key Company Trends
Chilean Coca-Cola Bottlers to Merge: Embotelladora Andina and Embotelladoras Coca-Cola Polar
have signed a preliminary agreement to merge their operations. The all-share deal would see Andina take
an 80% stake in the enlarged firm. For the 12 months to September 2011, the combined business would
have generated volumes of 641mn cases and revenues of US$2.56bn, making it the fifth largest Coca-
Cola bottler in the world. The move is in line with growing consolidation within the Latin American soft
drink industry; from here, Andina should be in a strong position to expand further.
Starbucks Continues to Expand in Latin America: In November 2011, US coffee house chain Starbucks
announced the opening of its 500th store in Latin America. The new store is in the Chilean capital of
Santiago. Starbucks intends to continue its growth in the region, with plans to open several hundred new
stores in Brazil by the end of 2016.

Key Risks To Outlook
Economic Slowdown Expected: We believe that declining exports and lower copper prices, combined
with a moderation of private consumption and gross fixed capital formation, will weigh on Chile’s
headline growth in 2012. Even though we are currently forecasting above-consensus real GDP growth of
4.8% in 2012, the expectation that private consumption growth will likely continue to moderate in the
coming quarters poses downside risks to our forecasts.

Chile Food and Drink Market

Table of Contents
BMI Industry View 7
SWOT Analysis . 8
Chile Food Industry SWOT 8
Chile Drink Industry SWOT ... 9
Chile Mass Grocery Retail Industry SWOT . 10
Business Environment .. 11
BMI’s Core Global Industry Views ... 11
Table: Agricultural Commodity Prices 13
Table: Core Views Q212 .. 22
Latin America Risk/Reward Ratings . 23
Table: Latin America Food & Drink Risk/Reward Ratings Q212 26
Chile’s Risk/Reward Rating .. 26
Latin America Sector Outlook ... 28
Brewing Will Continue To Consolidate Around Heineken, SABMiller, ABI 28
Macroeconomic Outlook ... 33
Table: Economic Activity . 36
Table: Major Mining Investment Projects ... 36
Industry Forecast Scenario ... 37
Consumer Outlook 37
Food.. 39
Food Consumption ... 39
Table: Food Consumption Indicators – Historical Data & Forecasts . 39
Dairy 40
Table: Dairy 40
Confectionery... 42
Table: Confectionery Value/Volume Sales – Historical Data & Forecasts .. 43
Prepared Food . 45
Table: Canned Food Value/Volume Sales – Historical Data & Forecast 45
Table: Frozen Fruit & Vegetables ... 46
Table: Oils & Fats ... 47
Table: Snack Foods . 48
Table: Pasta . 49
Drink . 50
Hot Drinks ... 50
Table: Hot Drinks Value/Volume Sales – Historical Data & Forecasts .. 50
Soft Drinks ... 51
Table: Soft Drink Value/Volume Sales – Historical Data & Forecasts 52
Alcoholic Drinks .. 56
Table: Alcoholic Drinks Volume/Value Sales – Historical Data & Forecasts . 57
Mass Grocery Retail . 59
Table: Mass Grocery Retail Sales By Format – Historical Data & Forecasts . 59
Table: Sales Breakdown By Retail Format Type .. 60
Trade 61
Table: Trade Balance – Historical Data & Forecasts . 61
Food . 62
Key Industry Trends And Developments ... 62
Rising Exports, Domestic Demand Prompt Confectionery Investment . 62
Fonterra And Nestlé’s Plan For Merger Derailed By Opposition ... 62
Chile Positioned As Regional Hub ... 63
Foreign Direct Investment Flowing In . 64
Focus On Healthy Food ... 65
Market Overview .. 66
Food Sector . 66
Canned Food/Prepared Food .. 67
Confectionery... 68
Dairy 68
Meat . 69
Aquaculture . 70
Drink 71
Key Industry Trends And Developments ... 71
Concha y Toro Profits Hit By Currency Movement . 71
Concha y Toro Eyes Growing Domestic Beer Market . 72
Coca-Cola Bottlers Merging 73
Starbucks Continues To Expand In Latin America... 74
Market Overview .. 75
Soft Drinks ... 75
Hot Drinks ... 75
Alcoholic Drinks .. 76
Mass Grocery Retail ... 77
Key Industry Trends And Developments ... 77
Walmart’s Entry Leads To Rapid Consolidation . 77
Retailers Investing In Peru .. 78
International Expansion Increases... 79
Regulatory Scrutiny Over Prices . 80
Market Overview .. 80
Table: Structure Of Chile’s Mass Grocery Retail Market By Estimated Number Of Outlets ... 82
Table: Structure Of Chile’s Mass Grocery Retail Market – Sales By Format (US$bn) ... 82
Table: Average Annual Sales Value By Format – 2011 ... 83
Competitive Landscape . 84
Consumer Share Price Analysis 84
Key Players ... 88
Table: Key Players in Chile’s Food Sector .. 88
Table: Key Players in Chile’s Drink Sector . 89
Table: Key Players in Chile’s Mass Grocery Retail Sector . 90
Company Profiles ... 91
Food.. 91
Empresas Carozzi 91
Nestlé Chile SA 92
Soprole . 93
Drink . 94
Concha y Toro . 94
Embotelladora Andina . 96
Compañia Cervecerias Unidas (CCU). 98
Mass Grocery Retail 100
Distribución y Servicio (Walmart) ..100
Cencosud SA ...103
Falabella.105
Risk/Reward Ratings Methodology 106
Table: Rewards ...106
Table: Risks 107
Weighting .107
Table: Weighting 107
BMI Food & Drink Industry Glossary . 108
Food & Drink ..108
Mass Grocery Retail 108
BMI Food & Drink Forecasting & Sourcing ... 110
How We Generate Our Industry Forecasts ..110
Sourcing ..111

				
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