‘CASHING IN’ ON PASTA: GLOBAL OUTLOOK AND … BOARD 2013/4 Euromonitor… · ‘cashing in’ on pasta: global outlook and market opportunities for 2013-2017 unafpa/ipo/semouliers

‘CASHING IN’ ON PASTA: GLOBAL OUTLOOK AND MARKET OPPORTUNITIES FOR 2013-2017

UNAFPA/IPO/SEMOULIERS CONFERENCE 07 JUNE 2013

FRANCISCO REDRUELLO SENIOR FOOD ANALYST

ECONOMIC & GLOBAL DEMAND OUTLOOK

WESTERN EUROPE REVIEW •  KEY MARKET DATA

•  CONSUMER TRENDS

•  CASE STUDIES

EASTERN EUROPE REVIEW •  KEY MARKET DATA

•  CASE STUDIES

OPPORTUNITIES OUTSIDE EUROPE

KEY TAKEAWAYS

Q&A

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•  CASE STUDIES


•  CASE STUDIES


KEY TAKEAWAYS

Q&A


5

Living In Uncertain Times* ECONOMIC & GLOBAL DEMAND OUTLOOK

2010 2011 2012

5.2%

4.0%

3.1%

*Global Real GDP Growth


6

0

0.5

1

1.5

2

2.5

3

2009-10 2010-11 2011-12

Per

cen

tage

gro

wth

(%

) Retail Volume Sales Packaged Food Versus Pasta

Global Level

Packaged Food Pasta

Pasta: On the Footsteps of Packaged Good ECONOMIC & GLOBAL DEMAND OUTLOOK


7

Western Europe in ‘Cold Growth Area’ ECONOMIC & GLOBAL DEMAND OUTLOOK

Asia Pacific

Australasia

Eastern Europe

Latin America

MEA

North America

Western Europe -2

-1

0

1

2

3

4

5

6

7

-4 -2 0 2 4 6 8

Rea

l GD

P G

row

th (

%)

Retail Value Growth (%)

Pasta Retail Value Versus Economic Growth by Region

Hot growth area

Cold growth area

2012 Constant Prices - Fixed 2012 Exchange Rates.




•  CASE STUDIES


•  CASE STUDIES


KEY TAKEAWAYS

Q&A


9

0

2

4

6

8

10

12

2007 2012 2017

US

$ bi

llio

n

Pasta in Western Europe. Retail Value Sales.

Canned/Preserved Pasta Chilled/Fresh Pasta Dried Pasta

US$9.9 billion US$10 billion

Stagnation Looms Ahead WESTERN EUROPE REVIEW: KEY MARKET DATA


US$9.2 billion


10

Fastest Growth Projected for Chilled/Fresh Pasta WESTERN EUROPE REVIEW: KEY MARKET DATA


-8 -6 -4 -2 0 2 4 6 8 10

-100 -50

0 50

100 150 200 250 300

Canned/Preserved Pasta

Chilled/Fresh Pasta Dried Pasta

Per

cen

tage

gro

wth

US

mil

lion

Pasta in Western Europe. Retail Value Growth (%).

2012 -2017 Forecast.

2012-17 Absolute 2012-17 %


11

-4

1

6

11

16

21

-4

-2

0

2

4

6

8

Canned/Preserved Chilled/Fresh Dried

Per

cen

tage

gro

wth

US

$ p

er K

g

Pasta in Western Europe. Unit Price Analysis.

Retail Unit Price per Kg (2012) Unit Price Growth (%) (2007-2012)

Downward Price Pressure on Chilled/Fresh Pasta Offerings WESTERN EUROPE REVIEW: KEY MARKET DATA



12

Pasta

Need for

Convenience

‘Big Night in’

Need to Keep Healthy

Western European Consumer Behaviour in a Crisis WESTERN EUROPE REVIEW: CONSUMER TRENDS


13

Size matters…in Pasta •  Smaller outlets lose share …to everyone else •  Supermarkets and Hypermarkets stand up to discounters

Internet retailing still a niche but…. •  Retailers making increasingly easy-to-use online shopping

platforms

-20 -10

0 10 20 30

Supermarkets Hypermarkets Discounters Independent Grocery Retailers

Per

cen

tage

Gro

wth

Pasta in Western Europe Retail Value Growth by Outlet 2007-2012

Need for Convenience WESTERN EUROPE REVIEW: CONSUMER TRENDS


14

Health is growth driver •  Healthy formats’ benefits pay off •  Manufacturers seize opportunity to create added value

Put your money where your health is •  Organic (+47%) and gluten-free (+43%) formats see significant

growth between 2007-2012 •  High fibre formats add US$84 million to market in five years

Need for Health WESTERN EUROPE REVIEW: CONSUMER TRENDS

-5

0

5

10

15

2007-2008 2008-2009 2009-2010 2010-2011 2011-2012

Per

cen

tage

Gro

wth

Retail Value Growth HW Pasta Versus (Total) Pasta in Western Europe

HW Pasta Pasta Constant 2012 Prices/ Fixed 2012 Exchange Rates


15

Let’s cook it at home •  Challenging economy underpins ‘home-cooking’ trend.

Italian cuisine gains in popularity •  ‘Free training’ through television programmes

Big Night in WESTERN EUROPE REVIEW: CONSUMER TRENDS

210

240

270

300

2008 2009 2010 2011 2012

US

$ bi

llio

n

Total Retail Value Sales through Restaurants in Western Europe

Constant 2012 Prices/ Fixed 2012 Exchange Rates


16

Six Rings to Bind them All…to Success WESTERN EUROPE REVIEW: CONSUMER TRENDS

Added Value

Freshness

All natural ingredients

Wide range of fillings: spices,

truffles, spinach

Taps into indulgence and health

trends

Convenience: Cooked in a

minute

Customised package

Fact: 50% of 2012-2017 projected growth retail value growth in Chilled/Fresh Pasta coming from UK and Germany!


17

-1 0 1 2 3 4 5 6 7

-1 -0.5

0 0.5

1 1.5

2 2.5

3 3.5

4

Per

cen

tage

Gro

wth

US

$ B

illi

on

Top Ten Pasta Markets. Retail Value Growth (%) 2012.

Retail value sales Retail Value Growth

UK and Austria: Hot Markets WESTERN EUROPE REVIEW: CASE STUDIES



18

21%

25% 54%

Pasta in UK. Retail Value Sales Breakdown 2012.

Canned/Preserved Pasta Chilled/Fresh Pasta Dried Pasta

Chilled Formats Account for a Fourth of Sales in UK WESTERN EUROPE REVIEW: CASE STUDIES

Retail Market Value:

US$874 million


19

-10 -5 0 5 10 15 20 25 30 35 40 45

-50

0

50

100

150

200

Canned/Preserved Pasta


Per

cen

tage

Gro

wth

US

$ M

illi

on

Pasta in UK Retail Value Growth Projections: 2012-2017

Absolute growth Percentage growth

-5%

+39%

Dried Pasta to Show Strongest Performance


+20%

WESTERN EUROPE REVIEW: CASE STUDIES


20

United Kingdom: The ‘One’ for Dried Pasta WESTERN EUROPE REVIEW: CASE STUDIES

Dried pasta ‘European champion’

Price

‘Big night in’ occasions

Dried formats is the ‘real

Italian style ’

Benefits from

‘television training’

New shapes, even for children!

Wholegrain and organic

lines tap into health trend

Fact: High-fibre pasta projected to add US$9 million to market between 2012-2017, to total US$34 million


21

31%

69%

Pasta in Austria. Retail Value Sales Breakdown 2012.


Dried Formats Account for Two Thirds of Sales in Austria WESTERN EUROPE REVIEW: CASE STUDIES

Retail Value Sales: US$186 million


22

0

5

10

15

20

25

30

35

15.5

16

16.5

17

17.5

18

18.5

19


Per

cen

tage

Gro

wth

US

$ m

illi

on Pasta in Austria

Retail Value Growth Projections: 2012-2017

Absolute growth Percentage growth

+14.5%

Chilled Pasta Takes Fast Train…to the Future WESTERN EUROPE REVIEW: CASE STUDIES


+29%


23

Something for Everyone WESTERN EUROPE REVIEW: CASE STUDIES

Consumer Segmentation

Austrian brands dominate

Innovation targets ‘food intolerance’ consumer group

‘Nostalgia’ in packaging

Pasta for less than €1 per kg




•  CASE STUDIES


•  CASE STUDIES


KEY TAKEAWAYS

Q&A


25

‘Dried Eastern Europe’ EASTERN EUROPE REVIEW: KEY MARKET DATA

Chilled/ Fresh Pasta

1%

Dried Pasta 99%

Pasta in Eastern Europe Retail Value Breakdown


-20

-15

-10

-5

0

5

10

15

20

Chilled/Fresh Pasta

Dried Pasta P

erce

nta

ge G

row

th

Pasta in Eastern Europe Retail Value Growth

2007-2012



26

-8 -6 -4 -2 0 2 4 6 8

10 12

Per

cen

tage

Gro

wth

Pasta in Eastern Europe. Retail Value Growth (%)

Steady Expansion Projected over 2012-2017 Period EASTERN EUROPE REVIEW: KEY MARKET DATA



27

Russia 52%

Poland 9%

Ukraine 5% Hungary

5% Romania

5% Croatia

4% Serbia

4% Czech Republic

3% Belarus 3%

Slovakia 2%

Other 8%

Altro 33%

Pasta in Eastern Europe. Retail Value Breakdown by Country 2012.

Two Thirds of the Market for Three Players EASTERN EUROPE REVIEW: KEY MARKET DATA


28

63%

13%

4% 4%

3% 3% 2%

8%

35%

Pasta Eastern Europe. Company Shares (%). Retail Value (2012)

Smaller manufacturers

Makfa OAO

Pervaya Makaronnaya Kompania ZAO Soyuzpischeprom OOO

Maspex Wadowice Grupa

Baisad ZAO

Si Group ZAO

Private Label

Small Manufacturers Dominate Competitive Landscape EASTERN EUROPE REVIEW: KEY MARKET DATA


29

-15

-10

-5

0

5

10

15

20

25

30

2007-08 2008-09 2009-10 2010-11 2011-12 Per

cen

tage

Gro

wth

Pasta Versus Rice and Vegetables in Russia.

Retail Volume Growth (%)*

Rice: The best Russian ‘Set-aside’ EASTERN EUROPE REVIEW: CASE STUDIES

Rice

Pasta Vegetables


30

One Product for One Consumer at One Price EASTERN EUROPE REVIEW: CASE STUDIES

Consumer Segmentation

Health trend opens path to premium pasta offerings

Shift to mid-priced and premium

products

Largest swathe of consumers still

highly sensitive to price

QR encoding to achieve recognition


31

20

21

22

23

24

Ret

ail V

alu

e S

har

e Makfa OAO

Retail Value Share (%)

2009 2012

Russian Domestic Brands Cash in on Advertising and Innovation EASTERN EUROPE REVIEW: CASE STUDIES

4 4.2 4.4 4.6 4.8

5

Ret

ail V

alu

e S

har

e Si Group ZAO

Retail Value Share (%)

2009 2012


32

Health Quality

Price Availability

Market Potential

Drivers and Challenges for Pasta in Eastern Europe EASTERN EUROPE REVIEW: CASE STUDIES




•  CASE STUDIES


•  CASE STUDIES


KEY TAKEAWAYS

Q&A


34

14%

36%

11%

39%

Retail Value Pasta Sales in Latin America. Regional Breakdown by Country. 2012

Argentina Brazil Mexico Other

Argentina, Brazil and Mexico are Largest Markets OPPORTUNITIES OUTSIDE EUROPE


35

0

5

10

15

20

25

30

0

500

1,000

1,500

2,000

2,500

Argentina Brazil Mexico

Per

cen

tage

Gro

wth

(%

)

US

$ M

illi

on

Pasta in Latin America. Retail Value Sales (2012) Versus. 2012-2017

Forecast

Retail Value Sales (2012) Retail Value Growth Forecast (2012-2017)

Highest Potential Growth in Argentina OPPORTUNITIES OUTSIDE EUROPE



36

Latin America Pasta Consumers Add Their ‘Own Flavour’ OPPORTUNITIES OUTSIDE EUROPE

‘Latin American’

flavour

Chilled/fresh Pasta offerings attract

interest from local players

Dried Pasta accounting for 90%

of retail value (2012)

‘Family reunions’ is key selling point

Dried Pasta for soup used as a daily

‘cheap’ staple in meals




•  CASE STUDIES


•  CASE STUDIES


KEY TAKEAWAYS

Q&A


38

Key Takeaways KEY CONCLUSIONS

Western Europe: Largest Potential in Premium formats

Latin America: ‘Perfect for Families’

All Markets: Think of Health, Think of Profit

Eastern Europe: Strike Balance between Quality and Price

THANK YOU FOR LISTENING

Francisco Redruello Senior Food Analyst [email protected]

Want to know more? E-mail me or let’s talk in the break

Documents

‘CASHING IN’ ON PASTA: GLOBAL OUTLOOK AND … BOARD 2013/4 Euromonitor… · ‘cashing in’ on pasta: global outlook and market opportunities for 2013-2017 unafpa/ipo/semouliers