GLOBAL INDUSTRY OUTLOOK REPORT 2018 Contents 01

INTRODUCTION 4

List of Abbreviations 4 Indicators 5 Geographical Coverage 7

EXECUTIVE SUMMARY 11

Industry Growth 12 Foodservice 15 Market Drivers and Trends 16 Market Challenges and Opportunities 18

GLOBAL SOCIAL AND ECONOMIC OUTLOOK 22

Global Demographics Overview 22 Urbanisation vs Population Growth 23 Global Economic Outlook Overview 25 Income and Consumer Expenditure 26

GLOBAL AND BEVERAGES SECTOR 30

Global Total F&B Industry Overview 30 Global F&B Distribution Landscape 31 Global F&B Industry Overview by Category 34 Global F&B Trends and Drivers 35 Global Consumer Foodservice Footprint 40

3 02 03

COMPOSITION OF F&B INDUSTRIES 44 MEAT & POULTRY 79

Meat & Poultry Industry – At a Glance 79 BEVERAGES 58 From Farmers to Consumers 79 Market Size and Potential 81 Beverages Industry – At a Glance 44 Market Trends and Drivers 82 From Farmers to Consumers 45 Distribution Landscape 84 Market Size and Potential 49 Challenges and Opportunities 85 Market Trends and Drivers 51 Case Study: Beyond Meat 87 Distribution Landscape 53 Challenges and Opportunities 55 Case Study: Uni-President 57 EDIBLE OILS 58

Edible Oils Industry - At a Glance 58 DAIRY 58 From Farmers to Consumers 59 Market Size and Potential 60 Dairy Industry – At a Glance 58 Market Trends and Drivers 62 From Farmers to Consumers 59 Distribution Landscape 63 Market Size and Potential 60 Challenges and Opportunities 64 Market Trends and Drivers 62 Case Study: Wilmar International and The Ethics of Palm Oil 65 Distribution Landscape 63 Challenges and Opportunities 64 Case Study: Chobani Yoghurt 65 POWER BRANDS 80

PULSES, GRAINS & CEREALS 66

APPENDICES 100 Pulses, Grains & Cereals Industry - At a Glance 66 From Farmers to Consumers 66 Category Definitions 100 Market Size and Potential 70 Sources 115 Market Trends and Drivers 72 Distribution Landscape 75 Challenges and Opportunities 76 SOURCES 100 Case Study: Barilla Alimentare 78

5 Introduction

Dubai World Trade Centre (DWTC) “The Company” have commissioned Euromonitor International, an independent provider of strategic market research, to prepare a market study on the global food and beverage industries.

Euromonitor International

Euromonitor International is an independent provider of strategic market research. We create data and analysis on thousands of products and services around the world. As independent market researchers, we provide unbiased historic trends and forecasts for every region, country, category, channel and consumer. Euromonitor’s research includes qualitative and quantitative-based trade surveying and analysis to support market, competitor and customer intelligence. Euromonitor was established in 1972 in London and has clients ranging from leading manufacturers and INTRODUCTION investment banks to governments and universities.

Research Methodology

The research methodology of Passport, the key source used for this Report, is based on a core set of research techniques that include desk research (national statistics, national and international trade press, national and international trade associations, industry study groups and other semi-official sources, company financials and annual reports, broker reports an online databases), store audits and trade survey with key stakeholders across the value chain. Forecast data provided represents many of the essential conclusions reached about the current state of the market, how it works and how it behaves under different macro and micro conditions.

In addition to Passport, information and prospects set out in this report have also been sourced from desk research (such as company websites, trade press) and trade opinion surveys conducted by Euromonitor with a sample (19 interviews) of importers/distributors, local manufacturers, retailers and trade associations within key industries (soft drinks, hot drinks, dairy, meat and poultry, edible oils and cereals, pulses and grains). Trade interviews with the key stakeholders were conducted between December 2017 and January 2018.

7 List of Abbreviations Indicators

Abbreviation Definition Indicators 2017 Edition Definition Market Sizing AMS North and South America Retail Value RSP: Measured in US Dollars with Historic Fixed AOA Asia, Oceania and Sub-Saharan Africa 2016 Exchange Rates, Forecast Fixed 2016 Exchange Rates APAC Asia Pacific B2B Business to Business B2C Business to Consumer GDP Gross domestic product is the sum of gross value added by all resident Bn Billion producers in the economy plus any product taxes and minus any subsidies BPA Bisphenol A not included in the value of the products. It is calculated without making

BSR Business for Social Responsibility deductions for depreciation of fabricated assets or for depletion and INTRODUCTION BULOG Indonesia Logistics Bureau degradation of natural resources. Measures in US Dollars with Historic Fixed 2016 Exchange Rates, Forecast Fixed 2016 Exchange Rates CAGR Compound Annual Growth Rate CS Consumer Spending CSR Corporate Social Responsibility Middle Class households The number of households with between 75.0% and 125% of median income. DNA Deoxyribonucleic acid EC European Commission EMENA , Middle East and North Africa Consumer Expenditure Measured in US Dollars with Historic Fixed 2016 Exchange EMI Euromonitor International Rates, Forecast Fixed 2016 Exchange Rates EU European Union Consumer expenditure comprises personal expenditure on goods - F&B Food and Beverage durable, semi-durable and non-durable - and on services in the domestic FAO Food and Agriculture Organization of the United Nations market, including the imputed rent of owner-occupied dwellings, the FDA US Food and Drugs Administration administrative costs of general insurance and of life assurance and GCC Gulf Cooperation Council superannuation schemes. Consumption expenditure in the domestic market is equal to consumer expenditure by resident households plus GDP Gross Domestic Product direct purchases in the domestic market by non-resident households GMO Genetically Modified organism and minus direct purchases abroad by resident households. Horeca Hotel, restaurant and café IPSO Indonesia Palm Oil Certification IRRI International Rice Research Institute Consumer Expenditure on Food Measured in US Dollars with Historic Fixed 2016 Exchange ISCC International Sustainability and Carbon Certification and Non-Alcoholic Beverages Rates, Forecast Fixed 2016 Exchange Rates Kg Kilogram MENA Middle East and North Africa region Mn Million Food products and non-alcoholic beverages purchased for consumption at home. MnT Million Tonnes MSG Monosodium Glutamate NFC Not From Concentrate Excludes: food products and non-alcoholic beverages sold for immediate PDO Protected Designation of Origin consumption away from the home by hotels, restaurants, cafés, bars, kiosks, PET Polyethylene terephthalate street vendors, automatic vending machines, etc. (consumer expenditure on PGI Protected Geographical Indication catering services); cooked dishes prepared by restaurants for consumption R&D Research and Development off their premises (consumer expenditure on catering services); cooked dishes prepared by catering contractors whether collected by the RFID Radio Frequency Identification customer or delivered to the customer’s home (consumer expenditure on RSPO Roundtable on Sustainable Palm Oil catering services); and products sold specifically as pet (consumer RTD Ready To Drink expenditure on other recreational items and equipment, gardens and pets). SRP Sustainable Rice Platform TFA Tropical Forest Alliance Tn Trillion UAE United Arab Emirates UK United Kingdom US United States USD United States Dollar

9 Geographical Coverage INTRODUCTION

Europe North America Asia Pacific

Middle East and Africa

Sub-Saharan Africa

Latin America Australasia

Asia Pacific

Australasia

Europe

Latin America

Middle East and North Africa

North America

Sub-Saharan Africa

11 Sub-Saharan Asia Pacific Europe Australasia Latin America Africa

Afghanistan Australia Anguilla Angola American Samoa Andorra New Zealand Antigua Benin Argentina Botswana Aruba Burkina Faso Bangladesh Belgium Bahamas Burundi Bhutan Bosnia-Herzegovina Barbados Cameroon Brunei North America Belize Cape Verde Cambodia Bermuda Central African Republic China Bolivia Chad INTRODUCTION Fiji Canada Brazil Comoros French Polynesia Denmark USA British Virgin Islands Congo, Democratic Republic Guam Cayman Islands Congo-Brazzaville Hong Kong, China Finland Chile Côte d’Ivoire India France Colombia Equatorial Guinea Indonesia Middle East Costa Rica Eritrea Japan Germany and North Africa Cuba Ethiopia Kazakhstan Gibraltar Curacao Gabon Kiribati Algeria Dominica Gambia Bahrain Dominican Republic Ghana Laos Iceland Djibouti Ecuador Guinea Macau Ireland Egypt El Salvador Guinea-Bissau Malaysia Italy Iraq French Guiana Kenya Maldives Kosovo Jordan Grenada Lesotho Mongolia Kuwait Guadeloupe Liberia Myanmar Liechtenstein Lebanon Guatemala Madagascar Nauru Libya Guyana Malawi Nepal Luxembourg Mauritania Haiti Mali New Caledonia Macedonia Morocco Honduras Mauritius North Korea Malta Oman Jamaica Mozambique Pakistan Saudi Arabia Martinique Namibia Papua New Guinea Monaco Sudan Mexico Niger Philippines Syria Nicaragua Nigeria Samoa Netherlands Tunisia Panama Réunion Singapore Norway Turkey Paraguay Rwanda Solomon Islands United Arab Emirates Peru Sao Tomé e Príncipe South Korea Portugal Yemen Puerto Rico Senegal Sri Lanka Sint Maarten Seychelles Taiwan St Kitts Sierra Leone Tajikistan St Lucia Somalia Thailand St Vincent and the South Africa Tonga Grenadines South Sudan Turkmenistan Spain Suriname Swaziland Tuvalu Sweden Trinidad and Tobago Tanzania Switzerland Uruguay Togo Vanuatu US Virgin Islands Uganda Vietnam United Kingdom Venezuela Zambia Zimbabwe

13 A billion extra consumers with growing disposable incomes across all regions

With a rapidly growing and highly urbanised population, demand across the globe for processed and packaged food and beverages (F&B) is set to increase. Growth in GDP at 3.5% outstrips population growth of 1% (CAGR 2017-30) but overall consumer spending on F&B is set to drop from 8.5% of GDP to 8.0% by 2030 as products become relatively more affordable and make up a smaller proportion of overall consumer spending.

Population growth underlies much of Food & Beverage global growth

Young, under 30 years olds, located in urban areas are in the lower income brackets and are trading of either Sub-Saharan Africa, Asia Pacific or Latin up to packaged food for the first time unlike their

America is an apt description of the key consumer counterparts in the more mature markets of Europe, SUMMARY EXECUTIVE of the future. This group is the fastest growing and North America and Australasia. Populations in these largest contributor to value sales growth with their mature markets are slow growing and are getting older, increasing purchasing power and love of westernised, with the key consumer of the future most likely to be convenient and easy-to-prepare food and beverages. over 50 years, in a small one-, two- or three-person, Instant noodles, pasta, dairy products, snacks and city-based household. Some are affluent, others will RTD drinks in single-serve packaging are winners be living on meagre state pensions but all are looking with this group but they are equally conscious of for health benefits for their bones, mobility, digestive their health, nutrition and the long-term dietary health and energy levels. Their working lives continue effects of the products they are consuming. longer and they like to treat themselves well, whether it is with organic, locally produced, high-quality fresh or Young parents with children want to provide their processed products or in the form of indulgent treats. offspring with beneficial nourishment and are careful what they feed their children. Many, in these regions,

World Population World GDP

CAGR 1.0% CAGR 3.5% 2030 8.5bn 2030 122tn Executive 2017 7.5bn 2017 78tn Summary

Executive Summary 15 Industry Growth

Asia Pacific provides scale, but the strongest growth Middle East & North Africa comes fromMiddle East and Africa Asia Pacific with its large, growing population and expanding middle class, is a region with With high birth rates, rapidly expanding cities and growing employment, the combined Middle East and Africa regions 4.2% strong potential in all F&B categories. Packaged offer the highest level of potential growth. With greater distribution of wealth, growing economic and political stability food sales are growing as modern retail expands supported by a developing cold chain and rapidly developing infrastructure, consumers have greater access to a wider range of foods and beverages. Despite 4.6% infrastructure for fresh, chilled and processed lower growth rates, the sheer size of the population and disposable income growth across Asia Pacific also offers an foods. Internet retailing and strong national enticing growth market in all categories. logistics allow consumers to purchase products 5.4% not easily accessible in local retailers at little or no extra charge. Health concerns around Exhibit 1 Industry growth per region by category, CAGR 2016-2021 obesity, children’s health and life-long health are 4.2% shaping the popularity of F&B products with strong and growing interest in naturally health SUMMARY EXECUTIVE 6.1 % and traditionally recognised ingredients. Cold chain services are also changing consumer choices in the Middle East and Africa regions as frozen processed halal meat and poultry, cold Asia Pacific Australasia North America drinks and flavoured milks increase in popularity. Foodservice is also growing with the entry of many international chains also influencing in-home consumption of more westernised foods and 2.8% 1 . 3% 1 . 5% beverages. Demand for bottled water, in particular, is expanding in major cities across these regions 4.2% 1 .1% 1 . 7% as sanitary and potable water systems fail to deal with the stress and demands of rapid urbanisation. Young consumers, particularly in Sub-Saharan 1 . 3% 0.5% 1 . 5% Africa, have adopted mobile- and internet-based services as the key channel of communication with 3.0% 0.8% 0.7% and about brands as well as delivery services. In Latin America, the traditional grocery retailer 4.8% 2.4% 0.7% still plays a significant role outside Brazil and Chile despite the rapid adoption of mobile apps for purchasing. Warehouses, discounters and private labels respond quickly to the needs of price-sensitive consumers but, despite persistent Europe Latin America Sub-Saharan Africa economic uncertainty, young, employed consumers are eager to try new products and are willing to pay for this indulgence. taxes in Mexico and other markets have changed 1 . 4% 3.2% 6.8% the ingredient profile of many products as manufacturers tweak formulations to offer new 0.6% 2.5% 3.1 % flavours, hybrid and soy-based drinks in smaller pack sizes in response to growing consumer 0.8% 2.7% 2.9% awareness of national health concerns. In the more mature markets of Europe, Australasia and North America, media and national campaigns, 1 .0% 2.3% 4.6% regulation and unsubstantiated packaging claims are challenging consumers’ purchasing decisions. 0.5% 1 . 9% 2.6% Increasing label scrutiny underlies most consumer choice as they search for natural, health-supportive ingredients with local sourcing and low processing. Online services are well established, but consumers still like to look, feel and test new products in local retailers. Consideration of the long-term impact KEY on their health and on the environment of their Beverages Dairy Poultry Pulses, Grains & Cereals Fats & Oils shopping behaviour is now strongly engrained.

The colour of the industries indicates growth rate Above global average Global average Below global average Source: Euromonitor International analysis from Passport

17 Middle North Sub-Saharan Asia Pacific Australasia Europe Latin America East & North America Africa Africa Market Trends and Drivers Total F&B 2011-2016 4.6% 2.0% 1.1% 4.2% 2.4% 0.8% 4.5% growth

Total F&B Shifting consumer needs affect both affluent & low-income consumers globally

2016-2021 4.6% 2.2% 1.8% 2.6% 2.2% 1.8% 2.0% Source: Euromonitor International analysis from Passport growth In a highly competitive market, manufacturers ingredients, sugar and salt; shifting their preference

Fastest Internet Internet Internet Internet Internet Internet Internet strive to deliver an appealing, high quality, reliable to organic, natural and holistic ingredients while still growing retailing retailing retailing retailing retailing retailing retailing product with consistent standards across the globe. looking for novel recipes, bold and exotic tastes and retail channel (38%) (20%) (8%) (5%) 39%) (14%) (33%) Tension is created by changing consumer trends with convenient packaging and product delivery. Internet smaller companies clearly more agile and proficient purchasing is also changing the delivery of products at developing niche, market-defining products. not just for storage and home-delivery formats but Highest Environment/ Environment/ Environment/ Environment/ Environment/ Consumers are actively transitioning to healthier also in terms of access to local brands and short order Kosher value share Sustainability Sustainability Sustainability Sustainability Sustainability NA (71%) foods and beverages; rejecting products with artificial supply. Key consumer and industry trends include: ethical label (84%) (74%) (80%) (87%) (76%) EXECUTIVE SUMMARY EXECUTIVE Highest Fortified/ Naturally Naturally Fortified/ Naturally Fortified/ Naturally value share Functional Healthy Healthy Functional Healthy Functional Healthy H&W label (46%) (32%) (48%) (41%) (53%) (34%) (52%)

Greater demand for Improved F&B food Cold chain Single serve, smaller packaging naturally healthier, safety and hygienic expansion reflecting smaller households, functional and free- preparation on-the-go consumption and Foodservice from ingredients health concerns

App-based delivery services are disrupting traditional foodservice demand

Foodservice consumption continues to rise as the In all markets, delivery services, driven by the Increased label Increased demand for Increasing importance of presence of F&B products and services in all retail use of mobile apps, is taking an increasing share scrutiny and credible labelling and ethical positioning, such channels increases. Convenience stores and forecourt of foodservice sales with many consumers now ingredient list regulation of ingredients as Halal, recycled, retailers now compete directly with traditional opting for rapid delivery of high quality F&B to

Source: Euromonitor International analysis from Passport simplicity and sourcing eco-friendly or organic foodservice outlets, providing a wide range of hot and the comfort of their own home. This is not just cold F&B, take-home, delivered and on-the-go stock. confined to young consumers but reaches, in In less affluent markets, street stalls and kiosks offer mature markets, into all categories, as delivery the operator a cheaper alternative to investing in a services offer ingredient and recipe supply, fast store, cafe or bar, with modern equipment improving food and fine dining as well as casual delivery the quality and range of products they can now offer. of simple cups of coffee from local retailers.

Middle North Sub-Saharan Asia Pacific Australasia Europe Latin America East & North America Africa Africa Clear policies on Increasing Growing interest in plant- Scaling up of leading F&B sustainability, westernisation and based F&B substitutes companies through M&A Fastest Street Stalls Cafes/Bars Fast Food 100% Home 100% Home 100% Home 100% Home farming techniques, diversification in ingredients, activity to offset challenge growing / Kiosks Delivery/ Delivery/ Delivery/ Delivery/ local and careful, of diet flavourings, sweeteners of online giants and current food service Takeaway Takeaway Takeaway Takeaway channel (3.5%) (4.2%) (2.1%) (3.9%) (5.1%) (3.9%) (8.4%) transparent sourcing and protein sources consumer trends

Note: Based on CAGR 2016-2021

Beverages Dairy Meat & Poultry Pulses, Grains & Cereals Fats & Oils

KEY Moons indicate the level of direct impact on each industry. The fuller the moon, the higher the direct impact Low High

Source: Euromonitor International analysis from Passport, trade interviews and desk research Note: Level of impact mentioned is extrapolated by Euromonitor International based on its market understanding.

19 Challenges and Opportunities

Consumers strive to define acceptable standards Brand values are increasingly the key differentiators for the development of the supply chain for the modern consumer

Changing consumer perspectives on the production Pressure to lower prices is inescapable due to stiff With an additional one billion consumers by 2030 presence in all markets and highly affluent consumers of food and beverages demands improved sustainable competition between manufacturers and retailers many opportunities present themselves both in where added value is defined in terms of health and agricultural practices including protecting natural and is felt throughout the supply chain, from pressure developed and developing markets. Consumers enhanced life expectancy. Scaling up to meet this resources while dealing with the volatility of climate to lower input costs to the creation of efficient and throughout the world are demonstrating their interest demand by leveraging technology, both blockchain and commodity pricing. Consumers consider farmer resilient supply chains taking advantage of the in natural, healthier, high quality and safely produced and consumer-facing technology, is crucial. Investing livelihoods and animal welfare important first steps latest technologies. Vertical integration is intense in food and beverages through their current purchasing in the supply chain and delivery logistics is essential in the supply chain with governments demanding some categories with the objective of controlling decisions. This demand is set to expand as many to meeting not just the critical demands of the young, traceability from farm to table to ensure clean and all aspects of production and ensuring delivery of a families teach their children a new set of expectations. thoughtful consumer, but as a pathway to meeting

sanitary production and processing methods. product that meets emerging consumer demand for The market is characterised by a burgeoning low- future demand for personalised, tailored products of SUMMARY EXECUTIVE ethical, naturally healthy and affordable products. Key income mass market, a slowly expanding middle-class the consumer of 2030. Some of these opportunities are: consumer and industry challenges include: Source: Euromonitor International analysis from Passport, trade interviews and desk research

Increased demand Growing demand for Demand for High cost of investing in Differentiate with Develop affordable Rising demand for Take advantage of smart for ethically farmed limited resources such traceability farmer training, modern clear and credible product lines healthier recipes, packaging to ensure ingredients and pressure as water and key crops and sourcing farming techniques labelling to attract to suit low-income natural ingredients and freshness, portability and on farmers to produce by other industries transparency and technology the health-conscious consumers in additive-free product design possibilities to sustainable crops demographic developing markets formulations attract consumers

Rapidly growing Rising input costs, Increasing competition Re-invention of Appeal to convenience Widening consumer RTD, RTE, quick cook, Competitive demand for high price volatility and from private label retailing with direct impulse purchasers palate allows for new ready prepared and other advantage through value resources which changing subsidies with deterioration of producer/supplier with wider offering in recipes, ingredients convenience foods to suit sustainable and ethical are, by their nature, high quality, specialist, to door delivery and smaller packs, snacks and and styles busy consumers farming methods in short supply differential positioning online purchasing convenient portable sizes

Beverages Dairy Meat & Poultry Pulses, Grains & Cereals Fats & Oils KEY Moons indicate the level of direct impact on each industry. The fuller the moon, the higher the direct impact Low High

Source: Euromonitor International analysis from Passport, trade interviews and desk research Source: Euromonitor International analysis from Passport, trade interviews and desk research Note: Challenges listed above are a consolidation of challenges within the different industries covered in this report. Level of impact is extrapolated by Note: Challenges listed above are a consolidation of challenges within the different industries covered in this report. Level of impact is extrapolated by Euromonitor International based on its market understanding. Euromonitor International based on its market understanding.

21 Global Demographics Overview

By 2030, there will be 1 billion additional consumers ready to be served across the globe

The world population in 2017 stands at 7.47 billion, up from 6.96 billion in 2011. With expected slower growth between 2017-2030, the world population is expected to reach 8.5 billion by 2030.

Exhibit 2 Regional population in 2017, 2030 & CAGR 2017-2030

394.8mn OVERVIEW DEMOGRAPHICS GLOBAL 746.3mn Europe 0.7% 0.0% 362.1mn 746.2mn 4.5bn North America 677mn 0.7% Asia Pacific

1.5% 4.1bn

1.4bn 558mn

Sub Saharan 2.5% Middle East Africa & North Africa 708.6mn 1bn 35.3mn Latin America 0.8% Australasia 640.0mn 1.4%

29.3mn

KEY : Inner circles indicate the population in 2017, outer circles indicate the population in 2030. The distance between the inner and outer circles indicates the size of the absolute growth

Colour of the circles indicate the growth rate Fast Moderate Slow Static Source: Euromonitor International analysis from Passport

More than 13% of the global population resides in With its rapidly growing population and an additional Sub-Saharan Africa in 2017. By 2030, Sub Saharan 380 million people, Asia Pacific is expected to Africa will be outpacing all other regions in population contribute the most to global food and beverage growth, partly driven by foreign investments in industry value sales growth, mainly driven by higher infrastructure, healthcare and nutrition. In Sub- demand for oils, dairy products and beverages such as Saharan Africa, the expanding population aged under sports and energy drinks and bottled water. The large, 30 years is expected to drive demand for key food young consumer groups in these countries will also and beverage categories such as beverages and drive the growth of convenient and portable forms of confectionery. beverages along with single-serve food products such Global Social & as RTD tea and coffee, cheese and dairy products, Economic Outlook cereals and pasta.

23 Urbanisation vs Population Growth

By 2030, 60% of the total world population will be living in urban areas

Urbanisation offers a dense, concentrated market and opportunities for retail infrastructure and products tailored to newly affluent consumers as well as large sections of the community on low incomes. Growth in urbanisation is expected to surpass overall population growth in all regions.

Exhibit 3 Regional urban population growth vs. total population 2017-2030

URBAN POPULATION GROWTH, 2017 - 2030

4.5% GLOBAL DEMOGRAPHICS OVERVIEW DEMOGRAPHICS GLOBAL 4.0% Sub Saharan 46% Africa

3.5%

3.0%

2.5% Middle East 68% & North Africa

Asia 2.0% 55% Pacific 91% Australasia 1.5%

Latin 1.0% 83% America

0.5% 83% North 77% Europe America

- 0.0% - 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% leader as a result of good incentives for distributors, Highly urbanised societies in Europe create a different strong below-the-line advertising, frequent consumer profile of product demand. Meat substitutes and hot promotions, as well as the availability of a variety of cereals are examples of key growth categories on the pack sizes and flavours. back of strong health and wellness concerns. Source: Euromonitor International analysis from Passport Note: Bubble size represents the urban population over total population in 2030 In Manila, one of the most densely populated cities For example, in the mature and saturated processed in the world, the importance of product convenience meat market in Germany, meat substitutes are now has been prominent to address the demand of the a small but strongly performing category. Meat High urbanisation growth, as demonstrated in Sub- oils is greater in the Middle East and North Africa due urban population. Companies such as AB Nutribev consumption is changing with a growing number of Saharan Africa, offers potential as new cities coalesce to higher disposable income levels while more mass have found success with their Vitamilk product, vegetarians and those following a vegan lifestyle. In around natural growth in the population, migration market products, such as beverages (bottled water, available in 300ml glass bottles and positioned as a addition, many consumers aim to lower their meat from rural areas and reclassification/upgrading of packaged tea) and dairy products are in greater healthy energy drink that can help address hunger and consumption as part of a healthy heart lifestyle. former slums into urban areas. Urbanisation growth in demand in Sub-Saharan Africa. tiredness. It targets the increasing demand for on-the- This emerging consumer group presents significant the Middle East & North Africa region is also expected In Nigeria, urban population has been price sensitive go consumption. In 2017, Purefoods-Hormel Co started opportunities for growth with many meat processors to be strongly influenced by large-scale infrastructure due to economic uncertainty which has forced unit construction of new production facilities for hotdogs, now venturing into this category to ensure full portfolio development, agricultural and land reform and the prices for food and beverages to rise strongly in recent chicken nuggets, corned beef and luncheon meat in coverage within this market. Pure discounter Aldi development of older and new cities. years. Staple foods, such as a rice, pasta and noodles, the Philippines to meet demand in the mid-to-high offers a wide range of vegan options including burgers, Growing urbanisation in these regions influences have seen strong growth. Instant noodles, for example, end of the market. Modern retailing in the Philippines schnitzel, meatless hotdogs, meatless meatballs, demand for food and beverage categories differently. are increasingly popular and are seen as convenient is expanding more rapidly than traditional grocery chickenless nuggets and meat-free mince and in Demand for higher-priced convenience categories to prepare, fairly cheap, and widely available. Dufil retailing, offering greater opportunities for hot and December 2017, it launched its range in an additional 17 such as RTD tea and coffee and higher-grade olive Prima Foods’ Indomie noodles brand is now a market chilled foods. countries.

25 Global Economic Outlook Overview Income and Consumer Expenditure

Asia Pacific and Middle East & Africa top GDP growth to 2030 More than half of world GDP now comprises consumer expenditure

The food and beverage industry is one of the largest manufacturing sectors in terms of jobs and value added in most In 2017, total global disposable income accounts for the 65% of total world GDP (US$51 trillion in 2017) while economies contributing US$77.5 trillion globally in 2017. A forecast overall CAGR of 2.9% over 2017-30 is driven in consumer expenditure represents 56% of world GDP. Consumer expenditure on food and beverages is now US$6.6 part by population growth in emerging markets within Asia Pacific and Middle East and North Africa but also by the trillion or 8.5% of world GDP. shift to packaged and convenience foods in these regions. Exhibit 5 Total global GDP, disposable income and total consumer spending, 2017 Exhibit 4 Regional GDP in 2017, 2030 & CAGR 2017-2030

26.3tn OVERVIEW DEMOGRAPHICS GLOBAL 23.7tn Europe 1.9% 195* 1.5% 20.6tn 19.5tn US$77.5tn US$50.8tn US$43.8tn US$6.6tn North 44.8tn America 7.5bn 6.2tn consumers 4.4% Asia Pacific 25.5tn 3.8%

2.3tn 4.0tn World consumer spending on food World Disposable World Consumer and non-alcoholic Sub Saharan 3.8% Middle East Africa & North Africa 2017 World GDP Income Spending beverages 7.1tn 1.4tn 2.0tn Latin America 2.7% Australasia 5.1tn 2.5%

1.5tn Note: * Countries with available data Source: Euromonitor International analysis from Passport

KEY : Inner circles indicate total GDP in 2017, outer circles indicates total GDP in 2030. The distance between the circles indicates the size of absolute GDP growth After the latest recession, and political and economic proteins, fermentation and probiotics will increasingly uncertainty, consumers in many countries have form part of a healthy diet with blockchain technology Colour of the circles indicate the growth rate Fast Moderate Slow adopted a more cautious approach to spending. supporting safer supply chains and controls. US$ fixed 2016 exchange rates, constant 2016 prices Consumers in developing markets tend to be more Source: Euromonitor International analysis from Passport Forecast growth in middle-class households is optimistic than those in developed counties when it strongest in countries such as Nigeria and Egypt comes to spending but many still focus on affordability as employment and income opportunities rise in as the primary purchase decision criteria. urban areas in these countries. Expenditure on food Asia Pacific is forecast to achieve the fastest growth added products are favoured by higher income and As disposable income rises, consumer expenditure on and beverages also increases at a high rate as these in GDP, driven by the strong manufacturing and older consumers looking for natural ingredients/ food and beverages in the Asia Pacific and Middle East middle-income households emerge. export-led economies of China and India as well as product formulations that exclude added sugar, salt, and Africa regions will increase from 53% of global Demand for fast food restaurants and processed food overall growth in private consumption. Growing private preservatives and artificial ingredients. With up to expenditure in 2017 to 60% by 2030. Urbanisation and in Nigeria is robust, fuelled by a fast-growing young consumption in these markets is encouraged by the 24% of the population of Europe expected to be over population growth are expected to aid this consumer population, rapid urbanisation, increasing affordability expansion of global foodservice chains introducing 65 years by 2030, food and beverages in smaller spend. As a result, packaged foods and beverages are and demand for convenience. In addition, Nigerians are westernised food and beverages as well as the quantities, with natural flavours and clear labelling are expected to become more accessible, with increased switching from unpackaged, unbranded products to expansion of modern retailing formats and the raised expected to be in higher demand. Rising incidences access to international brands and western food types. packaged products as the urban population reaches presence of convenience products. of diabetes, cardiovascular diseases and osteoporosis In developed markets consumers are more inclined 51% and consumers look for packaged food products will drive the growth of functional foods fortified with GDP growth in Europe is more muted, with mature, towards purchasing added-value products, preferably that are quick to prepare or ready to consume, such as vitamins and minerals. saturated markets for food and beverages. Value- with natural ingredients, Plant-based and alternative noodles, dairy products, snacks and bread.

27 In Saudi Arabia, as women enter the workforce there is less time for shopping or preparing meals and this is leading to increased consumption of packaged and processed foods. Rising disposable incomes and middle-class households also support increased consumption out of home and in foodservice outlets. A growing cafe culture is driving demand for speciality teas and coffees as international chains such as Starbucks and Dunkin Donuts or local chains such as Coffee Planet and Bonnon Coffee expand. Young women in particular, are becoming increasingly aware of healthy lifestyles with manufacturers launching new products that are health-oriented as well as affordable. Products such as unprocessed cheese, butter, healthier edible oils and some sauces, dressings and condiments are witnessing growing demand with many new product launches, such as Activia Yoghurt Go by Al Safi Danone or Nestlé Fitness Granola by Nestlé.

Exhibit 6 Consumer expenditure on F&B growth and middle-class household growth for top 20 F&B spending countries

Consumer Exp Country Typology on F&B in 2017

China Emerging and 1,033,585 Developing Countries

USA Developed 796,647 Countries India Emerging and Countries with large populations and high growth in middle-class OVERVIEW DEMOGRAPHICS GLOBAL 423,488 Developing Countries household formation, such as China and India in Asia Pacific, offer Japan Developed varied opportunities in food and beverages. China, for example, will see 420,771 Countries the creation of an additional 21 million new middle-class households by Nigeria Emerging and 2030 but India, with a similar sized population, will only add 12.7 million 194,547 Developing Countries and overall value growth will be substantially lower. Russia Emerging and 194,126 Developing Countries Packaged food sales are growing in India as disposable incomes

Germany Developed increase. Families are actively adopting westernised food concepts with 188,696 Countries sales of pasta sauces and cheese growing as pizza, burgers and Italian

France Developed foodservice outlets become popular. National concern around obesity 178,270 Countries is also forcing parents to focus on their children’s health and their

Brazil Emerging and consumption of processed foods. Parents now look for lower sugar, fat 175,412 Developing Countries and salt content in the processed food they give their children and try

Mexico Emerging and to ensure a proper diet of nutrients and vitamins. 174,665 Developing Countries “Made in China” is no longer considered inherently inferior following Indonesia Emerging and strong endorsement by first lady, Peng Liyuan. However, past 172,584 Developing Countries food scandals have left Chinese consumers concerned about food Italy Developed processing methods with many middle-class consumers shifting to 164,570 Countries fresh, nutritional and organic foods where possible. The improving “When Gen X were United Kingdom Developed cold chain infrastructure has also supported the expansion of fresher 129,293 Countries kids, we all ate and chilled packaged food and beverages. Fresh milk, for example, has Turkey Emerging and benefited both from wider availability and its image as a nutritional, American cheese. 122,253 Developing Countries convenient drink. Argentina Emerging and Now kids are eating 104,771 Developing Countries In key countries in Latin America, the middle-class continues to expand. Havarti, Gouda, etc. Spain Developed In Mexico 25% of all households are now classified as middle-class. 102,291 Countries Many now place greater value on convenience, modern retail formats, there is a culinary Philippines Emerging and brands and product quality, rather than simply on price. Modern 99,587 Developing Countries convenience stores are very popular and are expanding in many aspect to it all. A Pakistan countries. In Mexico, many are open 24 hours a day, serving fresh coffee Emerging and lot of blurring of 99,270 Developing Countries and baked goods along with other services, such as bill payments,

South Korea Developed banking and phone service support facilities, to encourage increased the lines between 89,717 Countries footfall. Products available cater to the national focus on weight meals and snacks. Canada Developed management, such as less processed foods, fortified and functional 81,586 Countries alternatives and products that offer reduced sugar or reduced fat, Leading global -0.5% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0% 5.5% 6.0% 6.5% which continue to drive growth as health promotion steps up nationally. dairy manufacturer

Note: Bubble size indicates the size of total consumer spending on food and beverages in each country Source: Euromonitor International analysis from Passport

29 In North America, the population aged 60 years In Turkey, 75% of all households are now in urban and older constitutes the fastest-growing consumer areas. Many adults are in professional employment segment in both the USA and Canada. This is expected and there has been a rise in the number of single to drive increased demand for a wide range of age- person households. This has created demand for specific products and services, particularly health- smaller-sized packs, processed meat and ready meals, related products. Many people are working longer than with convenience and ease of preparation high on previous generations, have higher disposable incomes the agenda for busy working adults. Young, urban and have an active, healthy lifestyle. Manufacturers, consumers are interested in new and sophisticated aware of consumer demand for natural, nutritional products for in-home consumption, as general political and sustainable foods, are reformulating their popular and economic instability has depressed the frequency products to increase appeal, achieving market share by of eating out. Western-style coffees and health and acquisition of smaller, successful, niche providers and wellness products, such as /herbal and green tea, developing fresher products with natural ingredients are increasingly popular. and lower levels of processing that suit not just Economic recession and trade embargos on Russia are the older generation but also strong health trends heightening price sensitivity. Consumers are trading throughout the general population. down with a shift from premium to mid-priced or In Western Europe, the free-from trend is now well mid to economy price segments, for example in tea, established and growing. Gluten-, meat- and dairy-free coffee and hot drinks. Manufacturers are responding product ranges are increasing in variety, availability by diversifying their product portfolios offering value and affordability as the price gap between standard for money lines at all price points as well as using and free-from products narrows. Flexitarian, vegetarian promotional activity to maintain visibility and brand and vegan populations are growing, but even among loyalty. Domestically produced drinks such as Russian general consumers there are many who believe that kompot juice drinks, kvass non-cola carbonates or gluten- or lactose-free products are good for digestion sugar-free and vegetable-based soft drinks are widely and that alternative high-protein sources are kinder to available and popular. the environment as well as better for your health. In the UK, for example, sales of free-from packaged foods grew by 5% in 2016 as sales through supermarkets, hypermarkets and discounters expanded. Global Food & Beverage Sector

31 Global Total F&B Industry Overview countries limits the expansion chilled facilities for stocking increasing label scrutiny and of dairy and fresh food sales fresh dairy, meat and seafood. transparent production methods but demand for milk, butter, Consumers are increasingly are influencing consumer choices yoghurt and cheese is growing aware of the health impact of across Europe. Growth in this strongly as the number of the food they eat, especially in region will be much slower as expatriates and working women countries such as Mexico, Brazil, consumers look for long-term Highest growth will come from Asia Pacific, Middle East & Africa and Latin America increases in many countries. Chile and Argentina, where health gains through diet, Middle East and North Africa awareness of food content is replacing the more short-term Overall retail value of food and beverage sales across the world in 2016 reached US$1,585 billion with Asia Pacific, Latin is one of the priority regions heightened due to taxes and focus on lower salt, sugar and America and Middle East & Africa accounting for 57% of this value. In 2017, it is forecasted to reach US$1,617 in 2017 and for major food and beverage government backed campaigns fat content. The proportion by 2021 total value sales of food and beverages (F&B) is forecast to reach US$1,788 billion. companies due to its growth to lower levels of diabetes. of consumers over 50 years potential. Local government Gluten-, sugar- and fat-free foods in the total population is support for foreign investment and sugar-free carbonates are also forecast to rise reaching Exhibit 7 Total F&B Value Sales in 2016, 2021 & CAGR 2016-2021 US$ billion has also seen the establishment popular with many consumers 42% by 2030 up from 37% in of new manufacturing plants. looking for more naturally healthy 2017. This demographic shift alternatives in packaged foods. is expected to raise interest Consolidation in modern retailing in vegetarianism, weight is occurring in many smaller In 2017, Europe accounted for management with fortified countries, such as Colombia and 25% of global food and beverage foods and healthy snacking and Chile within Latin American, sales. The demand for naturally beverages set to increase. 290bn but high penetration in Brazil healthy foods and beverages, 412bn Europe provides many stores with

1.5% SECTOR FOOD AND BEVERAGES GLOBAL 0.9% 270bn 394bn 659bn North America 130bn Global F&B Distribution Landscape 3.2% Asia Pacific

4.6% 562bn

51bn 104bn

Sub Saharan 5.4% Middle East Super/hypermarkets Exhibit 8 Global food value sales split by key Africa & North Africa channels, 2011-2016 US$ million 221bn 39bn 25bn suffer as internet Latin America 2.8% Australasia retailing and 193bn 1.1% convenience stores - 200K 400K 600K 800K 1M 24bn and forecourts expand 2011 Super/hypermarkets now control 55% of total food value sales from 2012 KEY : Inner circle indicates total F&B value sales in 2016, outer circle indicates total F&B value sales in 2021 56% in 2011. Convenience stores The distance between the circles indicates the size of absolute growth and forecourts have increased their presence and range of Colour of the circles indicate the growth rate Fast Moderate Slow Static 2013 products offered, with market

Source: Euromonitor International analysis from Passport Source: Euromonitor International analysis from Passport share now reaching 6%, up from 5% in 2011. Although still small, 2014 mobile and online purchasing is revolutionising food and beverage Asia Pacific is the most rapidly and has also supported a shift the Middle East and North 2015 purchasing through its integration expanding food and beverage from unpackaged to packaged Africa region. Premiumisation with rapid and localised delivery market due to burgeoning foods, the growth of fast food is a growing trend as the systems and is the channel 2016 populations, higher and more and specialist coffee outlets, number of middle-class and of choice for many younger widely distributed disposable a growing interest in naturally wealthy consumers increases, consumers with global sales share income, a growing culture of healthy foods as well as the with many young consumers increasing by 1.2% since 2011. Convenient Stores and out-of-home consumption. India expansion of convenience stores. favouring international brands Discounters Forecourt Retailers is the star performer, surpassing and consumption through For both hot drinks and soft drinks High disposable incomes, Pakistan, Indonesia and China foodservice increasing. A volume, super/hyper markets are Supermarkets/Hypermarkets Internet Retailing rapid urbanisation and a large in terms of forecast growth. growing cafe culture is boosting the leading channels in 2016 with and growing group of young Traditional Grocery Retailers Other Dairy Economic expansion, rising sales of RTD tea and coffee as 47% and 37% shares respectively. consumers comprised of young incomes and a rapidly expanding well as demand for hot drinks professionals and families with middle class has led to increased in convenience and forecourt young children strongly influence Note: Channel split excludes dry pulses and semi-processed pulses spending in the last five years stores. An underdeveloped cold food and beverage sales across chain infrastructure in many

33 Exhibit 9 Global soft drinks volume sales split by key channels, 2011-2016 Million litres

Modern grocery formats such as Global F&B Industry super/hypermarkets, forecourts - 100K 200K 300K 400K 500k 600k and convenience stores dominate despite discounters actively 2011 Overview by Category developing their network of stores over the last five years. 2012 Discounters have relied on value sales driven by high quality, low prices and convenience Beverages dominate global sales of food and beverages in value terms, 2013 targeting low- and middle-income while edible oils is the fastest growing category

Source: Euromonitor International analysis from Passport consumers, but this approach is Beverages is the largest category, with soft drink dominating overall sales. Forecast growth to 2021 is strong at a 2.5% 2014 now well established and adapted by all channels, particularly CAGR with stronger growth in hot drinks as many consumers switch to the health benefits of tea, different varieties of through private label ranges. coffee and other hot drinks. Sugar-laden carbonates are suffering in many markets as consumers search for healthier, 2015 reduced/no sugar alternatives such as hybrid juice drinks, low-fat flavoured milks and bottled water. For middle to premium consumers a shift to local and specialist Exhibit 11 Global F&B value share by industry, 2011–2021 2016 stores is driving sales of premium, natural and organic foods allowing traditional and independent - 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 Convenience Stores and grocers to maintain their market Discounters 2011 Forecourt Retailers share at 26% globally. All leading Source: Euromonitor International analysis from Passport, FAO global retailers have also adopted SECTOR FOOD AND BEVERAGES GLOBAL Supermarkets/Hypermarkets Internet Retailing 2012 omnichannel approaches to the 2013 Traditional Grocery Retailers Other Dairy market, with large investment in establishing a strong presence 2014 in mobile retailing essential. 2015 Note: Channel split excludes dry pulses and semi-processed pulses Packaged foods dominate retail 2016

sales through super/hypermarkets 2017 with traditional retailers relying 2018 Exhibit 10 Global soft drinks volume sales split on hot and soft drinks sales by key channels, 2011-2016 Million litres more than on packaged foods. 2019 Convenience stores and forecourts 2020 have strong sales in soft drinks 2021 with discounters selling both food - 2M 4M 6M 8M 10M 12M 14M and beverages equally well. Beverages Dairy Cereals, Pulses and Grains Meat & Poultry Fats & Oils 2011 Young consumers now use mobile apps to order, purchase and arrange delivery of food and beverages 2012 Dairy is forecast to grow at a 2.3% CAGR to 2021. Meat and poultry is the slowest growing category at an ever-increasing rate. Improved cold chain infrastructure in major markets at CAGR 1.3%, directly influenced in mature markets Foodservice, in particular, is taking such as Latin America, Asia Pacific and Middle by increasing numbers of flexitarians, vegetarians 2013 advantage of this opportunity with East & North Africa is supporting growth in fresh, and vegans. Lower annual consumption of meat rapid ordering and delivery available Source: Euromonitor International analysis from Passport chilled milk, yoghurts and cheese products with and poultry is also occurring in these markets as from all leading and local providers. nutritious dairy products fitting well within the part of the development of healthier lifestyles. 2014 Drive-in stores using online global interest in healthier foods. Lactose-free Major manufacturers are working to broaden their purchasing are now common across milks are also growing as consumers look for more product portfolios as the trend towards plant- Europe as are instant shopping apps 2015 easily digestible alternatives, in many markets. based protein and meat substitutes gathers pace. with local delivery with the hour. In emerging markets, beef and poultry sales are Parallel in-store and online shopping Pulses, grains and cereals are becoming more growing as chilled and frozen products gain wider 2016 experiences are epitomised by the popular elements in a healthy diet with CAGR of accessibility as cold chain infrastructure expands. new Hema supermarket shopping 2.3% forecast to 2021. Wider availability and niche concept developed by Alibaba. products, such as buckwheat or quinoa, specialist Edible oils, although a small category, is the fastest

Convenience Stores and With 22 stores open by the end aromatic rices, ancient grains such as spelt, farro growing product category as demand, volume Discounters Forecourt Retailers of 2017, plans are now in place to or kamut and seeds like chia, pumpkin and sesame, sales and price increases. CAGR growth to 2021

Supermarkets/Hypermarkets Internet Retailing rollout 2,000 branches in China are increasingly used as ingredients in foodservice. sits at 3.7% globally. Olive oil is the most dynamic over the next five years. JD.Com Home cooks are now embracing these ingredients as category responding to growing health concerns Traditional Grocery Retailers Other Dairy have also just launched 7Fresh, healthy sources of nutrition, vitamins and essential worldwide as the demand for natural, low processed, a similar supermarket concept, oils. Growth is strongest in Sub-Saharan Africa where pure oils increases in all markets. Blended oils, with 75% of all products stocked many of these products are staple elements of a palm and soya oils are also seeing growth driven Note: Channel split excludes dry pulses and semi-processed pulses comprised of fresh produce from traditional diet, but there is also strong demand in by population expansion but, in many markets, local and international sources. Latin America and Middle East & North Africa. are suffering from poor perceptions in terms of healthiness and heavy processing methods.

35 Global F&B Trends & Drivers 01 The top three countries with the biggest ethical Ethical living is an evolving markets based on the total value of ethical labels are the US, Japan and China shaped by consumer stance availability, pricing and consumption habits. This ranking excludes products that are locally Consumers increasingly evaluate produced and organic, pesticide-free products Manufacturers focus on expanding brands’ ethical credentials, sourcing and that are not explicitly ethically labelled. healthier food and beverage ranges sustainability policies with increasingly 01 effective, vocal, pressure group influence in mature and evolving markets. Consumers Strong natural, health and sustainability credentials in these markets often have the luxury of form the basis of innovation and new product NutriAsia is the Philippines’ leading 02 wide product choice or tangible experience development in global food and beverages. Products producer, marketer and distributor of of the impact of these choices. Key made from healthier ingredients, labelled to high quality sauces and condiments components of an ethical standpoint are Consumer interest is sufficiently that even in demonstrate assurances of minimal processing or but the company is now expanding environmental consciousness throughout price-sensitive markets high value sales of demonstrative health benefits from natural ingredients into beverages. The company is the the production process in regard to human ethical mainstream categories can be achieved. appeal to consumers, specifically to higher income and owner of the very successful, Locally and animal welfare, resource usage and ageing consumers in developed markets. Innovation brand of quirky juices targeting younger sustainability and transportation impact is coming from a range of start-ups and established consumers and has now expanded through to processing, production inputs companies around the globe in response to this trend. into food trucks selling a wide range of and outputs and recyclability. 03 Some examples include: Locally fruit-based drinks. NutriAsia also has a 67% stake in DelMonte Pacific. The recycling label in the most established, SECTOR FOOD AND BEVERAGES GLOBAL recognised and trusted ethical label, with product sales carrying this label reaching 02 US$700 billion worldwide. Manufacturers are responding. Proctor & Gamble is the Grupo Bimbo sales in leading markets first company worldwide to address ocean such as Canada have been boosted by the waste, launching the first commercially inclusion of ancient grains in new products produced shampoo bottle for Head & such as Dempster’s whole grain with chia Shoulders made from recycled beach plastic. as well as through acquisition of Stonemill Bakehouse. Bimbo has also entered the UK market for the first time with a range of indulgent baked snacks with the objective 04 on injecting innovation and variety into a stable, less dynamic category. Consumers are embracing clean labels in food and beverages and are looking for non- GMO, no artificial ingredients or sweeteners, 03 hormone-free or natural/organic ingredients which contribute strongly to the healthier Kellogg acquired RXBar protein bars lifestyles of consumers around the world. from maker Chicago Bar Company to expand their portfolio of healthier snacks. The product lists its ingredients prominently on the front of packaging 05 and is made without added sugar, gluten, soy or dairy. It is particularly successful A hierarchy of ethical labels is present among young millennials and health and with consumer spend primarily devoted fitness-conscious consumers in the US. to environmental causes such as carbon Kellogg has also reformulated some of its footprint, sustainable sources, recycling leading products by launching healthier labels. Secondarily, consumers will spend versions with higher fibre content, in areas of wellbeing and animal welfare on including All-Bran, FiberPlus and Nutri- products labelled as bird- or insect-friendly, Grain cereal bars sold in North America. free range, BPA free, protected origin as well as no added sugar/hormone/MSG or GMO free. Charitable causes and religious labels attain the lowest level of ethical priority.

37 Digital printing and health sensors poised to allow personalisation and diet tracking

Digital hybrid and variable printing and health sensors will support greater product tailoring, tracking and freshness guarantees. The ability to address individual, personalised dietary needs through labelling and tailoring of food and beverage packaging is forecast to be the next emerging trend. It will allow popular tracking systems to adapt by incorporating dietary evaluation and targeting for a more positive nutritional lifestyle.

01 By 2025, the US army plans to supply each soldier with a device to measure their physiological or nutritional status then sends personal data to the field kitchen which supplies the soldier with a protein-rich meal or caffeine-enhanced beverage suited to their individual needs.

Increasing regulatory control of 02 SCiO is a handheld device that can scan foods and instantly send the chemical composition to product content and packaging the consumer’s smartphone, providing nutritional values and monitoring both unsaturated and saturated fat levels. Many countries are becoming more stringent about product content, labelling and health and Both Habit in the US and Aire from FoodMarble in the UK collect personal bio samples, analyse nutrition claims manufacturers tend to make. 03 metabolism or digestive health markers and then designs a customised nutrition plan for This change comes on the back of rising obesity SECTOR FOOD AND BEVERAGES GLOBAL individuals. Tracking of food intake allows the consumer to constantly monitor their nutritional and health concerns in several developing and intake and health benefits. developed markets. Examples of this include:

01

The top three countries with the biggest ethical Blockchain and supply chain integration set to expand rapidly markets are the US, Japan and China shaped by availability, pricing and consumption habits. Blockchain is now used to trace and track food products, providing information about their location and condition This ranking excludes products that are locally along each step in the supply chain, with associated automated processes triggered to protect against tampering produced and organic, pesticide-free products or temperature changes. Blockchain also facilitates the exchange of verified and immutable information in each that are not explicitly ethically labelled. element of the supply chain. Simple implementation of blockchain technology can set triggers to alert personnel when a product nears an “out of bounds” temperature zone. For example, sensors within packaging can activate a Global packaging trigger in a delivery truck to reset the air conditioning unit or alert the driver to stop, fix the situation and record the industry undergoing condition of the goods carried at all times. Ultimately, it aims to positively impact consumer confidence and give 02 players a unique competitive edge. Some working examples are: consumer re-evaluation Consumer interest is sufficiently that even in Sustainable, environmental packaging 1 BM, Walmart and Chinese retailer JD.com have 2 Carrefour with CapGemini is piloting blockchain price-sensitive markets high value sales of is an emerging trend across all major announced a Blockchain Food Safety Alliance to eventually control its fleet of 100,000 delivery ethical mainstream categories can be achieved. segments of the food and beverage collaboration to improve food tracking and safety trolleys circulating between its warehouses and its industry. Part of this trend is driven by in China. This follows a prior alliance between Dole, stores. The pilot in the Île-de-France region, which consumer awareness and manufacturer Driscoll’s, Golden State Foods, Kroger, McCormick started in August 2017, tracks 10,000 delivery efforts towards reducing waste and & Co., McLane Company, Nestlé, Tyson Foods and trolleys in the Paris region. Carrefour has more 03 saving the environment. Adoption Unilever to collaborate through IBM’s blockchain than 5,600 stores in France and sends 1.4 billion of more recyclable containers such platform with Walmart’s Food Safety Solution. The parcels/trolley a year transported by 3,500 trucks The recycling label in the most established, as lighter-weight bottles and flexible project aims to bring traceability, transparency and on the roads daily. The project includes monitoring recognised and trusted ethical label, with packaging, such as plastic pouches and efficient and secure logistics to Walmart’s global of temperatures, shocks and blockchain product sales carrying this label reaching bioplastic formulations, are therefore food supply chain. certification of logging/unloading procedures. US$700 billion worldwide. Manufacturers on the rise. Major corporations, such are responding. Proctor & Gamble is the as Walmart and McDonalds, are now first company worldwide to address ocean committing to sustainably sourced or 3 Ripe.io uses blockchain in agriculture to monitor 4 Recently launched Agriledger, a philanthropic waste, launching the first commercially fibre-based packaging from recycled and control in-field solar powered sensors to non-profit venture, provides a mobile app produced shampoo bottle made from or certified sources. track crops, rainfall and harvest to provide designed for use with small farmer co- recycled beach plastic. detailed product information to its suppliers, food operatives in developing countries providing distributors and restaurants including Sweetgreen integrated services to the farmer and building Inc, a farm to table, US-wide restaurant chain. trust throughout the supply chain.

39 Acquisitions allow access to New protein-based foods fast growing categories ready for launch

With many companies now achieving low growth, Within the meat sector, cultured protein acquisitions and mergers bring economies of or alt-protein is gaining strength with companies successfully launching new scale and production as well as allowing leading meat and poultry alternatives while finding brands to step into fast-growing niche markets with acceptance among consumers. potential for expansion. Some examples include:

1 Nestlé has made several acquisitions in high growth trending categories in 2017, including the Blue Bottle 01 Companies such as Canadian meat super premium coffee shop brand, Chameleon company, Maple Leaf Foods, acquired Cold-Brew as well as investments in niche brands US meat alternative brand Field such as meal kit start-up Freshly and plant-based Roast Grain Meat Co earlier in 2017. food brand Sweet Earth. Likewise, Kraft Heinz, also interested in the fast-growing coffee market, Others, such as Memphis Meats or has acquired Cerebos’ food and instant coffee 02 the Alternative Meat Company, are Operational technology and logistics underpin the expansion business from Suntory, with a number of market- focusing on developing beef, chicken of retailing giants leading brands across Australia and New Zealand. and duck meat from cultured cells of each bird, producing “clean poultry.” With fresh food becoming central to trust between consumers, manufacturers and retailers, 2 Frutarom, a tastes, colours, antioxidants and natural state-of-the-art logistics and distribution services are developing warehousing options that take speciality ingredients company, has acquired at least Impossible Foods in Oakland, GLOBAL FOOD AND BEVERAGES SECTOR FOOD AND BEVERAGES GLOBAL advantage of advances in robotics and machine learning. For example: 10 companies in 2017 as it aims to create ‘unique California has the capacity to produce natural solutions combining taste and health’. 03 1.4 million pounds of alt-meat per Innophos, another speciality ingredient producer, month, with each pound making four Rewe Group, is pressing ahead with plans to expand its fresh food delivery service 01 is targeting high-growth markets, such as stress burgers. It now sells in 40 upscale in Germany by building a new centre in Cologne for the fulfilment of online orders. reduction, weight management, joint health, brain restaurants, including New York Described as a ‘Food Fulfilment Center 2.0’, the new facility occupies a site the size of health and metabolic wellness, through its acquisition City’s trendy Momofuku Ssäm Bar. two and a half football pitches and is expected to be operational by 2018 summer. It will of NutraGenesis for US$28 million in late 2017. be packed with state-of-the-art, automated technology that promises to bring Rewe up Kerry Foods has also added Ganeden, a probiotics to speed as far as competing with the likes of Amazon, according to FruitNet. manufacturer with 135 patents, to its portfolio with the expectation that it will add 4-6% growth 02 Online retail giant Amazon continues to roll out its AmazonFresh service across Europe, in its taste and nutrition operations per annum. Changes in culture and socialising as Alibaba rolls out its Hema concepts in competition with JD.Com’s new 7Fresh retail outlets in China. Alibaba’s AliExpress services are now present in , 3 Plant-based protein, meat alternatives and are impacting food and beverages while the company has also extended its reach into the UAE providing support for the plant-based beverages are also targeted with Increased socialising among young urban professionals development of the InstaShop grocery delivery service. Tyson Foods’ acquisition of AdvancePierre and a growing acceptance of social drinking among and its planned divestiture of its non- young Muslims in countries from the Middle East to Alibaba has also taken a controlling interest in Cainiao, its backbone logistics supplier, protein divisions (Sara Lee frozen bakery 03 South East Asia are affecting foodservice sales of and has announced its intention to invest US$15 billion over the next five years to extend business, the Kettle business, and Van’s. its ecosystem and support its retail strategy in the coming decade. Cainiao was founded foods and beverages. Non-alcoholic mixers and soft drinks have seen increased sales as young Muslims in 2013 to improve the delivery of online purchases across China but has now extended 4 Coca-Cola’s acquisition of AdeS, a plant-based socialise in restaurants and coffee shops. For example, its footprint worldwide with the goal of delivery anywhere in China within 24 hours and beverages company in Brazil and Culiangwang, a in Indonesia, where the majority of the population anywhere in the world within 72 hours. According to Forbes, Alibaba is set to build a multi-bean and grain-based beverage manufacturer are Muslim, beer manufacturers such as Guinness and second datacentre in Europe to directly compete with Amazon for market share in cloud in China, is part of its long-term strategy of Bintang are explicitly communicating the differences computing services. developing prime positioning within the health between alcoholic and non-alcoholic beers to and wellness food and beverage category. This encourage sales. 04 Warehouse automation and robotics, including automated guided vehicles, are slowly is in addition to previous acquisitions in Latin moving the industry towards fully automated robotic picking. Exotec Solutions, from America’s juice/dairy/plant-based category Women are working in increasing numbers or France, has launched Skypods, warehouse robots that can climb warehouse racks and including brands such as Jugos del Valle (multiple socialising out of home in the growing number of tea pick up to 400 items an hour from any level. The robots can reach speeds of 10mph and Latin America markets), Santa Clara (Mexico), and coffee houses, enjoying new flavours and origins are able to carry a payload of up to 30kg at a time. Tonicorp (Ecuador), Estrella Azul (Panama) of tea and coffee for the first time. Young families can and Verde Campo (Brazil), among others. now afford to eat out or use delivery services, with Ocado, in the UK, is using a hive of robots, powered by machine learning, to monitor 05 many favouring westernised food ranges which they and pick goods from a range of 50,000 kinds of products in three temperature regimes 5 KraftHeinz continues to mull acquisitions after are then encouraged to replicate for their children as well as segregated products. The robots act like a swarm, assisting each other in its failed attempt to capture Unilever. Mooted at home. Demand for cheese and drinking milk, for accessing goods in lower warehouse layers with no aisles. Ocado is also testing driverless potential targets include PepsiCo, Mondelez or example, has increased in China, Vietnam, Pakistan, delivery trucks and robotic hands for picking more sensitive and irregular products. Colgate Palmolive, as a strategy to meet the Indonesia, Egypt and Saudi Arabia with ready meals challenge of industry scale achieved by global seeing strong demand in Thailand, Vietnam, Turkey and retailing giants such as Amazon and AliBaba. South Korea.

41 Global Consumer Europe is a large but slow-growing market, with casual dining experiences is expected to result in fast food, particularly premium burgers and fast falling sales as more affordable chained operators casual food expected to outpace all other consumer expand their networks. Growth is expected to Foodservice Footprint foodservice categories in value terms. Value is being be strongest in chained fast food with cafes and created by developing new formats and concepts quick service restaurants the focus of growth. A with quick service, reduced menus and even mono- trend towards partnerships with leading grocery product offerings. Full-service restaurants, the retailers allows operators, such as Starbucks or most popular format in Europe, consist mainly of Sushi Daily, to open outlets in major stores. Asia Pacific remains the growth engine in foodservice independent operators but the trend towards more

Global foodservice sales reached US$2,662 billion in 2016, and is forecasted to reach US$2,734 billion in 2017 , with the Asia Pacific region alone accounting for 44% of total spending and still maintaining one of the strongest growth forecasts globally. By 2021, total value sales in foodservice are forecast to top US$3,001 billion. Exhibit 14 Global foodservice breakdown by service type, 2011–2021 Exhibit 13 Total foodservice value sales in 2016, 2021 & CAGR 2016-2021 US$ billion

- 500 1,000 1,500 2,000 2,500 3,000 3,500

2011 642bn 546bn SECTOR FOOD AND BEVERAGES GLOBAL Europe 2012 1.8% 1.3% 2013 586bn 1,363bn 512bn 2014 North America 104bn 3.1% Asia Pacific 2015

2.9% 1,171bn 2016 90bn

21bn 2017 Source: Euromonitor International analysis from Passport

Sub Saharan 3.3% Middle East Africa & North Africa 2018 270bn 18bn 54bn 2019 Latin America 2.6% Australasia 238bn 2.8% 2020 47bn 2021

KEY : Inner circles indicate foodservice value sales in 2016, outer circles indicate foodservice value in 2021 Full-Service Restaurants Fast Food Cafe/Bars The distance between the circles indicates the size of absolute growth

Colour of the circles indicate the growth rate Fast Moderate Slow Static Street Stalls/Kiosks 100% Home Delivery/Takeaway Self-Service Cafeterias Source: Euromonitor International analysis from Passport

Asia Pacific is the largest market both in terms Convenience stores are increasingly adding hot Full-service restaurants remain the most popular format globally but it is a very fragmented industry with many of value as well as population, with increasing and cold take-away instant service, while coffee independent operators and few large-scale chains. In Asia Pacific full-service restaurants represent 64% of the total urbanisation and natural population growth driving shops, the fastest growing foodservice category, foodservice market with lower shares in North and Latin America and Europe at 41-42% in 2016 and 2017. Full- growing demand. Although a highly fragmented increasingly offer sandwiches, hot bakery items and service restaurants in India, for example, are benefiting from rising incomes and employment growth, which have industry across this region, Asia Pacific is the sweet and savoury snacks in convivial surroundings. increased the popularity of out-of-home dining. Restaurant dining is finding greater acceptance among those under second largest global market for fast food, with Asian-style fast food is a firm favourite, but healthier 30 years who have an increased willingness to try new foods and fine dining experiences with friends and family. its biggest consumer bases in China, Japan, and alternatives are becoming more common. KFC, Leading hotels here and in other Asia Pacific markets are the principle forms of chained restaurants. In contrast, India. Expansion in this sector is primarily driven China’s largest restaurant chain, recently launched value priced operators such as Yum!’s Pizza-Hut dominate in China, it now has the widest market presence in this by young consumers, rising incomes and growing K Pro from KFC, the first of this chain’s salads market with HaiDiLao Hotpot operating 200 stores in China and expanding in Singapore, Japan, Korea and the US. urbanization, as single person householders look to spin-offs, serving fresh smoked salmon, prawns, foodservice to provide them with affordable meals. salads and sandwiches with grilled, rather than fried, chicken. Dicos, Ting Hsin’s chicken fast food chain, plans to open 10,000 new stores by 2030.

43 Fast food, in many formats, is changing, with cleaner in almost all residential areas. Chained kiosks in Brazil ingredients, healthier cooking methods and added allow for the opening of multiple, lower operational technology central to new operating methods. cost outlets as quick service companies expand. New chained offerings based on more wholesome Food trucks are also increasingly popular across Latin ingredients and simpler menus are appearing in all and North America allowing for premium, on-the-go markets with healthy indulgence a keystone of modern consumption, specialist menus and use of fresh local presentation in fast food. New fast casual brands ingredients, but in Latin America this trend in tempered focus on experience rather than value, high quality by consumer confidence and spending behaviour, healthy ingredients, locally produced where possible, particularly under harsher economic conditions. signature menus, community Delivery service opportunities links and peer collaboration. For abound as mobile apps and online example, Element Fresh in China “E-commerce is ordering escalates in all regions. It is a fast-growing quick serve chain growing by leaps and is estimated that 79% of Chinese with 40 outlets selling salads, consumers order multiple times a organic food, superfoods, juices bounds. Differential week, with an average order value of and smoothies with its declared US$5.88. On-demand food delivery unique selling point of delivering proposals are made tripled in 2017 in China according “the freshest food in China”. in this channel, to Meituan-Dianping, a foodservice- Cafes & bars continue to expand focused e-commerce platform. with major chains developing sometimes combos are Both aggregators, like Just Eat their networks around the globe. and delivery specialists, such Starbucks, for example, opened offered with gifts or as Deliveroo or Uber Eats, are 2,612* new outlets in 2017 exclusive varieties.” changing the delivery model in nearly twice as many as added many markets, with Uber Eats in 2015, with strong regional Unilever launching in May 2017 for the first franchise holders adapting time in Mumbai following success menu items and service offerings to local tastes. in Bangkok, Singapore, Tokyo, Hong Kong and Taipei. Forecast growth is expected to be strongest in Asia Swiggy, Foodpanda and Zomato are the major food Pacific, Middle East & Africa and Latin America. delivery companies operating in India but all have The fastest growing category is Street Stalls/Kiosks yet to reach payback status. In the US, a recent as consumers increase their on-the-go consumption survey by Morgan Stanley reported that consumers in many regions. The highest penetration is in North ordering food for delivery in the past six months rose and Latin America, but street food and snacks are to 47%, with 43% of these stating that the delivery increasingly popular across Asia Pacific. Street Stalls/ replaced a meal at a restaurant. The greatest growth Kiosks in India sell different types of fried fritters, in ordering interest is from coffee and burger chains. samosas, tikkas, tea and baked goods and are present Between October 2016 and October 2017 total openings, not net change Beverages Beverages Industry From Farmers to Consumers BEVERAGES

Beverages Industry - At a Glance

Middle Hot Drinks North Sub-Saharan Asia Pacific Australasia Europe Latin America East & North America Africa Africa Production of coffee and tea threatened by climate change Consumer spending on and price volatility beverages 5% 12% 9% 10% 7% 11% 5% as % of Tight supply and growing total F&B demand creates volatility in

Georgia Argentina Oman Ghana pricing exacerbated by harvest Key Growth Moldova Venezuela Algeria Gambia New Zealand Canada quality and quantity, which Markets Bhutan Cyprus Guatemala UAE Sudan Australia US is often strongly affected by (2011-2016) Serbia Ecuador Egypt Niger Montenegro Chile Lebanon Senegal weather conditions.

Bottled Water Carbonates Carbonates Carbonates Carbonates Carbonates Bottled Water

(18%)* (34%) (23%) (42%) (28%) (31%) (30%) INDUSTRIES OF F&B COMPOSITION Key Sub- RTD Tea (17%) Juice (15%) Coffee (21%) Bottled Water Bottled Water Bottled Water Carbonates categories* Carbonates Sports & Energy Bottled Water (16%) (19%) (17%) (28%) (13%) Drinks (13%) (19%) Coffee (12%) Juice (18%) Juice (15%) Coffee (16%)

Traditional Grocery Supermarkets/ Supermarkets/ Traditional Gro- Supermarkets/ Supermarkets/ Retailers (58%) Supermarkets/ Hypermarkets Hypermarkets cery Retailers Hypermarkets Hypermarkets Hot drinks Supermarkets/ Hypermarkets (91%) (62%) (44%) (59%) (48%) Hypermarkets (61%) Key Traditional Traditional Gro- Supermarkets/ Traditional Gro- Traditional (33%) Discounters Channels** Grocery cery Retailers Hypermarkets cery Retailers Grocery (15%) Supermarkets/ Retailers (3%) (29%) (42%) (25%) Retailers (42%) Hypermarkets Process Farming Processing Manufacturing Distribution (33%)

Internet retailing Internet retailing Hot drinks Internet (39%) Internet retailing (7.3%) Internet retailing Activity • Plantation • Roasting • Packaging • Logistics Fastest Others (9.7%) Internet retailing retailing (22%)

Convenience (18%) Convenience (15%) • Growing • Grinding • Branding • B2B Sales Source: Euromonitor International analysis from Passport Internet retailing (39%) Supermarkets/ growth chan- Stores and Fore- Discounters Stores & Discounters (4.6%) Others (14%) Hypermarkets tea, coffee, • Blending • Secondary • B2C Sales nels (CAGR court Retailers (6.1%) Forecourt (2.3%) (2.9%) 2011-16) (9.2%) Retailers (3%) chocolate, etc. processing

Traditional Supermarkets/ Convenience Hot drinks Grocery Traditional Gro- Stakeholder • Farmers • Domestic & • Processors • Wholesalers Hypermarkets Stores & Traditional Slowest Others (-1.5%) Retailers Traditional cery Retailers • Seed and plant International • Manufacturers • Traders (0.4%) Forecourt Grocery growth Supermarkets/ (-4.2%) Grocery (1.6%) Traditional Retailers (-4.4%) Retailers providers processors • Retailers Hypermarkets Convenience Retailers (-2.7%) Supermarkets/ channels Grocery Traditional Gro- (-1.7%) (4%) Stores and Others (-0.3%) Hypermarkets • State bodies manufacturers • HORECA (CAGR Retailers cery Retailers Others (-1.6%) Forecourt (5.4%) and traders • Institutions 2011-16) (1.1%) (0.5%) Retailers (-0.5%)

Supermarkets/ Supermarkets/ Traditional Gro- Traditional Gro- Traditional Outputs • Te a • Te a • Loose, pod, • Bulk Hypermarkets Hypermarkets Traditional cery Retailers cery Retailers Supermarkets/ Grocery Source: Euromonitor International analysis from Passport • Coffee • Coffee bean, ground • Tertiary Soft (71%) (50%) Grocery related to (45%) (36%) Hypermarkets Retailers (74%) Convenience Traditional Retailers • Cocoa • Processed packaged, products drinks Key Supermarkets/ Supermarkets/ (53%) Supermarkets/ Stores and Grocery (38%) industry Channels** Hypermarkets Hypermarkets Others (21%) Hypermarkets cocoa instant, RTD Forecourt Retailers Others (29%) (33%) (36%) (12%) • Chocolate Tea & coffee Retailers (20%) (20%)

Internet Internet Internet retailing retailing Soft drinks Internet retailing (22%) Discounters (4%) Fastest Internet retailing Internet retailing retailing (20%) (18%) Convenience (22%) Convenience growth chan- (10%) (3.9%) Supermarkets/ Traditional Stores and Internet retailing Stores and Both coffee and tea are grown in large and small new varietals resistant to extreme temperatures, Others (2.1%) Others (3.6%) Hypermarkets Grocery nels (CAGR Forecourt (19%) Forecourt (6.2%) Retailers estates in specific geographical zones around pest, disease or drought required. Consumer 2011-16) Retailers (6.9%) Retailers (10%) (2.8%) the globe. Coffee is now grown by an estimated demand is also changing with consumers switching 25 million farmers in more than 60 tropical from black tea to green, white and herbal teas or Traditional Traditional Supermarkets/ Convenience Soft drinks Others Traditional countries. Tea is grown in about 62 countries from instant to pod to bean in coffee generating Grocery Grocery Hypermarkets Stores & Discounters (0.3%) Grocery Slowest Retailers Retailers (1%) Forecourt around the world, with China, India and Kenya increased demand for products in short supply growth (-0.2%) (-1.4%) Traditional Retailers (-1%) Traditional Retailers the three largest producers in the world. and stimulating change in production processes. channels Others Convenience Grocery (-1.7%) Supermarkets/ Grocery (5.4%) (0.1%) Stores and Retailers Discounters (CAGR Hypermarkets Retailers Discounters Forecourt (3.9%) (0.9%) Production of both coffee and tea is very susceptible Many growers on small scale coffee and tea farms 2011-16) (0.4%) (1.3%) (6%) Retailers (1.1%) to changes in weather patterns with investment in are older farmers with little interest in investing in

Note: * Market share of overall edible oils market in 2016 ** Market channel share of overall edible oils market in 2016, excludes dry pulses

47 their stock of trees, which can be up to 80-90 years Currently, production of coffee outstrips supply old. Advocacy for farmer rights, increased education creating price volatility in the international Bottled Water and training in farming techniques, sustainability commodity market. In turn, this affects all links Scarce water resources coming under pressure as bottled water sales expand BEVERAGES and certification processes are now the focus of in the supply chain particularly in the country attention as a technique for encouraging farmers of cultivation and primary processing. The to remain in the industry, improving income and future commoditisation of tea may lead to the continuing to grow these crops instead of switching emergence of a new tea trade model changing to cash crops with a faster payback period. the dynamics of supply and pricing systems. Process Farming Processing Manufacturing Distribution

Activity • Water • Purification • Flavouring • Logistics Source: Euromonitor International analysis from Passport collection and • Carbonation • B2B Sales extraction • Bottling • B2C Sales

Soft Drinks Stakeholder • Water • Domestic & • Manufacturers • Wholesalers Companies International • Traders Changing demand for sugar strongly influences supply • Government producers & • Retailers chain dynamics agencies manufacturers • HORECA Sugar cane, the basis for 80% of sugar and a central • Institutions element of syrups used in soft drinks, is criticised as one of the most water hungry plants in the world. It also Outputs • Potable water • Bottled water • Flavoured • Bottled creates by-products that can have a heavy environmental related to water water impact. Threats to sugar cane production include non- • Carbonated industry INDUSTRIES OF F&B COMPOSITION sustainable farming practices, droughts, desertification, water changing weather patterns and water scarcity. • Still water

Sugar content regulation continues to grow with the introduction of government-backed schemes to limit consumer intake. One such scheme is the EU abolishment of national sugar beet production quotas in 2016 allowing farmers to extend their crops resulting in a decrease in the overall importation of sugar, sugar cane and sugar Global growth in value sales of bottled water beets with an expected decline in global sugar prices. is evident, with many Asia Pacific, Middle East and Africa and Latin American markets growing at an elevated rate. However, such large and growing consumption puts stress on domestic natural water resources and the environmental impact of producing and recycling large volumes of PET bottles.

Process Farming Processing Manufacturing Distribution Water scarcity and access to potable water remains a major concern in many developing Activity • Fruit cultivation • Roasting • Packaging • Logistics countries. Public pressure for the curtailment of • Sugar cane/beet • Grinding • Branding • B2B Sales unsustainable use of water is now affecting the cultivation • Blending • Secondary • B2C Sales commercial operation of beverage production processing companies in some regions e.g. Coca-Cola and PepsiCo in India. Climate change and increasing urbanisation will put increasing pressure on the

Stakeholder • Farmers • Domestic & • Manufacturers • Wholesalers Source: Euromonitor International analysis from Passport • Government International • Traders • Traders management of water resources for agriculture, agencies processors • Processors • Retailers industry and human consumption. manufacturers • HORECA In packaging terms, PET is coming under and traders • Institutions growing pressure from a sustainability perspective as the introduction of this Outputs • Fruit crops • Juice • Carbonates • Soft drinks packaging format into many products and new related to • Sugar cane crop • Syrup • Juice markets is rapidly increasing the need for viable, • Sugar beet crop • Concentration industry profitable and extensive recycling options. It is estimated that annual consumption of plastic bottles is set to top half a trillion by 2021, far Other • Biomass • Sugar • Other • Other outstripping recycling efforts and jeopardising outputs • Ethanol oceans, coastlines and other environments. • Anhydrous alcohol

49 Market Size and Potential Exhibit 16 Beverages regional value sales breakdown in 2016, 2021 BEVERAGES

Asia Pacific 2016 2021

Moderate growth for beverages expected as consumer choices evolve Australasia 2016 2021

The total beverage market in 2016 stood at US$630 billion up from US$559 billion in 2011. It is forecast to reach US$644.5 in 2017. Overall growth is expected to be moderate but will feature major shifts in consumption as consumers are enticed by new products and flavours. Bottled water, in particular, is set to Europe 2016 2021 Source: Euromonitor International analysis from Passport expand strongly due to a growing population and as a healthy, and convenient alternative to carbonates.

Exhibit 15 Beverage value sales in 2016, 2021 & CAGR 2016-2021, US$ billion Latin America 2016 2021

Middle East and North Africa 2016 2021

146.0bn 142.3bn INDUSTRIES OF F&B COMPOSITION Europe North America 2016 2021 1.5% 1.4% 135.6bn 133bn 235.8bn North Sub-Saharan Africa 2016 2021 America 44.7bn 2.8% Asia Pacific 0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100%

4.2% 205.0bn

29.3bn 36.5bn

Sub Saharan 6.8% Middle East Hot Drinks Soft Drinks Africa & North Africa 270bn 21.1bn 9.6bn Latin America 2.6% Australasia 238bn 1.3%

9.0bn

In Australasia, fresh and pod coffee from speciality sources is growing KEY : Inner circle indicates beverages value sales in 2016, outer circle indicates beverages value sales in 2021 in popularity as consumers look to The distance between the circles indicates the size of absolute growth replicate the expanding foodservice offering at home. High caffeine Colour of the circles indicate the growth rate Fast Moderate Slow Static drinks are particularly attractive Source: Euromonitor International analysis from Passport to younger consumers with new double shot pods available for home consumption. Tea increasingly Sub-Saharan Africa is the fastest growing region for the expanding foodservice offering at home by appeals to consumers for the beverages mainly driven by high demand for tea. This showing positive interest for high caffeine drinks. health and functional benefits it in turn has boosted sales of categories such as RTD tea offers, with manufacturers overtly Growth in value sales of hot drinks also surpasses across emerging retail channels such as convenience promoting organic alternatives to that of soft drinks in Europe, Asia Pacific and Latin and forecourt retailers. Consumption of coffee is standard black tea from sources America. Trading up, wider retailing distribution growing with a cafe culture developing, driven in part other than China following a recent and availability influence the growth of packaged by the investment and expansion of both domestic health scare. According to one hot drinks particularly in convenient forms for and major international brands such as Starbucks, of the leading tea manufacturers on-the-go consumption in small pack or single Café Neo, Kaldi’s Coffee, Vida e Caffé and others. operating in Australia, tea trends servings in RTD formats. Manufacturers are relying are moving towards herbal options. Australasia is the slowest growing market. Consumers on innovations in carbonates to stimulate sales. Moreover, black tea is mainly in both Australia and New Zealand have been Lower sugar, low and zero calorie, new flavours, switching to hot drinks from cold as they look for raised caffeine levels, increased soy and juice and healthier alternatives to sweetened drinks or those water-based drinks are on offer as governments with artificial ingredients. Consumers replicate ramp up health awareness campaigns.

51 Market Trends and Drivers BEVERAGES consumed by the female population aged over 65, while green tea or other herbal teas with healthier value propositions are preferred by health-conscious consumers. RTD tea products are consumed by Natural, healthy and younger consumers as a replacement for carbonated functional beverages drinks. Carbonate value sales are near stagnant as consumers turn their back on colas and other continue to expand carbonates in favour of more healthy juice-based Limited processing and manipulation drinks, low calorie ginger beers, and more premium of functional values appeal to tonic and bitter mixers with smaller serving sizes, consumers on the back of growing lower prices and heavy promotional activity. health awareness. Naturally brewed RTD teas, fruit flavoured or herbal Growth in value sales of hot drinks surpasses that hot tea, low/zero-caffeine RTD of soft drinks in Asia Pacific. Tea is seen as a healthy coffees with enhanced antioxidant alternative to carbonates and concentrates with properties, cold-brewed coffees, consumers also looking for the benefits associated functional bottled water or teas with added vitamins, herbs, botanicals, with green, white and fruit/herbal teas, predominantly minerals or amino acids are now as an aid to digestion or skin beauty. Trading up achieving premium positioning. is occurring in coffee and other hot drinks and is Pure leaf, Brain Füd, T Plus or strongly supported by advertising. According to one Suja are examples of companies INDUSTRIES OF F&B COMPOSITION of the leading global coffee manufacturers operating taking advantage of this trend. Product content and New distribution in Japan, Japan, Indonesia and the Philippines are packaging come models and the most significant coffee markets in the region. the challenge is being able to take advantage of under increasing specialised packaging Previously an exclusively tea consuming country, this trend as in some Latin American countries, tea Japan has become the 3rd most prominent coffee- regulatory control continue to evolve is considered a beverage that is only used when importing nation in the world, thanks to education someone is ill or they have stomach discomfort.” Information on beverage Manufacturers in many In developed countries, campaigns and ever-growing foreign culture exposure. countries are working to subscription beverage home Moreover, Japan’s coffee sales are value driven, with Overall, hot drinks are growing more quickly than soft content is key to adapt their products to lower delivery services continue to consumers preferring high quality coffee products. drinks across Europe. The coffee revolution continues integration into consumer the levels of sugar to attract evolve in an effort to attract However, retail sales are still smaller compared to to expand into all retail channels and the introduction lifestyle choices lower tax bands. Consumer health conscious and high-income out-of-home consumption due to high retail prices. of RTD coffee spurs growth. Rising awareness of health pressure groups are working consumers. Such delivery services towards the creation of legal are mainly popular for speciality In soft drinks, markets such as Bhutan, Nepal and concerns about sugar and artificial ingredients is Information on sourcing and ingredient definitions of health claims coffee and tea in bean or loose Sri Lanka have shown the greatest growth in value changing consumer perspectives on the consumption levels through new digital packaging used on beverage labelling, leaf formats popular from local printing methods are on the rise to sales. China and Japan are the largest markets but of soft drinks with decreasing sales exacerbated by including concerns about or cross-border services. For help consumers decide if a product growth is negligible in Japan where manufacturers slow population and economic growth. Carbonates, packaging claims of eco, green example, TeaBox, Simple Loose fits into their drive for a healthier are relying on innovations in carbonates, such in particular, are suffering as consumers switch to or bio. The EU Parliament Leaf and Deluxe are lifestyle. For instance, in Australia, waste committee has voted to suppliers of premium teas in the as raised caffeine levels, to stimulate sales. Not other convenient soft drinks in the search of healthier country of origin is mandatory on hot amend its Waste Legislative US providing monthly delivery From Concentrate 100% juice, bottled water, and options such as reduced sugar, flavoured water, juice, tea product labels. QR codes are one Package to encourage higher of tea tailored to the consumer’s sports and energy drinks grew more robustly functional drinks and organic formulations. Black such method and their use is expanding levels of recycling. The EU also personal preferences, while than the industry average in 2016 and 2017. tea is the dominant hot drink in Eastern Europe with within restaurants and foodservice. continues to clamp down on Bruu in the UK supplies gourmet For example, in association with Russia leading sales. However, green and herbal teas the use of Bisphenol A (BPA) in teas with 25-40 cups per Coffee is the preferred hot drink in Latin America digital wallet providers SnapScan , are driving values sales, particularly in Russia, Poland, the manufacture of packaging delivery. Paper-based and tetra with tea and mate also popular in Chile, Argentina that can now be used in South Africa Lithuania and Hungary, as consumers look for the for food and beverages, with pack formats are increasingly and Uruguay as growth in hot drinks outstrips that in a wide array of locations to access draft regulations on BPA limits used for easy delivery and health and wellness benefits offered by these products. information on product content, of soft drinks. High frequency consumption drives in development. storage as well as being an make reservations, purchase or pay. value sales of coffee in Brazil with coffee available Tea is the traditional drink in many countries in the alternative to PET bottles. in many forms including pods and beans for home Middle East and North Africa, with growth in hot consumption. Despite the imposition of a sugar drinks surpassing that of soft drinks. The expansion tax covering carbonates, nectars, juice drinks and of cafe culture continues across the region with flavoured bottled water among others, soft drink young consumers in many countries adopting a more sales in Mexico continue to grow. Manufacturers are westernised diet and increased use of foodservice The introduction of sugar taxes gains momentum also promoting single servings in small pack sizes in outlets and convenience stores for on-the-go distinctive new glass, PET and can shapes, offering consumption. There is a shift towards healthier cold Changes in consumption patterns due to increased health consciousness present a challenge to all elements of convenience for on-the-go consumption while drinks in Egypt, Saudi Arabia and the UAE as the the supply chain. In addition, many governments believe that a price increase is more effective than educational driving value sales growth. According to Unilever variety of products on offer, as alternatives to tea, interventions and have incorporated “sugar taxes” into their efforts to encourage citizens to consume healthier alternatives. The World Health Organization in 2016 urged all countries to consider adopting taxes to curb obesity, Argentina, hot tea may offer great opportunities as it increases including reduced/no sugar options. Bottled but campaigners face strong opposition from food and beverage companies. is natural and sugar-free; it has 0 calories: “Currently, water growth is visible in all countries, with juice and there is a trend within the entire food and beverage low-fat drinking milk also popular. The high number Seventeen countries including Denmark, Finland, France Hungary, Mexico, Norway, the Philippines, Saudi Arabia, industry towards more natural products. However of visitor and pilgrims to the UAE and Saudi Arabia the UAE, Brunei and others already have regulation and taxes in place that target consumption of sugar with eleven strongly increase demand for portable bottled water. others, including South Africa, the UK and Ireland, implementing or debating the introduction of these initiatives. Others like Singapore have a voluntary code of practice among beverage manufacturers targeting sugar consumption.

53 Distribution Landscape BEVERAGES “We are already seeing a higher Super/Hypermarkets continue to dominate retail demand and more volume sales in all beverage categories sales (at convenience

Although internet sales saw positive growth, bricks and mortar stores still stores and retail) vastly overshadow sales of most beverage categories. due to health and

Exhibit 17 wellness. Global soft drinks volume sales split by retail channels, 2011-2016 Global soft beverages manufacturer

- 100.0 200.0 300.0 400.0 500.0 600.0

2011 INDUSTRIES OF F&B COMPOSITION Source: Euromonitor International analysis from Passport

2012

2013 Supermarkets and hypermarkets market rate. Expansion in Europe In developing markets, young retain their dominant position and Australasia helped maintain families and younger consumers 2014 in sales of beverages, but their their position but supermarkets often dominate beverage sales, overall share is slowly dropping as and hypermarkets have worked with access to mobile phones and sales through convenience stores hard to limit their share growth social media a strong influencer. 2015 and forecourt retailers increase. with fierce competition on price Rapid urbanisation allows new Traditional grocery retailers have and quality in many countries. households to access a wide 2016 managed to retain their global array of products with digital- Internet retailing growth has market share, unchanged from focused brands benefitting been strong albeit from a small 2011, despite strong investment from strong interaction and base with expansive growth in in modern retailing in all regions. decision making among younger Asia Pacific, Australasia and the consumers. In Asia Pacific, for Exhibit 18 In many markets, convenience Middle East and North Africa example, the fastest growing Global hot drinks volume sales split by retail channels, 2011-2016 stores and forecourt retailing is region. Internet-based beverage retail channel will be mobile. New still expanding not just in terms sales account for 2.3% of the consumption opportunities are of the size of their networks global market. Cross-border arising with new habits being but also in the range of services sales of speciality drinks, such formed. For instance, in Japan, - 2,000 4,000 6,000 8,000 10,000 12,000 14,000 they provide. Hot drinks, in as coffee and tea, drive internet vending machines for coffee particular, are seeing strong sales with convenience purchases 2011 are becoming more important Source: Euromonitor International analysis from Passport growth in this channel as hot through mobile apps for home for manufacturers. Information coffee and tea is introduced into delivery increasingly used. and positive reinforcement forecourt retailing with vending 2012 In mature markets such as Europe increasingly comes in the and drip coffee machines also and North America, the ageing form of online interaction with becoming more commonplace Convenient Stores and and urban populations and leading brands, reinforced in 2013 Forecourt Retailers in convenience stores. shrinking household sizes will store through extensive use of Supermarkets/Hypermarkets Despite strong investment in increasingly place constraints on promotions and discounting. 2014 expansion of their networks, retailing in terms of accessibility, Retailing must also manage Traditional Grocery Retailers discounters just maintained their packaging sizes and income expanding numbers of low income households and the 2015 Discounters overall market share at 5% and levels with smaller stores more 6% for hot drinks and soft drinks suited to busy consumers need for affordable beverages Internet Retailing respectively unchanged from shopping for themselves in in smaller pack sizes. 2016 2011, and saw moderate volume expensive city centres. Other Dairy growth just below the overall

55 Challenges and Opportunities BEVERAGES

Rising health and wellness awareness towards beverages with Product customisation is the key to capitalising opportunities sugar impact less diverse manufacturers to a greater extent across most regions

Challenges Opportunities

Unsustainable Rising consumer Smaller pack sizes with Consumer willingness farming practices, health and wellness higher profit margins to try new and disease and weather awareness impacting that allow consumers

innovative products INDUSTRIES OF F&B COMPOSITION pattern changes sugar heavy to try new tea flavours categories

Lack of training and Increasing agricultural support Entering African Smart packaging to regulatory control to stabilise and markets with packaged ensure freshness and of ingredient expand production drinking water low use of preservatives content e.g. sugar of key crops

Higher production Mismanaged water Agricultural Increasing demand for costs due to increasing resources creates developments and premium products, such regulation of packaging scarcity and higher technologies as signature tea types e.g. PET Bottles, BPA- access charges to improve the crops from around the world free coatings

Strategic deals with well- Shift to healthier drinks Regulatory controls established local companies Increased demand in developed markets on sourcing from to improve distribution for scarce and increasing demand specific countries due networks as well as brand ingredients and for carbonated soft to political turmoil presence in markets with resources drinks and energy drinks complex distribution models in emerging markets and low cultural proximity

Lack of consumer Expanding target Still immature Greater emphasis awareness of fresh and population in key growth understanding of on sourcing concentrated juices, regions such as Asia health and wellness in and processing their expectation is that Pacific, Middle East and developing economies transparency they should both have North Africa and Sub- offers room for growth the same taste and price Saharan Africa

Supplier/farmer Manufacturer Wholesale/import-export Retailer KEY Moons indicate the level of direct impact on each industry. The fuller the moon, the higher the direct impact Low High

Source: Euromonitor International analysis from Passport, trade interviews and desk research Source: Euromonitor International analysis from Passport, trade interviews and desk research Note: Level of impact mentioned is extrapolated by Euromonitor International based on its market understanding. Note: Level of impact mentioned is extrapolated by Euromonitor International based on its market understanding.

57 Case Study: Uni-President

Uni-President leads through rapid market orientation by following the emerging trend in ready to drink tea in East Asia where consumers are shifting towards convenience

Name of company Uni-President

Coverage A large food, beverage and retail company based in Taiwan but active across South East Asia region.

The company’s core business in soft drinks focuses on bottled water, juice, RTD tea and RTD coffee.

Why Uni-President did it? Uni-President Enterprises Corp. proactively deploys nation-wide sales channels and production locations in order to solidify its brand and develop a stronghold in the Chinese market. Company’s growth strategy stems from rapid market orientation through close follow up of the market trends

Key characteristics of growth The company is expanding its market presence through trend-based product innovation.

Consumer Expenditure 1. Frequent new product launches involving unique flavours e.g. Gouran plant-based energy drink launched in June 2017.

2. Ethical product positioning highlighting health and wellness e.g. Super premium plant-based energy drink Revive or Huan Xing. The product is positioned as a natural product with the label “Nature Lab”.

3. Rebranding of existing products: e.g. Haizhiyan Sea Salt Lemon Water has been introduced into Indonesia under a new name Nu Oceana (positioned as a hydration drink).

4. Targeted marketing via social media and careful packaging e.g. Classmate Xiaoming targets students and young adults through brand slogans, novel packaging and an effective social media presence.

Outcome Off-trade value sales growth for key categories such as RTD tea up by 4% in 2016.

Flagship brand, Classmate Xiaoming, continues to grow both volume and value sales.

Uni-President has completed construction of the first phase of its new production base in Shanxi with capacity for 600BPM aseptic cold filling line and PET bottle production lines, able to produce 12 million pieces of fruit juice and tea drinks per year; Phase II is now under construction to build a carbonated beverage line, with annual capacity at 13.65 million pieces.

Source: Euromonitor International analysis from Passport, trade interviews and desk research Dairy

59 Dairy Industry From Farmers to Consumers DAIRY

Dairy Industry - At a Glance Supply chain robustness is key to combating rising production costs Middle North Sub-Saharan Asia Pacific Australasia Europe Latin America East & North America Africa Africa

Consumer Process Farming Processing Manufacturing Distribution spending on 11% 12% 14% 16% 12% 11% 4% dairy as % of total F&B* Activity • Procurement of • Milk gets • Preparation of • Logistics Source: Euromonitor International analysis from Passport China Russia Brazil Iran Ghana feed for cows treated with various milk- • B2B Sales Key Growth India Germany Argentina Egypt South Africa Australia Canada Japan Turkey Mexico Algeria Kenya • Milk is collected heat to extend based products • B2C Sales Markets New Zealand US (2011-2016) Pakistan Ukraine Venezuela Saudi Arabia Nigeria from dairy cows its usable life • Packaging Indonesia Poland Chile Sudan Angola

Powder milk Milk Milk Cheese Cheese Cheese Cheese (26%) (34%) (32%) (37%) (33%) (27%) (36%) Stakeholder • Farmers • Processing • Food companies • Wholesalers Condensed INDUSTRIES OF F&B COMPOSITION Key Sub- Drinking yoghurt Flavoured milk Butter Milk Milk Butter plants • Traders milk (17%) (8%) (6%) (22%) (19%) (5%) • Retailers categories** (10%) Plain yoghurt Cheese Cream Powder milk Plain yoghurt Cream • HORECA Milk (5%) (25%) (5%) (7%) (8%) (5%) (19%) • Institutions

Supermarkets/ Supermarkets/ Supermarkets/ Supermarkets/ Traditional

Supermarkets/ Supermarkets/ hypermarkets Source: Euromonitor International analysis from Passport hypermarkets hypermarkets hypermarkets grocery retailers hypermarkets hypermarkets (46%) Outputs • Unprocessed • Processed • UHT milk, yoghurt, • Packaged and Key (44%) (72%) (53%) (49%) (61%) (80%) Traditional milk milk cheese and unpackaged Channels*** Traditional Traditional Traditional Supermarkets/ related to Discounters Discounters grocery grocery retailers grocery retailers grocery retailers hypermarkets other products dairy products (16%) (4%) retailers industry (38%) (10%) (38%) (38%) (37%)

Internet retailing Fastest Internet retailing (47%) Internet Internet retailing Internet retailing Internet retailing Internet retailing (21%) retailing growing (48%) (33%) (11%) Convenience (11%) channels Supermarkets / stores & (59%) Discounters Discounters Discounters Discounters Dairy supply chains are required to be (CAGR hypermarkets forecourt Discounters (11%) (16%) (2%) (3%) highly robust, because margins are tight 2011-16) (11%) retailers (14%) (10%) and delivery windows are small. Due to the short shelf life of many dairy products, Slowest Others (2.4%) Others growth errors in delivery planning or fulfilment Traditional Traditional (8.6%) Traditional Traditional channels Convenience Others can wipe out all profit. grocery retailers grocery retailers grocery retailers grocery retailers (CAGR stores & Traditional (6.6%) forecourt (0%) (0%) grocery retailers (8.3%) (-2%) 2011-16) retailers (9.1%) The supply of good quality feed is critical (6%) for dairy production, especially in drought prone areas of Sub-Saharan Africa. Note: *Consumer spending on dairy also includes spending on eggs Similarly, dairy production costs shot ** Market share of overall dairy market in 2016 *** Market channel share of overall dairy market in 2016 up for the Almarai Group, one of largest companies in key Middle East and North Africa markets, after the Saudi Arabian government made an announcement in 2016 that it would conserve water resources by greatly reducing its domestic production of alfalfa, which is an important feed for dairy cattle.

Leading global dairy suppliers are making use of technology in all stages of the supply chain to combat these industry challenges. Traceability, fast order turnaround and visibility of all aspects of the supply chain are giving dairy producers the required competitive edge to effectively reach out to their customers.

61 DAIRY

Market Size and Potential Dairy consumption in Western Europe is mature in comparison to other regions of the world, with high per capita consumption. Germany and the Nordic countries are expected to drive growth in the region, especially within cheese and drinking milk products, whilst Italy is expected to record the largest absolute decline, as local consumers are decreasing their lactose consumption. Private label is a major feature of the dairy market in Western Europe, reaching as much as 40% of total retail sales in countries such as Switzerland and the UK. Growth in dairy primarily driven by Asia Pacific and Middle East and Africa

The global dairy market size stood at an estimated US$449.4 billion in 2016 having grown by a CAGR of 1.9% over 2011 - 2016. It is forecast to reach US$458.6 in 2017. Exhibit 20 Dairy regional value sales by product type in 2016, 2021

Exhibit 19 Dairy value sales in 2016, 2021 & CAGR 2016-2021, US$ billion Asia Pacific 2016 2021

Australasia 2016 2021

Europe 2016 2021 153.2bn 79.6bn Europe Latin America 2016 2021 1.7% 0.6%

73.3bn INDUSTRIES OF F&B COMPOSITION 148.9bn Middle East and North Africa 2016 2021 North 144.3bn America North America 2016 2021 40.2bn 4.2% Asia Pacific

4.6% 117.6bn Sub-Saharan Africa 2016 2021 32bn 9.9bn 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Sub Saharan 3.4% Middle East Africa & North Africa 66.8bn 8.5bn

10.3bn Latin America 2.5% Butter and Magarine Cheese Drinking Milk Products Yoghurt and Sour Milk Products Other Dairy Australasia 59.0bn 1.1% 9.8bn

Source: Euromonitor International analysis from Passport

Europe’s stagnant dairy market kind of cheese. According to to gain more share in both retail growth applies to all dairy KEY : Inner circle indicates dairy value sales in 2016, outer circle indicates dairy value sales in 2021 the US Dairy Exporters Council, and food service as they are categories. Stagnant population The distance between the inner and outer circles indicates the size of absolute growth processed cheese is the region’s perceived as healthier options growth and dairy market’s largest exported dairy food, compared to other soft drinks. Colour of the circles indicate the growth rate Fast Moderate Slow Static parallel growth show that dairy creating a high demand for Source: Euromonitor International analysis from Passport consumption per capita is going Slowest growth is expected the hard and semi-hard cheese to remain stable in the market. for butter and margarine in varieties used to make it. That’s each region. For instance, Cheese is the biggest value a key demand that US dairy aims China, according to the leading category in Europe. One of the to satisfy. Chinese player, Inner Mongolia Dairy consumption remains significant in terms as Almarai Group. In markets such as South Africa, leading global dairy player from Yoghurt and sour milk products Yili, witnessed a rapid growth of value sales in Asia Pacific and Western Europe, growth was influenced by soy milk on the back of the US attributes the success of are expected to grow fastest in yoghurt: “The annual sales with estimated market shares of 25.9% and 25.0% rising consumer awareness of lactose intolerance. cheese in Europe to the way it is in each region by 2021. growth rate is at 20%-25%. In respectively of global dairy sales in 2016 and consumed: “The Swiss market, Australasia remains small in terms of dairy products Yoghurt’s health benefits are other countries like the US, UK these shares are expected to remain unchanged the French market – they are consumption. However, the region is a major exporter being recognised among more and Japan, the rate is commonly in 2017. China, Japan and India have the most both mature in how they look at of dairy products. According to one of the leading consumers. Positive attributes below 10%. Another popular significant dairy consumption within Asia Pacific cheese. Cheese is an occasion, Australian dairy manufacturers, 70% of the Australia’s of yoghurt, such as being product is probiotic beverages, due to strong demand for fresh milk. This demand not a product. We can learn total production is exported to Asia Pacific, 10% to recommended by nutrition due to health concerns, as yogurt is partly driven by consumers’ pursuit of fresh and from this and create those the Middle East and 4% to African regions thanks consultants to alkalise the and probiotic beverages help to nutritious drinking milk products as well as the opportunities in the US market.” to high quality and traceability of the products. body and help with weight achieve gastrointestinal health.” development of the cold chain logistics system. Eastern Europe and Latin America remain low growth In the Middle East and North management, promotes growth The health and wellness trend, Growth in the Middle East and Africa is due to the markets, moderated by the economic slowdown Africa region, labneh and cream of the product. On the other which has resulted in a shift expanding population, frequent new product launches in core markets such as Russia and Brazil. cheese are popular among local hand, sour milk products which towards unsaturated oil types, is (especially in flavoured milk), retail development and consumers while the expat are known as ayran, laban, lassi in expected to hinder the growth of effective marketing initiatives by key players such population prefers different different countries, are expected butter and margarine category.

63 Market Trends and Drivers Distribution Landscape DAIRY

Natural, healthy and functional beverages continue to expand Advanced logistics benefit modern Perceptions of snacking have shifted as consumers have now started including healthier food to their daily routine. Traditional snack substitutes grocery retailers in such as milk alternatives, sour milk products and flavoured milk drinks are dairy distribution preferred for refreshments and light meals. Modern grocery retailers, especially supermarkets and hypermarkets, constitute the leading dairy distribution channel Manufacturers SEVENx technology to steer breakthrough globally, with an estimated focused on revolution 68.5% share of retail sales in 2016. Supermarkets continue to be the

innovation for INDUSTRIES OF F&B COMPOSITION The latest technology, known as the SEVENx process, allows excess most important retail channel for Exhibit 21 millennials and water to be removed from fresh milk to make it super-concentrated so dairy sales globally, but they have Global dairy value sales split by retail channels, 2011-2016 weight watchers that it does not require refrigeration for up to six months. Additional been losing share to other retail advantages include reduction in milk volume by 14%, easy transportation formats, especially in Western - 100 200 300 400 500 Product innovations (utilises 84% less packaging material), and lactose-free constituents Europe, where there is strong highlighting health benefits to cater to the ever-increasing lactose-intolerant population. competition from discounters 2011 have been on the rise. One and internet retailing. Many big such innovation was the retailing multi-format chains, introduction of organic milk such as Tesco in the UK and 2012 produced by sustainable Auchan in France, are investing means and eco-friendly raw Portion control more heavily in diversifying 2013 materials. Example brands are: drives growth their logistics in order to supply Organic Valley Grassmilk, by in single-serve consumers through internet Source: Euromonitor International analysis from Passport Friesland Campina produced retailing and maintain their 2014 solely from grass-fed cows, pack sizes overall share of the market. which contains added proteins suitable for health conscious With more people around Traditional grocery retailers or 2015 consumers. Innovation in this the world valuing portion traditional kirana stores continue control as part of their dietary to represent a key channel for area is evolving rapidly with 2016 an emphasis on probiotics awareness, package size has dairy distribution in most of Asia and how they can help with emerged as an important Pacific, but there is a general weight management, improve consideration. These region-wide shift towards consumers are looking for supermarkets. Outlet expansion Convenient Stores and wellbeing, and reduce the Discounters Forecourt Retailers incidence of heart disease and smaller, “grab and go” pack is a common phenomenon other degenerative illnesses. sizes for easier handling as across the region, and consumers Supermarkets/Hypermarkets Internet Retailing well as to encourage smaller perceive modern grocery consumption quantities of retailers as more effective in Traditional Grocery Retailers Other Dairy categories such as smoothies, maintaining product freshness. yoghurts and custards. In addition, supermarkets tend Rising preference for transparent labelling Single-serve pack size allow to offer more product discounts consumers to stock up on and promotions, especially for The internet is also seen as an important channel in order to collect Growing health consciousness, combined with the wealth of information their favourite snacks and multipack products and bulk consumer data. For example, according to Inner Mongolia Yili Dairy, big data, available to today’s consumers, has created a strong desire for openness products and use them on purchases, than traditional which they are using, is crucial to understanding consumers and the online and transparency. Consumers are closely examining nutrition labels and the go. Single-serve food grocers. Hence, supermarkets channel is one of the best enablers of data collection due to the increasing factoring them into their purchase decisions, often favouring clean-label products provide the health represent an important pillar in volume of online transactions. foods and beverages made with natural and organic ingredients. In April and wellness many are looking supporting the growth of chilled 2016, Nestlé Dreyer’s Ice Cream announced improvements to six iconic for with the added benefit of dairy products like yoghurt, With the exception of Brazil and Chile, where modern grocery retailers ice cream brands as part of a multi-year initiative to update and simplify convenience as portion and cheese and drinking milk. Internet account for 70% of dairy sales, traditional grocery retailers remain extremely ingredient profiles. Artificial colours and flavours, high fructose corn syrup, calorie control per serving is retailing is gaining ground with important in the distribution of dairy products in Latin America, which is and GMO ingredients have been eliminated, and the milk comes from cows much easier to calculate. the increasing popularity of home one of the most significant growth categories in the region. Discounters are that have not been treated with growth hormones. delivery services. gaining ground, particularly in Mexico.

65 Challenges and Opportunities DAIRY

Evolving technologies offer growth opportunities, management is the key challenge

Challenges Opportunities

Negative publicity about Emerging technologies that Entering new markets, Smooth integration packaged dairy products help eliminate wastage across where consumption of of technology in drives loose milk the supply chain by providing products like cheese, traditional or consumption in countries quantifiable information to probiotic drinks,

existing farming or INDUSTRIES OF F&B COMPOSITION where loose milk is continuously measure, react yoghurt, ayran is low, manufacturing processes available in the market and monitor farm operations. via targeted marketing

Growing pressure to Adopting sustainable farming Government and industry develop sustainable Increasing demand technologies which are collaboration to encourage strategies and set for plant-based dairy more efficient in land and dairy product consumption, targets for waste alternatives, such as water use; less generation of mainly drinking milk and greenhouse soy milk in China greenhouse gas emissions products among kids emissions reduction.

Volatile raw milk Strategic deals with Fixed price contracts for prices and long-term major companies to enter Powder milk production by specified time periods agreements to hedge markets with complex government for trading support farmers in prices cause waste in distribution models and mitigating price volatility. the supply chain low cultural proximity

Increasing importance Larger pack sizes to Supply chain disruption of food safety and Value-added products, penetrate further to risk in underdeveloped limited introduction of such as flavoured and consumer food service countries, which new technologies, such fortified with vitamins, in which is growing increases raw milk waste as blockchain across developing markets across all regions emerging regions

Convenient pack sizes Growing consumer Retail waste due to and pack types serving High cost of ‘clean’, awareness surrounding consumer selection demand from growing ‘natural’ and ‘free from’ protein intake for hunger of products further number of single ‘organic’ products control, training and from expiry date person households and weight management. on-the-go consumers

Supplier/farmer Manufacturer Wholesale/import-export Retailer KEY Moons indicate the level of direct impact on each industry. The fuller the moon, the higher the direct impact Low High

Source: Euromonitor International analysis from Passport, trade interviews and desk research Source: Euromonitor International analysis from Passport, trade interviews and desk research Note: Level of impact mentioned is extrapolated by Euromonitor International based on its market understanding. Note: Level of impact mentioned is extrapolated by Euromonitor International based on its market understanding.

67 Case Study: Chobani DAIRY

Successful marketing of Greek yoghurt led to the meteoric rise of Chobani

Name of company Chobani

Coverage Based out of the US, the company supplies its popular Greek yoghurt worldwide.

Why Chobani did it? Identified the selling potential for Greek yoghurt in line with the health and wellness trend. COMPOSITION OF F&B INDUSTRIES OF F&B COMPOSITION

Key characteristics of growth Redefined Greek yoghurt positioning from a niche/gourmet product to a mainstream one.

How was the growth achieved? 1. Convincing retailers to position Greek yoghurt alongside other yoghurt brands in the dairy aisles.

2. Tailored marketing campaign involving high usage of social media. Part of the marketing campaigns included excellent content marketing in the form of recipes highlighting the use of Chobani Greek Yoghurt in various recipes.

3. Innovative distribution via CHOmobile, a mobile food truck showcasing different types of Greek Yoghurt and how it can be part of everyday foods.

4. Penetrating non-retail channels; in November 2016, the company opened a new Chobani Café inside a new Target store in New York and in February 2017, opened its third café inside a new Walmart Supercenter in Texas which is the its first outside New York City

Outcome Chobani grew into a US$1 billion enterprise within five years of introducing their brand of Greek yoghurt in the US.

In 2016, it surpassed General Mills’ Yoplait brand, one of the mainstream yoghurt brands, to become the biggest yoghurt brand in the US.

Source: Euromonitor International analysis from Passport, trade interviews and desk research

69 Pulses, Grains & Cereals PULSES, GRAINS & CEREALS PULSES, GRAINS

Pulses, Grains & Cereals – At a Glance

Middle North Sub-Saharan Asia Pacific Australasia Europe Latin America East & North America Africa Africa

Consumer spending on edible 17.4% 15.4% 17.6% 21.4% 12.7% 17.1% 46.7% oils as % of total F&B

Pakistan Georgia Argentina Oman Ghana Key Growth Bhutan Moldova Venezuela Algeria Gambia New Zealand Canada Sri Lanka Cyprus Guatemala UAE Sudan Markets Australia US (2011-2016) Maldives Serbia Ecuador Egypt Niger Nepal Montenegro Chile Lebanon Senegal COMPOSITION OF F&B INDUSTRIES OF F&B COMPOSITION

Dry pulses Breakfast Rice, pasta Breakfast Rice, pasta Dry pulses Rice, pasta (54%) cereals & noodles cereals & noodles (52%) & noodles Key Sub- Rice, pasta, (47%) (56%) (51%) (54%) Rice, pasta, (68%) categories* noodles Rice, pasta Breakfast Rice, pasta Dry pulses noodles Dry pulses (45%) & noodles cereals and noodles (36%) (45%) (21%) (37%) (26%) (39%)

Super/hyper Super/hyper Traditional markets markets grocery retailers Super/hyper Super/hyper Super/hyper Super/hyper (86%) (67%) (55%) markets markets markets markets (73%) (44%) Convenience Convenience (53%) (49%) Super/hyper stores & stores & markets Others Key Traditional Traditional Traditional forecourt forecourt (40%) (14%) Source: Euromonitor International analysis from Passport grocery retailers grocery retailers grocery retailers channels** retailers retailers (34%) (39%) (42%) Convenience Traditional (6%) (13%) stores & grocery Internet retailing Discounters Discounters Traditional Traditional forecourt retailers (7%) (5%) (5%) grocery retailers grocery retailers retailers (7%) (6%) (10%) (4%)

Internet Internet Internet Internet Internet Internet Internet Fastest retailing retailing retailing retailing retailing retailing retailing growth (10%) (64%) channels (28%) (22%) (23%) (17%) (106%) Convenience/ Super/hyper (CAGR Discounters Discounters Discounters Discounters Discounters forecourts markets 2011-16) (20%) (16%) (12%) (2%) (20%) (4%) (12%)

Super/hyper Traditional Convenience Traditional Traditional Others markets grocery stores & Super/hyper Slowest grocery grocery (-2%) (2%) retailers forecourt markets growth retailers retailers (1%) retailers (-1%) channels Super/hyper Traditional (9%) (15%) (CAGR markets grocery Super/hyper (3%) Others Others Others 2011-16) (4%) retailers markets Others (1%) (11%) (15%) (3%) (3%) (7%)

Notes: * Market share of overall edible oils market in 2016 ** Market channel share of overall edible oils market in 2016, excludes dry pulses

Pulses, Grains & Cereals

71 From Farmers to Consumers PULSES, GRAINS & CEREALS PULSES, GRAINS

“Whole grain consumption has been linked to significant reductions in the risk of heart disease, Type 2

diabetes, digestive INDUSTRIES OF F&B COMPOSITION Cereals Rice cancers and stroke.” The supply chains for the two major types of cereals Rice supply chain still deeply fragmented used for products in this sector, rice and wheat, The rice supply chain remains led by small-scale vary significantly. The supply chain for rice is highly farmers in Asia, mainly India, China, Thailand and fragmented and dominated by small scale farmers, Vietnam, often with little access to modern agricultural while wheat is a globally grown product with a more methods, although investments by governments and modernised supply chain. charities are helping to improve their yields.

Process Farming Processing Manufacturing Distribution There is little real consolidation from farmers and/or mills and There is also some private or vertical integration in the distributing to lower-income sector investment in rice supply, rice supply chain: it is heavily consumers. Some also control although this is limited. Mars, Activity • Tending crop • Drying • Preparation of • Logistics fragmented and traditional. imports and exports. Bodies such which sells rice through the • May also carry • Seperate husk various milk- • B2B Sales as the International Rice Research Uncle Bens and Seeds of Change The small scale nature of much out drying from grain based products • B2C Sales Institute (IRRI) work to help brands, is working with suppliers of the world’s rice farming • Seperate whole • Packaging farmers improve their crop and to grow sustainable rice with the from broken means that it is typically an as such, improve food security. aim of certification via the SRP by inefficient supply chain, with For example, the IRRI, together 2020 – all basmati rice is already significant losses due to manual with the UN, established the sourced from SRP farmers. The Stakeholder • Farmers • Millers • Manufacturers • Wholesalers farming methods, poor water

• Traders Source: Euromonitor International analysis from Passport Sustainable Rice Platform (SRP) programme involves introducing access, lack of use of fertilisers, • Retailers to develop the gold standard for new technologies to improve inadequate storage, poor roads • HORCEA rice production practises, which sustainability and also improve and a weak transportation • Institutions helps to improve yields, incomes yield: the pilot, which was carried and logistics network. As rice and sustainability. Government out in Pakistan and India, was is a staple product, this not assistance packages are in place reported to deliver a 17% increase Outputs • Rough rice • Whole grains • Dried rice • Dried rice only affects packaged food in some countries to support in yield, and a 72% increase in related to • May also supply sold for export, • Cooked rice • Chilled rice manufacturers but is also a global dried rice broken sold • Rice based • Rice based farmers to expand plantings net income for the farmers. The food security issue. As such, in industry locally foods such as breadkfast and improve efficiencies, programme is now being rolled much of Asia, rice markets are breadkfast cereals cereals particularly in West Africa. out in Cambodia, Thailand and subject to state involvement Sub-Saharan Africa is also a Vietnam. The company is also as well as private business. target for private investment, looking to set up programmes to • NA • Rice husks • NA • Other Agencies such as BULOG in Other with Lagos-based Denote tackle other supply chain issues, (used for fuels) Indonesia, NFA in the Philippines, outputs investing in rice cultivation by such as water stress in Spain • Rice bran VINAFOOD in Vietnam and the • Brewer’s rice small- and mid-size farmers in and farmer incomes in Asia. Food Corporation of India are Nigeria, including the provision all involved in purchasing rice of equipment and training.

73 Wheat Wheat is a global commodity with a complex supply chain and a large range of outputs Market Size and Potential The wheat supply chain is complex and global in nature, with a huge number of end products and by products and a large number of stakeholders. Gaining control of this cumbersome supply chain is a key aim of many major food processors. PULSES, GRAINS & CEREALS PULSES, GRAINS

Sub-Saharan Africa and the Middle East and North Africa regions drive Process Farming Processing Manufacturing Distribution growth in cereals

By far the fastest growth in cereals stems from Africa, led by Sub-Saharan Africa, but with the Middle East and North Africa also growing strongly. Total global market value of pulses, grains and cereals reached US$279.7 billion in 2016 Activity • Plantation • Elevators • Further • Logistics and is forecast to reach US$286.4 billion in 2017. In both cases, this is from a small base, led by consumers in lower- • Growing weighing, cleaning processing • B2B Sales income areas of these regions trading up to packaged versions of staple cereals. • Initial Drying & grading • Packaging • B2C Sales • Millers: milling • Branding Exhibit 22 Pulses, grains and cereals value sales in 2016, 2021 & CAGR 2016-2021, US$ billion

• Elevators Source: Euromonitor International analysis from Passport Stakeholder • Farmers • Millers • Manufacturers • Wholesalers • Traders • Retailers • HORCEA • Institutions 23.9bn INDUSTRIES OF F&B COMPOSITION 31.5bn Europe • Flour/semolina 0.7% 23bn 1.1% Outputs • Wheat grain • Wheat bran • Bread/baked • Bread/baked 29.9bn related to • Wheat germ goods goods 198.9bn • Wheat germ oil • Pasta • Pasta North America industry • Breakfast cereals • Breakfast cereals 25.2bn 3% Asia Pacific • Rice husks (used 4.2% 171.9bn • NA for fuels) • Vodka/beer • Other Other 20.5bn outputs • Rice bran 9bn • Brewer’s rice Sub Saharan 4.6% Middle East Africa & North Africa 27.8bn 7.1bn

2.5bn Latin America 2.3% Australasia The wheat supply chain is much tighter links with their suppliers consumer demand for sustainable 24.9bn 1% more industrialised, with wheat and dictating stronger terms. production. Through its “Good 2.4bn grown in countries across the For You, Good For The Planet” In Australia, Grain Corp, a food world including the US, Canada, programme it guarantees processing agribusiness, is France and Australia: wheat sustainable production, with looking to tap into the market is the second most grown 70% of the wheat purchased for premium products by cereal globally after maize. coming from local suppliers to creating tighter links through KEY : Inner circle indicates value sales in 2016, outer circle indicates value sales in 2021 the end consumer market. As with other agricultural its supply chain so that it can The distance between the inner and outer circles indicates the size of absolute growth crops, wheat is vulnerable to offer traceability about where Government intervention in Colour of the circles indicate the growth rate Fast Moderate Slow Static weather conditions and losses the grain was produced, what wheat farming and trading is Source: Euromonitor International analysis from Passport during storage and transport, variety it is and what inputs common due to its important role all of which contribute to price were used in production. The in the economy of many countries volatility. While the organisation company’s ultimate aim is to and due to its position as a of the supply chain varies vastly allow a consumer to scan a tradable commodity. In Manitoba, In most developed markets, sales of cereals are at Alongside North America, growth is also sluggish across the world, from small-scale product’s QR code and gain Canada, government investment saturation point, with little room left for growth. in the more developed Western European farming and fragmentation to information on where the grain of C$1.6 million was earmarked North America, following a decline over the review markets: here maturity combines with trends large-scale farms and vertically was produced and who by. for grain crops, including wheat period, is expected to be stable to 2021. Diversifying away from carbohydrate-based meals to integrated corporations, the This requires closer links with and barley, in 2016. This was used diets and moves away from carbohydrate-heavy create a difficult operating environment. Value shift is gradually towards more suppliers, with concepts such as in a variety of ways, including foods mean these are difficult markets to navigate. growth is supported by rising unit prices. integration as larger companies contracted acreage suggested. research into specific types of Growth prospects come instead in cereals that offer The fastest growth is visible where there is still room seek to gain better control over wheat blight, developing better newness and/or healthy options (Asian-style noodle Barilla, the world’s leading to grow in consumption levels of packaged staples their supply chain. However fertiliser management strategies dishes, quinoa-based pasta) or offer added-value manufacturer of pasta (and and where breakfast cereals are at an earlier stage of this is not typically illustrated for high yielding spring wheat convenience (microwaveable rice, chilled pasta producer of many other baked development, with a healthier image – this is focused by food processors acquiring and environmental strategies. and noodle dishes). Breakfast cereals face similar goods) also revised its supply on Sub-Saharan Africa but also includes areas in suppliers, but instead by creating prospects, with a reputation for being unhealthy and chain in order to tap into North Africa, parts of Asia, and Central America. due to competition from other convenient options, such as breakfast bars. However, health positioned options such as granolas and mueslis are faring better.

75 Dynamic growth in Sub-Saharan Africa is the result boosting sales of Asian staples of rice and noodles. of consumers trading up to packaged products. In Asia Pacific is set to see a healthy CAGR of 2.7% to “Right now, Saudi Arabia is one of the biggest Nigeria, for example, sales of instant noodles are 2021, resulting from trading up in less-developed consumers of pasta in the world, on a per capita basis.

rocketing as they are low priced (in a period of markets. India for example is seeing rapid growth in & CEREALS PULSES, GRAINS relatively high pricing on imported rice), easil available rice as urban consumers shift to branded varieties, But why would Saudis be eating a lot of pasta? It came and convenient to prepare, and are particularly which are viewed as better quality than the bulk popular among urban families with young children. purchased rice popular in rural and semi-rural areas. as a food from Europe and quickly became a habit. Pasta and noodles are also enjoying growth among Middle East and North Africa is also set to see fast young consumers. Breakfast cereals, although a minor General Mills growth; with breakfast cereals still niche, this is led element in this market, are also showing fast growth by growing interest in international foods, with the due to being seen as quick, easy and nutritious. large number of expats in markets such as UAE also COMPOSITION OF F&B INDUSTRIES OF F&B COMPOSITION

Exhibit 23 Cereals, pulses and grains value share per region, 2016 & 2021

Asia Pacific 2016 2021

Australasia 2016 2021 The Asia Pacific region is strongly In Europe, both breakfast cereals notable in parts of the Middle dominated by rice, pasta and and rice, pasta and noodles East, particularly UAE, due to noodles: rice and noodles are struggle to show growth due to the large expat populations from staple foods in this region, health concerns surrounding both Asian markets where rice is a Europe 2016 2021 consumed by the vast majority categories, but breakfast cereals staple. Source: Euromonitor International analysis from Passport Source: Euromonitor International analysis from Passport of people, while breakfast cereals is expected to gain some share, are a relatively new introduction. thanks to good growth in some In North America, as in However, breakfast cereals is set Eastern European markets where Australasia, breakfast cereals Latin America 2016 to increase its share slightly, due they are not yet entrenched and dominate, but are losing share to rising demand for convenience where they – particularly muesli, due to the negative perceptions and a perception of breakfast granola and hot cereals – are seen of these products around health, cereals as being nutritious, as a healthy, convenient option. particularly for children’s cereals. Middle East and North Africa 2016 2021 especially among younger Adult products are also struggling consumers keen to embrace In Latin America too, it is due to heavy competition Western-style foods. breakfast cereals that will from products offering greater gain share over rice, pasta convenience and health benefits, North America 2016 2021 Australasia is one of the few and noodles, again led by a such as breakfast bars and markets where breakfast cereals positioning that embraces drinking yoghurts. takes a larger share of the total health and convenience, even than rice, pasta and noodles: in children’s cereals in some Sub-Saharan Africa is also dominated by the basic products Sub-Saharan Africa 2016 2021 however, it is losing share to markets. In Mexico, the focus is on the latter as consumers move highlighting vitamin content. of rice, pasta and noodles: away from children’s cereals in breakfast cereals are not yet well The Middle East and North Africa entrenched and are set to lose 0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100% particular due to their reputation as having a high sugar content. is almost entirely dominated by share slightly to rice, pasta and While mueslis and granolas rice, pasta and noodles, with noodles by 2021, as consumers continue to post positive growth, breakfast cereals remaining a trade up to branded versions of this is overshadowed by growth niche area. Growth in rice is their standard foods. Breakfast Cereals Rice, Pasta and Noodles Dry Pulses in instant noodles and convenient prepared meals.

77 Market Trends and Drivers Distribution Landscape PULSES, GRAINS & CEREALS PULSES, GRAINS Wholegrain consumption set to rise Exposure to Quick fixes: the rise Supermarkets and hypermarkets international of fast cook options dominate global distribution Whole grain consumption has been linked to significant reductions in the risk of eating habits heart disease, Type 2 diabetes, digestive cancers and stroke and in developed Fast alternatives to traditional staples Globally, the leading sales channel for cereals, rice and pasta is supermarkets/ markets there is a high level of acceptance of wholegrain in bakery and processed leads to greater have seen a strong performance hypermarkets, with a share of 52% in 2016, followed by traditional grocery foods. In addition, the range and awareness of wholegrains is as products are diversification globally. Microwaveable rice has been retailers with a share of 29%. Supermarkets/hypermarkets lead due to their marketed including ancient grains such as kamut, farro, spelt, triticale, rye, oats. a star performer in many developed price competitiveness on basic staples and range of items from value-added Gluten-free options now include corn, rice, millet, sorghum, amaranth, quinoa, In many countries, markets, with Ebro Food’s Minute convenience cereals to bulk-packaged staples. teff and buckwheat are also increasingly available and appeal to consumers consumers are diversifying Rice in the US and Mars Food UK looking to avoid gluten and improve their digestive health. Wholegrains fit their diet away from in Europe both having to increase well within the overall trend towards the consumption of healthier foods. traditional staples as production capacity to meet demand. Exhibit 24 incomes rise and exposure Chilled pasta has shown positive to alternative staples growth across most developed Global pulses, grains and cereals value sales split by retail increases. This boosts markets. Fast cooking dried pasta channels, 2011-2016

sales of products such as has proved a hit for many leading 50 100 150 200 US$ BN Fear of carbs: gluten - INDUSTRIES OF F&B COMPOSITION rice, pasta and noodles in companies, including Nisshin Seifun, free and wheat non-traditional markets which added a quick-cook version 2011 alternatives but in some cases also to its portfolio. Innovation has also reduces sales of staples been marked in instant noodle cups: 2012 In developed markets, particularly in traditional markets. In in the US this has focused on cleaner the US, cereals, rice and grains Japan, for example, sales of labels with less sodium to improve are suffering from a trend away rice are in steady decline as from carbohydrate-heavy diets their nutritional profile, while in 2013 towards protein-centric diets. This consumers turn to a wider Japan a key innovation is Nisshin Source: Euromonitor International analysis from Passport has created opportunities for new range of carbohydrate Food’s shorter noodles aimed at 2014 staple alternatives, such as gluten- options, such as breads and female consumers who tend to be free pasta, organic pasta, and breakfast cereals. At the concerned about the slurping noises pastas made from alternative grains same time, consumers in associated with standard noodles. 2015 such as spelt, rice and corn. While many developed markets Breakfast cereals have had a Barilla is the global leader in gluten- are embracing new staples free pasta, there are numerous mixed response to trends towards 2016 companies emerging in this niche. and new flavours, with convenience: in developed markets In the US, Quinoa Corp launched Asian-style noodle dishes they have suffered due to the rise Pow! Pasta, a range of protein-rich performing well in North in on-the-move alternatives such pastas made from beans, lentils American and Western Convenient Stores and as breakfast bars, but in some Discounters Forecourt Retailers and quinoa in 2016, which are now Europe. Diversification in developing markets they have stocked by Walmart despite a types of products is also benefited from being quicker to Supermarkets/Hypermarkets Internet Retailing Staple foods relatively high unit price. In the UK, evident, with consumers in Napolina launched its vegetable- prepare than traditional breakfast fare. development led Traditional Grocery Retailers Other Dairy based green pea fusilli and red Europe and North America by economic trends lentil penne in 2017. Clean eating buying a wider range of has also impacted breakfast cereals, types of rice in line with Note: Retail split excludes dry pulses Rice, pasta and noodles are, with consumers in developed the broader range of in many countries, basic markets moving away from international dishes cooked. staple foods purchased by carb- and sugar-heavy breakfast Supermarkets take strongest Internet sales rank third and reduce the incidence most households. As such, cereals as well as diet cereals of heart disease and other lead in developed markets in Asia Pacific trends tend to echo economic in favour of homemade natural degenerative illnesses. performance: when incomes options, such as overnight oats. Supermarkets/hypermarkets lead in all regions Over the review period, sales of cereals via the internet rise, consumers trade up to except Sub-Saharan Africa, where they are second have increased from 2% in 2011 to 4% in 2016. They better quality staples – in to traditional grocery retailers. Their strongest rank as the third most important channel in Asia low-income households, this positions are in Australasia, North America and Pacific with a share of 7%, with China particularly means trading up to packaged Sustainability – consumers care about provenance Europe. Networks here are very well developed advanced in this area through Alibaba’s Tmall and and branded varieties; in and grocery chains compete strongly on price and JD.com as well as bricks and mortar stores that high-income households, Consumer concern about the ethics and quality of raw ingredients has range. Strong private label collections also underpin also offer online shopping, such as Walmart and to added-value varieties, fed through to the cereals market, with companies such as Barilla placing this dominance, ranging from basic value ranges for Carrefour. This is driven by convenience and price such as organic or fortified increased emphasis on sustainable and local sourcing, with its premium bulk essentials, to premium chilled noodle and pasta optimisation of delivery for bulk staples compared versions. As such, economic Voiello brand sourced entirely from Italian Aureo wheat. In 2017, pasta dishes at competitive prices. In Australia, for example, to carrying home smaller packs from local shops, performance largely dictates manufacturer Panzani SAS moved to using only free-range eggs due to Coles supermarket is posing tough competition as well as increasing smartphone penetration. the trends in staple foods. increased consumer awareness about sustainable consumption. to branded premium rice with its premium private label options, such as Microwave Brown Rice & Quinoa and Microwave Brown Rice & Chia Seeds.

79 Challenges and Opportunities PULSES, GRAINS & CEREALS PULSES, GRAINS

Key opportunities lie in navigating consumer demand for lower carb, convenient and sustainable foods

Challenges Opportunities COMPOSITION OF F&B INDUSTRIES OF F&B COMPOSITION

High cost of Crop vulnerability to Price volatility due to Competitive Private and public sector Multi-lingual labelling agricultural weather conditions and climate conditions and advantage through initiatives to help farmers of health and wellness modernisation increasing resistance of dependence on high sustainable and ethical with modernisation and proposition in and expansion pests impacting crops number of small farms farming methods yield improvement multinational countries

Some shift away from Saturated mature market Health trends away from Emerging and new Developing markets Sales propositions such as Emerging demand for wheat-based products for basic rice, pasta, noodles carbohydrate-heavy diets alternative grains and where consumers are quick cook, ready prepared breakfast cereals in in developed markets and breakfast cereals in saw reduced consumption of crops, such as quinoa shifting from loose rice and other convenience developing markets due to due to health concerns developed markets many starchy foods, including and amaranth to branded/packaged foods; exotic flavours and changing lifestyles due to pasta and breakfast cereals varieties health-positioned options urbanisation and middle- in developed markets income class growth

Increasing private Price pressure on Price pressure on traditional Growth in alternative starches and Sustainable products Increased international trade label penetration small manufacturers grocery retailers from protein-centric ‘carbs’, including with credible transparent as consumers move beyond which offers high from large-scale supermarkets/hypermarkets lentil or quinoa-based pastas provenance through traditional local grains and seek quality and low prices manufacturers and discounters and rice, and oat-based cereals labelling or QR codes out more exotic products

Supplier/farmer Manufacturer Wholesale/import-export Retailer KEY Moons indicate the level of direct impact on each industry. The fuller the moon, the higher the direct impact Low High

Source: Euromonitor International analysis from Passport, trade interviews and desk research Source: Euromonitor International analysis from Passport, trade interviews and desk research Note: Level of impact mentioned is extrapolated by Euromonitor International based on its market understanding. Note: Level of impact mentioned is extrapolated by Euromonitor International based on its market understanding.

81 Case Study: Barilla Alimetare

Barilla tackles modern eating habits

Name of company Barilla Alimentare SpA

Coverage Based in Italy, with global coverage

Key characteristics of growth Product innovation to tackle changing dietary trends such as demand for gluten free, local sourcing and sustainability

Why Barilla did it? Falling demand for standard pasta in developed markets and rising demand for gluten-free, organic and locally sourced options as well as ethically produced food products

How was it achieved? 1. Introduced a sustainability programme – “Good For You, Good For The Planet”, focused on local sourcing

2. Increased focus on local sourcing of Italian wheat, with premium brand Voiello made with 100% Aureo Italian wheat

3. Global launch of gluten-free pasta and organic pasta supported by reduced fat, high fibre and reduced sugar items under the Mulino Verde brand, the health and wellness answer to the Mulino Bianco range

Outcome In 2016, net sales increased from EUR2.7 billion to EUR3.7 billion.

In the same year, the company’s global share of pasta sales increased from 10% to 10.3%.

It also increased its share of organic pasta from 0.3% in 2015 to 0.8% in 2016, and its share of gluten-free pasta from 9.7% to 10.8%.

Source: Euromonitor International analysis from Passport, trade interviews and desk research

Meat & Poultry

83

COMPOSITION OF F&B INDUSTRIES F&B OF COMPOSITION MEAT & POULTRY & MEAT 85

Source: Euromonitor International analysis from Passport Distribution Retailers HORCEA Institutions NA Logistics B2B Sales B2C Sales Wholesalers Traders and Packaged unpackaged meat • • • • • • • • • • Processing and Processing at treatment plants processing Processing and packaging companies meat Processed and poultry NA Manufacturing   • • • • The meat and poultry supply chain is quite adaptive to evolving evolving to adaptive and poultry supply chain is quite meat The establish to is seeking industry meat demands. The consumer may that techniques and production on traceability reassurance of its and origin in the integrity confidence promote help to identification) of RFID (Radio frequency introduction The products. some of the are identification breed for tags and DNA analysis cuts along the supply chain. meat track used to popular techniques is consumption meat global sources, industry to According is of the growth 70% 2023. 7% by by increase to expected population poultry as rising middle income, from come to expected increased drive pricing and dietary preferences affordable growth, Robotics and countries. specifically in developing consumption regimes feeding improve such as sensors to technology, innovative management, are breed for and identifying diseases, and drones meet the rising to manufacturers used by some of the techniques theas such innovations technological Recent meat. lean for demand in efficiently utilising producers support meat aim to app Bovcontrol quality. meat and improve productivity increase to data farm-level the entire incorporates now transparency total demand for The more label positioning’ becomes supply chain, as a ‘clean improve to in projects investing are Manufacturers holistic. carcass objective including automation, productivity, processing management and environmental health and safety, measurement, and sustainable. globally competitive their business keep to Antemortem Antemortem inspections abattoir at Butcheries Offal Hides Skin Bones Processing Abattoir Prime cuts • • • • • • • • Poultry andPoultry animal rearing specialisedat farms Eggs Fertilizer Biogas Farming  Farmers animals Live • • • • • • Outputs to related industry Process Activity Stakeholder Other outputs Livestock science and technology represents a driver for change for a driver represents and technology science Livestock producers meat to has led This and poultry. of meat varieties healthier for demand is rise in consumer There supply chains. sustainable more create to advancements technological leveraging and processors Consumers to Farmers From

Source: Euromonitor International analysis from Passport 8% Africa Sub-Saharan Sub-Saharan Supermarkets Supermarkets (64%) *** Independent small grocers (8%) Chilled processed meat red (63%) Frozen processed poultry (25%) Internet retailing (22%) Traditional groceries (7.9%) Convenience & stores forecourt retailers (6.4%) Discounters (6.8%) Cote d’Ivoire Cote Ghana Cameroon Senegal South Africa 19% North America Modern grocery Modern grocery retailers (77%) Traditional retailers grocery (15%) Chilled processed meat red (56%) Chilled processed poultry (19%) Internet retailing (8.3%) Discounters (2.8%) Traditional groceries (0.5%) Convenience & stores forecourt retailers (1.5%) Canada US 24% Africa Middle East & North East Supermarkets Supermarkets (35%) Independent small grocers (29%) Frozen Frozen processed meat red (21%) Frozen processed poultry (19%) Internet retailing (43%) Other foods non-grocery specialists (58%) Traditional grocery retailers (9.2%) Convenience & stores forecourt retailers (8.5%) Iran Egypt Turkey Morocco Saudi Arabia Notes: * Market share of overall edible oils market in 2016 edible oils market of overall share * Market Notes: 24% Latin America Latin Modern grocery Modern grocery retailers (65%) Traditional retailers grocery (31%) Chilled processed meat red (67%) Chilled processed poultry (15%) Internet retailing (16.2%) Convenience & stores forecourt retailers (16.2%) Others (10.1%) Argentina Venezuela Mexico Chile Guatemala ** Market channel share of overall edible oils market in 2016, excludes dry pulses excludes 2016, in edible oils market of overall channel share ** Market 22% Europe Supermarkets Supermarkets (34%) Hypermarkets (22%) Discounters (20%) Internet Internet retailing (12%) Convenience & stores forecourt retailers (6.5%) Others (-2.3%) Traditional grocery retailers (-1.2%) Chilled processed meat red (66%) Chilled processed poultry (21%) France Russia Germany Poland Norway 18% Australasia Supermarkets Supermarkets (80%) Discounters (15%) Internet Internet retailing (24%) Discounters (16%) Supermarkets / hypermarkets (0.8%) Convenience & stores forecourt retailers (1%) Chilled processed meat red (69%) Frozen processed poultry (19%) New Zealand New 19% Asia Pacific Internet Internet retailing (14%) Convenience & stores forecourt retailers (6.6%) Traditional grocery retailers (-1%) Others (0.3%) Chilled processed meat red (49%) Shelf stable processed meat red (23%) Supermarkets (43%) Traditional retailers grocery (24%) Japan Indonesia Philippines South Korea Kazakhstan Consumer spending &on meat poultry as % F&B of total Slowest Slowest growth channels (CAGR 2011-16) Fastest growth channels (CAGR 2011-16) Key Sub- Key categories* Key channels** Key Growth Growth Key Markets (2011-2016) Meat & Poultry – At a Glance At – & Poultry Meat Industry & Poultry Meat Market Size and Potential & POULTRY MEAT

Frozen processed meat and poultry has recorded strong growth in the Middle East and North Africa, especially in key growth markets such as Consumer preferences regarding meat tend to vary considerably across Turkey and Saudi Arabia. Increasing ownership of fridge-freezers and deep freezers at home regions supports the growth of these products. There is high demand for frozen chicken burgers and Global meat and poultry market sales stood at an estimated US$145.4 billion in 2016, up by a CAGR of 1.0% over chicken nuggets as young children in particular 2011-2016. Driven by high growth momentum arising out of the Middle East and North Africa region, where demand prefer these options. Young consumers are for halal meat is especially significant to the Muslim majority population, global meat and poultry market sales are increasingly leading busier lifestyles, and with estimated reach US$146.7 billion in 2017 and US$154.7 billion in 2021 at a CAGR of 1.25% over 2016-2021. higher disposable income and less time for meal Exhibit 25 Meat and poultry value sales in 2016, 2021 & CAGR 2016-2021 US$ billion preparation, there is a steady rise in demand for frozen processed meat products. Demand for halal meat is increasing, wherein manufacturers need to adopt clear labelling approaches with respect to animal slaughter and meat preparation practises.

71.5bn

36.2bn INDUSTRIES OF F&B COMPOSITION

Europe 1.5% 0.8%

33.6bn 68.8bn 29.1bn North America 6.6bn 1.3% Asia Pacific Exhibit 26 Meat and poultry regional value sales by product type in 2016, 2021

5.4% 27.2bn 5.1bn Asia Pacific 2016 2021 9bn

Sub Saharan 4.6% Middle East Africa & North Africa 11.6bn 7.1bn Australasia 2016 2021 1.9bn Latin America 2.7% Australasia 10.1bn 0.5% 1.8bn Europe 2016 2021 Source: Euromonitor International analysis from Passport

Latin America 2016 2021

KEY : Inner circle indicates processed meat value sales in 2016, outer circle indicates processed meat value sales in 2021 The distance between the inner and outer circles indicates the size of absolute growth Middle East and North Africa 2016 2021 Colour of the circles indicate the growth rate Fast Moderate Slow Static Source: Euromonitor International analysis from Passport

North America 2016 2021

Meat and poultry consumption remains significant in terms of value sales in Western Europe and North America, with estimated market shares of 38.4% and 22.8% of global sales respectively in 2017. Germany, Italy and France have the most significant intake of meat and poultry, but meat substitutes are rising in consumption, especially in chilled format, Sub-Saharan Africa 2016 2021 due to increased consumer concern regarding animal welfare and environmental sustainability. Meat substitutes have witnessed strong growth in North America, where it has managed to capitalise on consumer demand for clean labels. 90% 92% 94% 96% 98% 100% 90% 92% 94% 96% 98% 100% Globally, chilled processed meat products benefitted directly from stronger consumer demand for a healthy diet and improving cold-chain systems. In Asia Pacific, since most chilled processed meat products are Western-style products and dishes, they are generally positioned as premium products with higher unit prices. Meat preferences vary Processed Meat significantly across markets in the Asia Pacific region, with countries such as Japan and Malaysia favouring chicken- Meat Substitutes based recipes, while in others, such as China, beef appears to be steadily growing in popularity due to heightened regulations relating to bird flu epidemics.

87 Market Trends and Drivers Distribution Landscape & POULTRY MEAT

Growing importance of ‘health’ in high meat Animal welfare and Consumers look for consuming countries sustainability are convenience and active consumer value for money Emerging countries, such as China and India, are expected to contribute concerns heavily to the growth of the global meat and poultry industry due to rising Modern grocery retailers continue incomes and healthy eating trends. Processed meat products in packaged Consumers in some developed to dominate the retail landscape format are considered to be hygienic and of high quality as they are sold by countries, such as Australia, are for meat and poultry, driven by well-established companies, such as the WH Group in China and Godrej Tyson increasingly concerned about convenience, promotions and Foods Ltd in India. In response to growing consumer demand for more fresh animal welfare, as well as the discounts. Rising disposable and healthy processed meat products, these manufacturers have increasingly negative environmental impacts incomes and urbanisation in shifted their focus from shelf-stable processed meat to chilled processed meat. of raising cattle and methane developing countries continued gas emissions. Consumer to drive growth in modern concern over the sustainability distribution channels. of meat consumption and its Processed meat and poultry Manufacturers to face impact on the environment INDUSTRIES OF F&B COMPOSITION has spurred consumer lifestyle are mainly sold through store- steady increase in movements such as the “rise based retailing. Modern grocery demand for halal meat of the flexitarian”, where some retailers, such as supermarkets consumers consciously choose and hypermarkets, continued to Exhibit 27 Demand for halal meat, an to restrict their meat intake dominate the retail landscape important feature of life across with red meat-free days in in meat and poultry, especially Global meat and poultry value sales split by retail channels, Muslim communities, is growing favour of other protein sources. in developed Western Europe, 2011-2016 North America and Australasia. rapidly. In the Middle East and Major supermarkets, such as - 50 100 150 200 250 North Africa region, nearly all Aldi Stores, have increased their In Asia Pacific, increased meat is halal by default whereas range of gourmet or better- urbanisation continues to drive 2011 in Asia Pacific, which also houses quality chilled meat substitutes the shift away from traditional a significant Muslim population, retail outlets to supermarkets and to adapt to this trend. 2012 demand for halal-certified hypermarkets with adequate cold products is growing. In many supply-chain facilities. European countries where Muslims 2013 make up an important minority, In the Middle East, high demand such as France, Germany and for frozen chicken burgers and Meat substitutes growing in popularity 2014 the UK, rising demand for halal chicken nuggets by young meat manifests itself on several In developed countries, meat substitutes continue to witness significant children and adults led to rapid fronts, with supermarkets such as growth, especially in chilled format. With increased availability of meat growth in frozen processed 2015 Carrefour, Sainsbury’s and Tesco substitutes, consumers are also becoming more demanding in terms of poultry during 2017, in countries offering fresh halal meat and the quality of meat substitutes, which has prompted the entrance of more such as Saudi Arabia. Consumers Source: EMI analysis from Passport 2016 meat products, as well as Turkish premium-positioned chilled and frozen varieties. One such example is Bean tend to prefer fresh or frozen or Arabic specialised retailers Supreme, owned by Life Health Foods Ltd, which offers vegan-friendly meat products. Chilled products have selling halal-certified meat. substitutes, such as Bean Supreme Cafe Style Beetroot Burgers in Australia. not been able to thrive due to a lack of manufacturer activity, a Convenient Stores and Discounters smaller variety and shorter shelf Forecourt Retailers

lives. With respect to fresh meat Supermarkets/Hypermarkets Internet Retailing purchases, however, traditional Packaging solutions need to address consumer demand for food safety butcheries, open markets and Traditional Grocery Retailers Other Dairy delis remain an important Food protection and safety is one of the leading concerns in the meat and poultry packaging industry. Key challenges to distribution channel due to poultry in particular are micro-organisms, such as campylobacter. To prevent cross-contamination during the distribution habit persistence and consumer process, Parkside, a packaging manufacturer, developed a silver-based additive, which can be added into coatings used familiarity with traditional ways of to an underlying worldwide trend in various convenient locations on the outer face of packaging, which is known to kill 99.9% of micro-organisms. Oven-usable, roast-in-bag packaging buying meat. for convenience in shopping. As such as business areas and train solutions, which completely free the consumer from having to handle raw meat, are also gaining prominence. consumers become increasingly stations. Growth of internet Internet retailing constitutes the mobile and lead busier lives, retailing is expected to further fastest growth channel across new concepts such as chilled intensify with Amazon’s foray into multiple regions, including collection lockers are emerging. online grocery retailing in 2016. Europe, North America, One such example is emmasbox Australasia and Asia Pacific, due in Germany, which is located

89 Challenges and Opportunities & POULTRY MEAT

Increasing demand for plant based protein products from high income New regulations and higher consumer expectations to steer trends markets is a challenge for value driven growth in meat consumption

Challenges Opportunities COMPOSITION OF F&B INDUSTRIES OF F&B COMPOSITION

Increasing demand for Traceable supply chain Different needs and meat substitutes and plant pressure to comply complexity of multiple Rising health and wellness Development of value- Obtaining standards proteins as a result of with new regulatory channel formats, awareness driving the added products, such as such as halal, Best vegetarianism/ veganism requirements for food safety, consumers looking for consumption of high varieties offering reduced Aquaculture Practices high investment cost value for money protein meat snacks with preparation time and Standard to compete in healthier ingredients increased shelf life the global market

Negative publicity about Increasing energy and Frequent revisions the effects of meat imported animal feed in government meat Meeting standards, such as Increasing demand Ingredients that meet consumption on environment prices, rising cost of animal industry subsidies halal and Best Aquaculture for natural, organic, clean label criteria and and human health slaughtering Practices Standard to compete additive-free meat deliver on taste, flavour in the global market and safety

Online stores such as The rise of meal kit services, High income markets where Traditional channel growth Digital Foodie allowing direct-to-door grocery delivery high-value products compensate in consumer foodservice, customers to connect and retail reinvention, which the high cost of sophisticated better value (meat) for directly with suppliers ranges from menu offerings to supply chain investments lower cost to consumers in-store experience

Supplier/farmer Manufacturer Wholesale/import-export Retailer KEY Moons indicate the level of direct impact on each industry. The fuller the moon, the higher the direct impact Low High

Source: Euromonitor International analysis from Passport, trade interviews and desk research Source: Euromonitor International analysis from Passport, trade interviews and desk research Note: Level of impact mentioned is extrapolated by Euromonitor International based on its market understanding. Note: Level of impact mentioned is extrapolated by Euromonitor International based on its market understanding.

91 Case Study: Beyond Meat

Successful launch of mass-market meat substitutes puts Beyond Meat on a growth path

Name of company Beyond Meat

Coverage Based in the US, the company supplies its plant-based meat substitute products nationwide.

Why Beyond Meat did it? Owing to increasing consumer awareness regarding animal welfare and environmental sustainability, Beyond Meat saw the opportunity to introduce meat-substitute products that closely resembles the real taste of meat.

Key characteristics of growth Successful market introduction of plant-based Beyond Meat products on a mass scale, which tastes as good as meat-based products. Further growing its product portfolio to include Beyond Chicken, Beyond Beef, The Beast and The Beyond Burger patties and Beyond Sausage.

How was it achieved? 1. Beyond Meat first released its Chicken-Free Strips exclusively to Whole Foods Markets in Northern California in 2012.

2. In 2013, Beyond Meat’s meat-substitute products became available nationwide at Whole Foods Markets.

3. Positive reviews about its meat-substitute products including Beyond Chicken, Beyond Beef, The Beast, The Beyond Burger and Beyond Sausage helped the company to proliferate across multiple outlets in the US.

4. In September 2017, Beyond Meat announced a new e-commerce distribution channel for its popular Beyond Burger, by forming a partnership with Chef’d.

5. In November 2017, Beyond Meat expanded its footprint in the meat- centric state of Illinois with distribution of its Beyond Burger in the meat section of 200 Jewel-Osco grocery stores.

Outcome In less than five years, Beyond Meat has expanded the distribution of its products to more than 5,000 supermarkets across the US (from Whole Foods Markets to Kroger and Albertsons) and they can be found on menus at chains like BurgerFi and TGI Fridays. The company has also been successful in collecting more than US$90 million of venture capital from investors, such as Bill Gates and Twitter’s Biz Stone and Evan Williams.

Source: Euromonitor International analysis from Passport, trade interviews and desk research Fats & Oils

93

COMPOSITION OF F&B INDUSTRIES F&B OF COMPOSITION FATS & OILS & FATS 95

Source: Euromonitor International analysis from Passport Distribution Retailers HORCEA Institutions oil Unpackaged Other Logistics B2B Sales B2C Sales Wholesalers Traders oil Packaged  • • • • • • • • • • • components in the production of in the production components commodities, biofuels. As traded is common, volatility price of crude by the price influenced effects oil, annual yields, weather rate exchange and currency regulation Protectionist trends. with India is also common, higher import introducing as aduties on palm oil in 2017 oilseed prices of falling result domestic affecting directly oil, mainly grown Palm growers. and Indonesia, is an in Malaysia the to important contributor with soybean economy, national the to strongly contributing of China and the US economies in Europe. and rapeseed Refining the oil Refining Packaging Branding Manufacturers edible oil Refined OIl-based such as products spreads Biofuel Cosmetics Lubricants Manufacturing   • • • • • • • • • Milling the or seeds Processing  Millers Crude oil Animal feed • • • • Improving agricultural output agricultural Improving with genetic concern is a key changes in crop improvement, management and adaptation and climate regions marginal to to strategies change necessary output. Sustainable improve has been palm oil production 2004 since focus an industry of the with the introduction Palm on Sustainable Roundtable January 2018 but by Oil (RSPO), is only 19% of global production certifiable. One of the main industry challenges is balancing the edible and biofuel oildemand for as the main vegetable products bean, palm, rapeseed oils, soya all base oils, are and sunflower Plantation Growing oil crop Oil seeds or fruit crop Farming Farmers  NA • • • • • Outputs to related industry Process Activity Stakeholder Other outputs Consumers to Farmers From chain supply over control provides integration vertical Backward areas growing geographical the limited due to in the edible oil industry challenge is the key volatility Price increasing look for to companies prompted has ethical production Demand for weather. to and vulnerability chain. all aspects of the supply over control oil supply chain is becoming The with consolidated increasingly controlling conglomerates large For much of the process. palm oil, seven for instance, of 70% for account companies Leading capacity. global refining Wilmar global edible oil player, has an increasingly International, supply chain and integrated from process the entire owns and branding to plantations the quality ensure to distribution of its supply and consistency example, for chain. In 2017, the announced the company and of a refinery purchase from in Malaysia facility storage its increase to in order Cargill, supply chain. the over control

Source: Euromonitor International analysis from Passport 3.9% Africa Sub-Saharan Sub-Saharan Rice, pasta Rice, & noodles (68%) Dry pulses (21%) Supermarkets/ hypermarkets (57%) Traditional grocery retailers (32%) Internet (138%) Discounters (14%) Supermarkets/ Hypermarkets (7.6%) Convenience & Stores Forecourt Retailers (7.4%) South Sudan Gabon Comoros Gambia Ghana 2.1% North America Olive oil Olive (35%) oil Soy (28%) Rapeseed oil (18%) Supermarkets/ hypermarkets (82%) Traditional grocery retailers (6%) Others (5%) Internet (8.1%) Discounters (2.1%) Others (-1.9) Traditional grocery retailers (-0.7%) Canada US 5.1% Africa Middle East & North East Sunflower oil Sunflower (40%) oil Olive (35%) Other edible oils (9%) Traditional grocery retailers (55%) Supermarkets/ hypermarkets (32%) Internet (214%) Discounters (13%) Traditional Grocery Retailers (7%) Convenience & Stores Forecourt Retailers (7%) Oman Lebanon Iraq Bahrain Libya Notes: * Market share of overall edible oils market in 2016 edible oils market of overall share * Market Notes: ** Market channel share of overall edible oils market in 2016 in edible oils market of overall channel share ** Market 2.5% Latin America Latin Soy oil Soy (33%) Other edible oils (26%) oil Sunflower (17%) Supermarkets/ Hypermarkets (57%) Traditional grocery retailers (36%) Internet (16%) Convenience - & Fore Stores Retailers court (13%) Supermarkets/ Hypermarkets (9%) Traditional Grocery Retailers (7%) Paraguay Argentina Guiana French Guadeloupe Martinique 3.2% Europe Internet (13%) Convenience - & Fore Stores Retailers court (5.3%) Discounters (3.4%) Traditional Grocery Retailers (0.0%) Olive oil Olive (47%) oil Sunflower (35%) Other edible oils (8%) Supermarkets/ Hypermarkets (61%) Traditional grocery retailers (16%) Discounters (12%) Moldova Albania Cyprus Montenegro Kosovo 1.5% Australasia Internet (27%) Discounters (17%) Convenience & Stores Forecourt Retailers (1%) Others (-3.7%) Olive oil Olive (56%) Rapeseed oil (18%) Other edible oils (18%) Supermarkets/ hypermarkets (85%) Discounters (10%) Traditional grocery retailers (3%) New Zealand New Australia 3.2% Asia Pacific Internet (50%) Traditional Grocery Retailers (16%) Convenience & Stores Forecourt Retailers (5.4%) Others (5.3%) Other edible oils (30%) oil Soy (22%) oil Palm (18%) Traditional Grocery Retailers (54%) Supermarkets/ Hypermarkets (41%) Bhutan Sri Lanka Nepal Bangladesh Mongolia & Oils & Consumer spending on edible oils as % of F&B total Slowest Slowest growth channels (CAGR 2011-16) Key channels** Fastest growth channels (CAGR 2011-16) Key Sub- Key categories* Key Growth Growth Key Markets (2011-2016) Fats Fats & Oils – At a Glance & Oils – At Fats Market Size and Potential Exhibit 29 Edible oils regional value sales by product type in 2016, 2021 & OILS FATS Asia Pacific 2016 2021

Moderating value growth expected despite strong demand to 2021 Australasia 2016 2021

The total global market value of edible oils stood at US$78 billion in 2016, up by a CAGR of 4.2% on 2011. It is forecast Europe 2016 2021 to reach US$81 billion in 2017. This growth rate is expected to slow to 3.7% as value sales reach US$94 billion in 2021, Source: Euromonitor International analysis from Passport driven by increasing demand for healthy and ethical oils but balanced by ongoing price sensitivity.

Exhibit 28 Edible oils value sales in 2016, 2021 & CAGR 2016-2021, US$ billion Latin America 2016 2021

Middle East and North Africa 2016 2021

4bn 13.3bn Europe North America 2016 2021 0.7% INDUSTRIES OF F&B COMPOSITION 0.5% 3.8bn 13bn 50.8bn North Sub-Saharan Africa 2016 2021 America

13.2bn 4.8% Asia Pacific 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 6.1% 40.2bn 2.1bn 9.8bn

Sub Saharan 2.6% Middle East Olive Oil Corn Oil Palm Oil Rapeseed Oil Soy Oil Sunflower Oil Other Edible Oil Africa & North Africa 9.4bn 1.9bn 0.5bn Latin America 1.9% Australasia 8.6bn 2.4% Olive oil dominates sales in Australasia, North America rely on it. There is a need to move away from it and 0.4bn and Europe and remains the most dynamic category create demand for seed oils. Palm is bad for the in the forecast period. Sales of corn, soy and sunflower environment, for animals, for forests and it has a high oils are depressed as health concerns influence level of saturated fat. Palm can lead to heart attacks. It consumer purchases. Growth in other oils such as is a real problem.” seed and nut oils are expected to expand rapidly in In Latin America, economic uncertainty directly affects KEY : Inner circle indicates edible oils value sales in 2016, outer circle indicates edible oils value sales in 2021 Australasia with growth also expected in Europe as sales of edible oils particularly more expensive pure The distance between the circles indicates the size of absolute growth consumers explore the widening range of less refined, oils such as olive, sunflower or specialist seed oils. natural oils. In the US, consumers are wary of soy Colour of the circles indicate the growth rate Fast Moderate Slow Static Blended and soy oils remain popular due to lower products, which are perceived as containing harmful Source: Euromonitor International analysis from Passport prices, with soy oil dominant and expected to continue oestrogens, highly processed and genetically modified. to grow in the forecast period. Olive oil is the most Corn and palm oil are generally also seen as unhealthy. dynamic category with continuing growth forecast The Middle East and North Africa region is the fastest The mature markets of Europe show the slowest In Asia Pacific, rapeseed/canola oil sales are set to as lower inflation and recovering purchasing power growing, driven by the growth of olive oil, which will forecast growth to 2021 with concerns about health grow due to the perception of the product as healthier, among low- and middle-income groups drive sales. contribute 64% of growth. Consumers, recognising the and wellness continuing to shape consumption lower priced and usable for cooking as well as in dips health consequences of oil consumption, are switching patterns. Growing demand for healthier diets is and salads. Blended oil sales are falling, particularly to better quality and healthier options such as olive, driving sales of olive oil, while vegetable and seed in China, over fears of the use of genetically modified soy, seed and sunflower oil, which are rich in omega oils continue to lose share, partly as a result of new soybeans. The premiumisation trend and rising health 3 and vitamin E and are cholesterol free. In Turkey. regulations on pesticides used in the production of awareness is driving the expansion of olive and other “Palm is bad for the for example, mixed products containing cotton oil, rapeseed oil, which is limiting production volumes. In pure oils, such as sunflower and corn oil. Fortified oils, environment, for animals, safflower oil and canola oil gained retail shelf space Portugal, Oliveira da Serra, launched a premium range those made from organic raw materials and containing sold at the same price as pure sunflower oil. Turkey’s of award-winning monovarietal olive oils produced fewer preservatives are becoming popular with a shift for forests and it has a high Sunflower Producers Association fought against this from Arbequina and Cobrançosa varieties while in from unbranded to branded edible oils among Indian issue and the Ministry of Health banned some of these Germany the premium, hand harvested, cold pressed consumers. level of saturated fat. mixed products. Gaea Fresh natives Olivenöl extra by Importhaus Wilms One of the leading global edible oil players states that: Leading global edible oil was introduced in 2017. “Palm oil is heavily affecting Asia since they primarily manufacturer

97 Market Trends and Drivers & OILS FATS

Health and wellness trends favour Demand for palm Packaging innovations targeting less processed, more exotic oils oil is not very convenience and product preservation optimistic There is a strong shift towards oils that are perceived to be healthier, primarily Innovations in oils tend to centre on packaging that increases convenience, boosting growth of olive oils and other edible oils including coconut and avocado Globally, palm oil is booming: allows better control of the amount of oil used, or helps prevent oxidisation. oils. However, there is no global consensus on what constitutes a healthy oil. however, this rapid growth Spray dispensers were recently launched in the UK by Princes and in Spain Some consumers look to the most natural oils, cold pressed, locally grown, for is due to its popularity in by Aceites del Sur Coosur, Deoleo and Aceites Abril. In Italy, Monini SpA health benefits. Other consumers, particularly in India and Japan, are seeking the dynamic markets of Asia launched a top down squeezable bottle for its Monini Classico range in 2016. fortification with added vitamins and other nutrients. In the US, health concerns Pacific, as well as its low With oxidisation a critical issue in oil packaging and storage, new technology have driven consumers away from soy, corn and palm oils towards olive oil. price attracting consumers aimed at preventing oxidisation is also a key development. One example Soy oil, in particular, is now seen as containing harmful oestrogens, as highly in parts of Africa and is the use of Tetra Prism to package oil, as seen in the Only brand in Spain processed and genetically modified while olive oils are seen as naturally healthy. the Middle East. In much as well as Deoleo’s Kiope brand with sales indicating strong consumer of the developed world, understanding of its benefits. However, consumer acceptance of non- however, consumers are transparent packaging varies by culture. working to avoid palm oil, unless it bears the RSPO INDUSTRIES OF F&B COMPOSITION Consumer scepticism drives the label, which indicates need for credible labels sustainable palm oil. This is Organic oils benefit mainly driven by concerns In the EU, protected designation of origin (PDO) and protected geographical about its environmental from standing at indication (PGI) labels are used for olive oil. GMO-free, kosher and Halal certified impact and its high level the nexus of quality, oils are available in many countries with GMO content particularly sensitive in of saturated fat. Even the sustainability and health Europe and Asia Pacific. Olive oils, in the US, are benefiting from the use of RSPO label is not enough to an FDA approved health claim on their packaging, saying “scientific evidence reassure all consumers, as Among higher income consumers, suggests that eating about two tablespoons of olive oil daily may reduce the its credibility is questioned organic oils are performing well as risk of coronary heart disease”. Singapore’s largest supermarket chain, FairPrice, by leading environmental part of the trend towards healthier now stocks two cooking oil products from RSPO-certified sustainable sources bodies such as Friends of oils. Organic oils are perceived by in response to demand for transparently sourced products among consumers. the Earth and Greenpeace. many as healthier but also a more sustainable and higher quality option. They are enjoying particularly high sales in the US, France, Spain and Italy. Shift from loose to packaged oil Manufacturers are embracing this trend including Carapelli Firenze, owned by in developing market Deoleo, which was the fastest growing manufacturer in this market in 2017 In developing markets, where incomes are rising, following the launch of its range of consumers are shifting from unpackaged to branded natural, organic, unfiltered olive oils. packaged oils. In India, the increased availability of affordable packaged oil is driving sales as consumer look for nutritional, calorie and processing information on the source and content of the oil. As in India, unpackaged oils are common in rural China but consumers increasingly rely on the perceived higher quality, hygienic Wider product ranges are evolving to production and clear packaging information on content cater for different income groups and production of branded packaged oil. While higher income consumers select oils on the basis of taste, health benefits and environmental concerns, lower income consumers are compromising on these points. For instance, Brazil, which has suffered from economic difficulty, has seen a trend of trading down to lower priced oils such as soy, away from Packaging solutions need to address consumer demand for food safety premium and health-positioned options such as olive oil. In parts of Western Europe and North America, the choices available to price-sensitive consumers Food protection and safety is one of the leading concerns in the meat and poultry packaging industry. Key challenges to poultry are wider, and instead of swapping olive oil for lower quality oil, they have in particular are micro-organisms, such as campylobacter. To prevent cross-contamination during the distribution process, swapped branded olive oil for private label and discounter brands, with high Parkside, a packaging manufacturer, developed a silver-based additive, which can be added into coatings used on the outer quality private labels such as Canada’s Metro label playing into this trend. face of packaging, which is known to kill 99.9% of micro-organisms. Oven-usable, roast-in-bag packaging solutions, which completely free the consumer from having to handle raw meat, are also gaining prominence.

99 Distribution Landscape & OILS FATS

Europe has a market for

Traditional grocery retailers specialties, people will lead with a strong presence spend on a beautiful in developing markets bottle of oil. We don’t Globally, the leading sales channel see that in the Middle for edible oils is supermarkets and hypermarkets which accounted for 46% East as much and of value sales in 2016, up from 51% in 2011. The traditional grocery retailers certainly not in Africa. So channel continues to grow in both Asia Pacific and Sub-Saharan Africa with overall I would say the its share of edible oils sales increasing between 2011 and 2016. markets are in different stages of development.” INDUSTRIES OF F&B COMPOSITION Leading global edible oil manufacturer

In the Middle East & North Africa region, traditional grocery Exhibit 30 retailers lead with 55% of edible Global edible oils value sales split by retail channels, 2011-2016 oil sales but as modern retailing expands food/drink/tobacco

- 10 20 30 40 50 60 70 80 90 specialists and supermarkets/ hypermarkets are increasingly 2011 attracting consumers through For example, in Kenya where the middle-income class regions with growth only achieved in Australasia and their wider product and price is emerging, both traditional grocery retailers and the Middle East and North Africa where they are still 2012 ranges. For example, in Saudi supermarkets are growing with supermarkets only benefiting from the initial establishment and rapid Arabia, growth is led by recently beginning to sell bulk oil. expansion of leading discounters such as Aldi and Lidl. hypermarkets and supermarkets 2013 such as Panda and Danube Modern retailing is also expanding in Latin America In Western Europe, supermarkets are continuing to who have been opening new where consolidation in retailing is occurring build share, with 43% of edible oils sales in 2016, but outside the large markets of Brazil and Argentina. they also face competition from the more dynamic 2014 supermarket and convenience stores. Panda, for example, Warehouses, private labels and discounters are also discounter channel. For example, Lidl now stocks opened 18 new stores in 2016 growing their share as price-sensitive consumers organic olive and coconut oils that are perceived as 2015 across Saudi Arabia, the UAE search for value for money in essentials as they high quality. In Eastern Europe, supermarkets lead with and Egypt. Carrefour is also struggle to feed their families. Small local stores a share of 40%, up from 31% in 2011, encroaching on struggle to compete with the economies of scale sales by traditional grocers formats. Hypermarkets, 2016 expanding in the region with Majid Al Futtaim, the franchise offered by modern retail. However, their high discounters and convenience stores are also growing holder, acquiring Retail Arabia, visibility in residential areas ensures their centrality here in line with a broad shift towards convenience and the operator of Geant and and convenience to price-sensitive consumers. the low prices they offer. Convenient Stores and Discounters Forecourt Retailers Gulfmart grocery stores across High quality, price competitive private label oil ranges E-commerce is a niche area for sales of edible oils the UAE, Bahrain and Kuwait in are now present not only in discounters but also but is showing rapid growth (CAGR of 36% 2011- Supermarkets/Hypermarkets Internet Retailing June 2017. among leading retailers in developed markets, placing 16) globally due to the convenience of this option. Traditional Grocery Retailers Other Dairy In contrast, in Sub-Saharan Africa them in a strong position. The introduction of tiered However, it still only represents 1% of total global sales traditional grocers have increased private labels in supermarkets/hypermarkets has and remains a minor channel due to the added cost of lessened the appeal and impact of pure discounters. buying online. Source: Euromonitor International analysis from Passport their market share from 30% in 2011 to 32% in 2016 benefitting Their market share in edible oils is stable in most from rapid urbanisation and slower development of modern retailing infrastructure.

101 Challenges and Opportunities & OILS FATS

The main challenges in edible oils industry root in the very first step Healthy, high quality and ethical oils present opportunities of the supply chain

Challenges Opportunities COMPOSITION OF F&B INDUSTRIES OF F&B COMPOSITION

High cost of Weather volatility High cost of investment Using sustainable Agricultural transformation Increasing demand ethical farming impact on consistent in modernisation and and ethical farming in Sub-Saharan Africa, Latin for oil crops by other quality of oil crops scaling up methods offers America and Asia is reducing industries to use in greater sales potential crop volatility and providing other end products, growth opportunities particularly biofuel

Difficulties in traceability Foreign exchange Overcoming consumer Innovative Clear and credible Widening consumer palate due to fragmentation rate risk due to concerns over ethics in palm packaging labelling to address and globalising culture is in the supply chain and dependence on narrow oil production as well as emphasizing issues of health, encouraging usage beyond dependence on sourcing geographic footprints trust in quality controls convenience quality and ethics traditional oils from small farms of most oil crops

Rising competition from Consolidation and Consolidation and rise of Higher sales mark Increasing demand Rising consumer private labels, both at vertical integration larger scale manufacturers ups through for exotic oils such awareness of the the value and premium squeezing out puts price pressure on value-added oils in as coconut oil and benefits of quality/ ends of the market wholesalers middlemen developed countries walnut oil healthy oils

Supplier/farmer Manufacturer Wholesale/import-export Retailer KEY Moons indicate the level of direct impact on each industry. The fuller the moon, the higher the direct impact Low High

Source: Euromonitor International analysis from Passport, trade interviews and desk research Source: Euromonitor International analysis from Passport, trade interviews and desk research Note: Level of impact mentioned is extrapolated by Euromonitor International based on its market understanding. Note: Level of impact mentioned is extrapolated by Euromonitor International based on its market understanding.

103 Case Study: & OILS FATS Wilmar International and the Etchics of Palm Oil

As one of the prominent challenge in edible oils industry, traceability prompted Wilmar International to take action regarding the ethics of palm oil

Name of company Wilmar International 3. Committed membership of RSPO, certified GMO-free production, Tropical Forest Alliance (TFA) and Indonesia Palm Oil Certification (IPSO) and International Sustainability and Carbon Certification (ISCC). COMPOSITION OF F&B INDUSTRIES OF F&B COMPOSITION Coverage Leading global manufacturer of edible oils and other agribusiness, working 4. Partnership with Verité Southeast Asia to ensure via an integrated business model from origination and processing to safe, fair and legal working conditions. branding, merchandising and distribution of a wide range of agricultural products, as well as a strong research and development arm. 5. In late 2017, Wilmar joined other palm oil buyers, Colgate- Palmolive, Kellogg, Nestlé, Unilever and BSR (Business The company is based in Singapore; its key markets are Asia for Social Responsibility), in taking collective action to Pacific and Sub-Saharan Africa where it sells palm oil and improve working conditions and the livelihoods of workers soy oil under a number of brands including Arawana. across the wider palm oil supply chain in Indonesia.

4. In November 2017 it launched its new Child Protection Policy Why Wilmar did it? The company is at the centre of controversy regarding palm oil (CPP) which takes a broader view to safeguarding the welfare and deforestation, and is working to navigate its way through of children than its existing No Child Labour Policy maintaining its brand image in the face of negative media 5. In December 2017, the company reached agreement on a low interest reports and a consumer base that is increasingly sceptical rate loan specifically linked to sustainability performance targets about corporate claims regarding quality and ethics.

While a large proportion of the company’s consumer base is primarily Outcome concerned with price rather than ethics, demand for clean labels is on Wilmar has made tangible progress in improving its supply chain and the rise, particularly in key markets such as China, and among young this is helping it to regain control, transparency and reputation. urban consumers. Indeed, in Asia Pacific, oils carrying GMO-free labels are forecast to increase by a 2.4% CAGR between 2016 and 2021. Source: Euromonitor International analysis from Passport, trade interviews and desk research Beyond this, Wilmar sells palm oil to international food manufacturers such as Nestlé for use in their end products, which in turn are required to have a spotless supply chain. The company is facing significant pressure to address these issues.

Key characteristics of growth The company is working to stabilise and increase its sales of edible oils following criticism of its role in deforestation and peatland destruction, use of child labour, unsafe worker conditions and a failure to pay minimum wage to workers. It hopes to achieve this by incorporating sustainability metrics into every aspect of its business and improving work practices.

How was it achieved? 1. Established a “No Deforestation, No Peat, No Exploitation Policy” in 2013 as an umbrella programme for its multiple sustainability goals.

2. Promoted the company’s initiatives by increasing the information availability regarding its sustainability practices.

105 Key market trends shaping the food and beverage industries are adopted BRANDS POWER by major players leading and shaping the industry. However some trends appear to be more prominent

Premiumasition Nestle

Heath and wellness Danone

Product diversifications through deals Kraft Heinz

Data driven marketing Coca-Cola

Cargill Food safety INDUSTRIES OF F&B COMPOSITION

Source: Euromonitor International analysis from Passport, trade interviews and desk research

Nestlé SA

Investment in health and nutrition and emerging markets is Nestlé’s key growth strategy

Name of company Nestlé SA

Geographical coverage 191 countries

Category coverage Packaged Foods Beverages (Hot and Cold Drinks) Dairy Confectionery Pet Care Health and Wellness Nutrition

Total revenues in 2016 US$9.07 billion

Revenue split by region Americas – 44.9% Europe, Middle East and Africa- 30% Power Brands Asia, Oceania and Sub Saharan Africa- 25.1%

107 Total revenue growth over the -2.3% Kraft Heinz Company BRANDS POWER past 3 years

Operating costs in 2016 6.7% (as % of total revenues) Investment in less processed and more natural foods R&D expenditure in 2016 1.92% is Kraft’s key growth strategy (as % of total revenues)

Key selling brands* Kit Kat, Nescafé, Maggi, Nespresso, Toll House, Milo Name of company Kraft Heinz Company

Business & growth strategy In developed markets: Geographical coverage 200 countries • Premiumisation

• Target marketing for key premium brands, such as Haagen-Daaz and Category coverage Dairy Nespresso Sauces Dressings and Condiments • New product launches highlighting functional benefits Processed Meat and Seafood COMPOSITION OF F&B INDUSTRIES OF F&B COMPOSITION In developed markets: Ready Meals Processed Fruit and Vegetables • Price variation – for different pack sizes and variant types (e.g. Nescafé, Savoury Snacks Maggi) Baby Food • Partnership or close collaboration with local/regional distributors and Baked Goods retailers to promote product positioning Soup Spreads • Focus on Through The Line Marketing via social media and events

Total revenues in 2016 US$26.8 billion Key characteristics of growth • Investment of US$318.6 million in new US pet food factory

• Development of new type of hollow sugar crystals, which reduce Revenue split by region/ US: 69.4% consumption by 40%, to be introduced in different products country Canada: 8.9% Europe: 9.3% • Focus on the expansion of its Health and Wellness products Rest of the World: 12.4%

How was it achieved? • Strong geographic coverage as can be seen in all 7 continents Total revenue growth over the 34.9% past 3 years • Specific growth strategies for developed and developing markets

• Strong product portfolio with over 2,000 brands Operating costs in 2016 76.9% • Showcases strong social and environmental responsibility (such as by (as % of total revenues) waste reduction)

• Strong emphasis on R&D supporting indicating continuous growth and R&D expenditure in 2016 NA new product launches (as % of total revenues)

• Strong consumer engagement Key selling brands* Kraft, Oscar Mayer, Heinz, Planters, Philadelphia

Note: *Selected based on their portfolio, share to total revenues and brand image. Business & growth strategy In developed markets: Source: Euromonitor International analysis from Passport, trade interviews and desk research • Focus on using more natural and less processed ingredients

• Oscar Mayer’s strong performance in chilled processed meat and lunch kits, with a growing focus on offering high protein-based products

In developed markets:

• To capitalise on the growing positive image of the Heinz brand in sauces

• Opportunities for growth in cheese in Indonesia

109 Future expansion plans • With Kraft Heinz relying mainly on the mature North American markets Revenue split by region/ Europe, Middle East and Africa: 16.8% BRANDS POWER for its largest category, cheese, it may seek to focus its growth efforts on country North America: 15.4%, emerging markets, notably under key local brands already in its portfolio, Asia Pacific: 11.4% in Brazil and Indonesia Latin America: 8.9%

• The group may seek to acquire niche companies which would help shift its positioning towards healthier, natural products, notably with healthy Total revenue growth over the 1.2% snack brands, which would help resume a sustainable growth strategy past 3 years

Operating costs in 2016 4.0% Key strengths • Following the merger between Heinz and Kraft in 2015, the new entity (as % of total revenues) gained greater scale of operations and global reach. It also swiftly implemented cost cuts and has been able to raise its profit margins R&D expenditure in 2016 N/A (Coca-Cola has spent US$132.8 million on R&D in the past five years) • A wide global reach for Heinz in emerging markets, notably due to (as % of total revenues) acquisitions in Latin America and Asia, adds to Kraft’s strong position in the US. The group’s brand portfolio spans numerous packaged food Key selling brands* Coca-Cola, Sprite, Diet Coke categories

Business & growth strategy • Increase investment in major emerging markets Note: *Selected based on their portfolio, share to total revenues and brand image

Source: Euromonitor International analysis from Passport, trade interviews and desk research • Small-scale acquisitions in developed markets to enrich its health and INDUSTRIES OF F&B COMPOSITION wellness portfolio

• Seeking growth beyond carbonates, such as bottled water

• Re-franchising and re-organisation of its bottling operations

Future expansion plans • Favourable demographics and relatively less health-consciousness trend put Middle East and North Africa and Asia Pacific as potential drivers of carbonates growth

• Growing still bottled water in major markets such as China

• Higher product proliferation in juices in emerging markets Coca-Cola • Introduction of dairy-based products such as Vio and coconut water such as Zico

Key strengths • Dominant market share – it is the largest non-alcoholic beverage company in the world Foraying into bottled water and non-cola beverages reflects Coke’s key growth strategy • Wide geographic distribution in developed and developing markets • Economies of scale allow Coca-Cola to sell its products at the cheapest prices possible

Name of company Coca Cola • Different marketing strategies target all consumers by employing favoured celebrities in their advertisements

Geographical coverage More than 200 countries Note: *Selected based on their portfolio, share to total revenues and brand image Source: Euromonitor International analysis from Passport, trade interviews and desk research

Category coverage Beverages – Powdered and liquid beverages – Soft drinks – Water

Total revenues in 2016 US$41.9 billion

111 Cargill In developed markets: BRANDS POWER • To capitalize on the growing positive image of Clean Labels in food and beverage.

• Cargill’s portfolio is heavily focused on health care needs, while the Clean label ingredients and products remain key focus area for Cargill natural sourcing of its ingredients is expected to drive the growth towards health and wellness range of products.

• Investment in innovation and training to increase productivity in food, agriculture and industrial products.

Name of company Cargill Future expansion plans • Focus on clean label and sustainability along with other labels such as non-GMO, free from and organic foods, one of the few companies 70 countries Geographical coverage considering to invest in blockchain technology for food safety purposes.

• Cargill may continue to target developing markets, where growth Category coverage Agricultural products opportunities continue to exist, even in core ingredients categories. Asia Animal Nutrition Pacific, Middle East and Africa may deliver faster growth in categories Bioindustrial such as personal care products. Food and Beverage COMPOSITION OF F&B INDUSTRIES OF F&B COMPOSITION Foodservice Meat and Poultry Key strengths • Expertise in the agricultural, meat and poultry supply chain. Pharmaceutical • Cargill should continue to target developing markets such as Africa, Transportation where growth opportunities continue to exist. Risk Management • Focus on sustainability and responsible sourcing of food and raw materials is expected to attract growing population of environmentally US$107.1 billion Total revenues in 2016 conscious consumers.

Revenue split by region/ US: 36%, Note: * selected based on their portfolio, share to total revenues and brand image country Asia Pacific: 27%, Source: Euromonitor International analysis from Passport, trade interviews and desk research Europe, Middle East and Africa: 24% Latin America: 13%

Total revenue growth over the 2% past 3 years

Operating costs (as % of total NA revenues) in 2016

R&D expenditure (As % of 0.4% total revenues in 2016)

Key selling brands* Sterling Silver, Angus Pride, Honeysuckle White, San Miguel

Business & growth strategy In developed markets: • Focus on value added meat and poultry products.

• Acquisitions to target clean label ingredients portfolio and expanding regional reach.

• New product developments in the health and wellness category.

113 Appendices 01

CATEGORY (“sparkling juices”) are included varieties are included non-cola as well as herbal products such Bandung (rose syrup with milk), (Arla Foods), Kerrygold (Irish here, unless they are tea-based carbonates. Juice-flavoured milk as guarana and ginseng. Can bird’s nest, tamarind juice, ginger, Dairy Board), Président (Lactalis), DEFINITIONS (these are included in carbonated drinks and fruit shakes which are be carbonated or still. Leading lemongrass, roselle, zalaka, Land O’ Lakes (Land O’ Lakes). RTD tea) or carbonated Energy primarily milk are excluded–these brands in off-trade volume jelly drinks including grass jelly drinks, which are included in are instead tracked in Packaged include Red Bull, Monster and (cincau), sugar cane, and vinegar Margarine and Spreads Beverages Energy Drinks. Carbonated Foods Dairy. However, if the RockStar. Glucose-based energy drinks. Lactic acid drinks, such as Margarine and spreads are fatty bottled water is also excluded. juice component is greater, the beverages such as Lucozade Calpis, are included here. Drinks butter substitutes consisting Hot Drinks Carbonates are an aggregation product is to be excluded from Energy are included here. containing a limited amount of of a blend of vegetable oils This is the aggregation of Coffee, of cola carbonates and non-cola Packaged Foods Dairy coverage yogurt (generally 3% or less) mixed with emulsifiers, vitamins, Tea, and Other Hot Drinks. carbonates, whether regular and tracked under the relevant Sports Drinks such as Bikkle, are included coloring matter, and other

The choice of sports drink usually ingredients. Margarine is typically APPENDICES Coffee or low calorie. Euromonitor category (based on % juice here, though drinking yogurts depends on the provision of used to fry food in a pan, This is the aggregation of fresh International includes both content) within Soft Drinks juice. such as Yakult are excluded. fluids, carbohydrates or both. alternatively to bake. It also has coffee and instant coffee. Please naturally and artificially- This sector is the aggregation While both products are highly Included into this subsector a higher level of fat which allows note that foodservice sales of sweetened carbonates. of 100% juice, nectars (25-99% popular in markets like Japan, are isotonic, hypotonic and it to resist high temperatures. coffee are volumes sold to the juice content), juice drinks drinking yogurts will contain Concentrates hypertonic sports drinks. Isotonic Spreads (previously known as on-trade (foodservice) sector and (up to 24% juice content), and mostly yogurt with a very short This is the aggregation of are products that replace lost spreadable oils and fats) typically not those sold to the consumer. coconut & other plant waters. shelf life (two weeks or less), liquid concentrates and body fluids, electrolytes (sodium, while yogurt drinks will contain have higher water content and Tea powder concentrates. RTD Coffee potassium and chlorides) and less than 3% dairy and remain on are more liquid. This means This is the aggregation of Black Includes packaged ready-to-drink glucose in similar concentrations that they are predominantly Liquid Concentrates the shelves for up to 9 months. Tea, Fruit/Herbal Tea, Green Tea, coffee, consumed either hot or to existing body fluid without used for spreading on bread Concentrates and syrups, or All nut or pulse-based products, Instant Tea, and Other Tea. cold, made using a base of either causing either swelling or and other baked goods. Newer alternatively known squashes such as peanut milk, almond Other Hot Drinks brewed coffee or coffee extract. shrinkage of cells. These liquid or spray variants of both or dilutables, which are diluted juice, or soy drinks are tracked This is the aggregation of Excludes all coffee flavoured products usually contain about margarine and spreads brands with water before consumption. in Non-Dairy Milk alternatives Flavoured Powder Drinks and milk drinks that primarily target 5-8% carbohydrate and are are also captured here. Leading Based commonly on fruit juices, in Passport Packaged Food. Other Plant-based Powder children, or where coffee is one intended to be consumed during global examples include Rama however are also available Drinks. Products can be served of a number of flavours within the exercise and/or heat exposure. (Unilever), Becel (Unilever as other in other forms, for hot or cold, and can be mixed brand range. Leading brands in Hypotonic this product is a Group), Claybom (Unilever), example cola. Dilution ratios Dairy with water, milk, or other off-trade volume include Georgia, weaker solution than your body Milda (Unilever), Stork (Unilever), vary from country to country, liquids. Bottled, ready-to-drink Nescafé and Suntory Boss. fluid. These drinks contain less Blue Band (Unilever), Raisio due to local preferences and Butter flavoured milk drinks are NOT carbohydrate and therefore have Edible yellow fat, salted or (Raisio), Blossom (Epic Foods), available brands. Leading brands RTD Tea included here and are included lower osmolality (fewer dissolved unsalted, including spreadable Sunshine D (Tiger Brands), in off-trade volume include This category includes all in Passport Packaged Food. particles than blood). These and low fat butter. Typical Star (San Miguel Corp), Elio Robinsons, Tucan and Brookes. packaged products based on drinks help the body to speed composition of butter is butterfat (Cevital), Vitam (Unilever). Soft Drinks brewed tea or tea extract. May Powder Concentrates up water absorption and are or could be termed as milk fat This is the aggregation of the be sweetened or unsweetened, Cheese Powder concentrates, including best used when you need urgent (80%-82%) and water (16-17%) following categories; Carbonates, carbonated or still, with a This is the aggregation granules and blocks/bars/cubes fluid replacement, as in after and the remaining: milk solids/ Fruit/vegetable juice, Bottled wide variety of different of processed and are diluted with water before exercise. These drinks are not curd and/or salt. Low fat and water, Functional drinks, flavourings. May contain juice. unprocessed cheese. consumption. Please note that the best for energy replacement. spreadable butter are included Concentrates, RTD tea, RTD powdered ice teas are included Sports and Energy Drinks Hypertonic - this drink is a here, however, note that such Processed Cheese coffee and Asian speciality drinks. within this subsector. Leading This category is the aggregation stronger solution than your body products would then contain This is the aggregation of fluid. These drinks are designed Bottled Water brands in off-trade volume of sports and energy drinks. small amounts of vegetable spreadable and unspreadable to replace and maintain energy This sector includes sparkling include Tang, Nestea Instant Iced oil/fat. For example, Lurpak processed cheese. Energy Drinks levels during exercise of at least water, spring water and Tea Mix and Nestlé Orange-C. Spreadable has a blend of These are functional drinks one hour. They are absorbed Spreadable Processed Cheese purified/table water. This is butterfat at 75% and vegetable Juice designed to boost energy levels. slowly and therefore are not Also called cream cheese, the aggregation of still bottled fat at 25%, Lurpak Lighter This category covers all still Often lightly carbonated, these appropriate for fluid replacement. included is any soft spreadable water, carbonated bottled Spreadable a blend of butterfat packaged juice obtained contain high levels of caffeine Leading brands in off-trade cheese which is processed water, flavoured bottled water at 64% and vegetable fat at 36%. from fruits or vegetables and a number of added water- volume include Gatorade, following manufacture and sold and functional bottled water. Mixed block butter products by mechanical processes, soluble vitamins, most often a Powerade and Aquarius. are also included (eg butter and pre-packed on shop shelves. Carbonates reconstituted or fresh, often selection of B vitamins including canola oil, butter and margarine), Spreadable processed cheese Asian Speciality Drinks Sweetened, non-alcoholic drinks including pulp or fruit/vegetable niacin, pantothenic acid, vitamin however, butter must be the main also includes reconstituted/ This category includes all containing carbon dioxide are puree. All unpackaged juices B6, and vitamin B12. Ingredients component (at least 50%) for processed spreadable cheeses, traditional Asian drinks not included here. All carbonated are excluded. Only still drinks can also include amino acids such it to be classified here. Leading ie made from the “waste” of included in RTD tea or juice products containing fruit juice are included here. Carbonated as taurine and glucuronolactone, global brands include Lurpak various cheeses. The products drinks, including products such as

115 Appendices 02

are packaged either in tubs or Grated or sliced versions are Co Ltd), Hershey’s (Hershey), Fresh Milk degrees Celsius and held there Powder Milk glass jars. Processed cheese excluded. Leading global Toddy (PepsiCo), Nescau This is the aggregation of full for approximately 2 seconds. Powdered milk (dehydrated) used for cheese fondue is also brands include Kraft (Kraft (Nestlé). Note: Includes all fat, semi-skimmed and fat-free After heat treatment, UHT used in place of fresh or long included here. Leading global Foods), Tillamook (Tillamook coffee flavoured milk drinks that fresh/pasteurised milk. Note: ESL products may be sent to a sterile life milk or goat milk. Excludes brands include Philadelphia County Creamery), Leerdammer primarily target children, where (or extended shelf-life) milk is tank to give a buffer prior to infant milk formula. Soy based (Kraft Foods), La Vache Qui Rit (Unibel SA), Sargento (Sargento coffee is one of a number of included under fresh/pasteurised filling. Filling is usually done in powder milk products are to (Unibel), Hochland (Hochland Foods), Président (Lactalis). flavours within the brand range. milk. ESL is a treatment which a sterile atmosphere where the be included here as well. Also Reich, Summer & Co), Easy Eg Morinaga Piknik – available in extends the shelf-life of chilled/ UHT packing machine flushes the includes all powder milk for Cheese (Kraft Foods). Soft Cheese Coffee, Fruit, , Yoghurt, refrigerated products. For fresh/ package with Nitrogen and also pregnant and nursing women, Natural, unprocessed soft and Energy Milk by Emmi - available pasteurised milk, shelf-life keeps the area withing the filling sometimes known as mothers’ Other Processed Cheese semi-hard cheese. Examples are in 5 flavours banana, strawberry, can be extended from 5 days heads flooded with Nitrogen to milk formula. Leading global APPENDICES Any unspreadable cheese Camembert, Brie, Roquefort, vanilla, chocolate and mocca. to 1 or 2 days more or even eliminate any air contamination brands include Nido (Nestlé), which is processed following Feta, Mozzarella, Ricotta, Excludes RTD coffee drinks, up to 30 days (depending on as bacterea, moulds, etc require Ninho (Nestlé), Klim (Nestlé), manufacture and sold pre- Rambol, Blue Cheese, Danish including all coffee flavoured milk the treatment/filler used). air to grow Long-life UHT milk Sanlu (Shijiazhuang Sanlu Group), packed on shop shelves. This Blue (Unibel SA) Leading global drinks that primarily target adults. is typically shelf stable (can be Anchor (Fonterra Co-operative includes reconstituted/processed brands include Kraft (Kraft Typically the brand range will Fat-free Fresh Milk stored without refrigeration) Group), Itambé (Itambé SA), Peak unspreadable cheese, ie made Foods), Président (Lactalis), include a variety of coffee types, Fresh fat-free milk. May be until it is opened, after which (Royal Friesland Foods NV). from “wastes” of various cheeses. Sargento (Sargento Foods), such as espresso, cappuccino etc. referred to as skimmed or 100% time it must be refrigerated. Product type includes cheese Invernizzi (Kraft Foods), Galbani This goes in RTD coffee in Soft skimmed milk (fat content Leading brands include Parmalat Milk Alternatives slices/singles, cheese sticks. (Galbani SpA, Egidio), Sorrento Drinks Examples include: Caffé defined where possible). (Parmalat Group), Mengniu (Inner This is the aggregation of soy Leading global brands include (Lactalis), Santa Lucia (Galbani Latte by Emmi: In 3 flavours: In the EU, this is referred Mongolia Mengniu Group), Yili drinks, soy milk and other Kraft Singles (Kraft Foods), SpA, Egidio), Société (Lactalis), Espresso, Macchiato, Cappuccino to as skimmed milk and is (Inner Mongolia Yili Industrial milk alternatives, as defined Velveeta (Kraft Foods), Borden Cœur de Lion (Bongrain). considered to have a minimal Group Co Ltd), Elegê (Avipal SA), below. Please note: Only RTD (Dairy Farmers of America Flavoured Milk Drinks fat content, ie of up to 0.5%. Pascual (Leche Pascual SA). liquid products are included. Inc), Babybel (Unibel). Milk with Fruit Juice Soy powder is excluded and Drinks made of milk to which Semi Skimmed Fresh Milk Drinking Milk Products Fat-free Shelf Stable Milk tracked in powder milk. Unprocessed Cheese fruit juices have been added, Fresh semi-skimmed milk. May This is the aggregation of fresh/ Long-life/UHT fat free This is the aggregation of eg mango, orange, strawberry, be referred to as half fat or half- Soy Drinks pasteurised milk, long-life/ milk. May be referred to as spreadable unprocessed cheese, banana, cherry, apple, etc. and-half (fat content defined Drinks made of soy to which a UHT milk, goat milk, flavoured skimmed or 100% skimmed soft cheese and hard cheese. “Smoothies” are excluded. Soy where possible). In the EU, semi- minimum of 20% of fruit juices milk drinks, non-dairy milk milk (fat content defined milk and ice cream based milk skimmed milk has a fat content have been added, eg mango, Hard Cheese alternatives, powder milk and where possible by country). shakes are excluded. Leading of between 1.5% to 1.8%. In the orange, strawberry, banana, This is the aggregation of flavoured powder milk drinks. global brands include Danao US, semi skimmed milk has a fat Semi Skimmed Shelf Stable Milk cherry, apple, etc. In order packaged and unpackaged (Danone), Tropika (Danone), Meiji content of between 1% and 2%. 1% Long-life/UHT semi skimmed for a product to be tracked hard cheese. Flavoured Milk Drinks This is the aggregation of (Meiji Dairies), Bio Frutas (Leche milk is also included under semi- milk. May be referred to as here, the milk alternative must Packaged Hard Cheese dairy only flavoured milk Pascual), Lattella (Danone), Milk skimmed, and not as fat-free. half fat or half-and-half (fat be its dominant component Natural, unprocessed hard drinks and flavoured milk & Fruit (Friesland Coberco Dairy). content defined where possible (ie, either greater than 50% Full Fat Fresh Milk cheese sold pre-packaged. drinks with fruit juice. by country). In the EU, semi- or at least greater than the Milk Fresh full fat milk (fat content Examples include Cheddar, Edam, skimmed milk has a fat content juice component). If the juice This is the aggregation of defined where possible, ie the Parmesan, Emmental, Gouda, Dairy Only Flavoured Milk Drinks of between 1.5% to 1.8%. In the component is greater, the fresh/pasteurised, long-life/ percentage accepted as full Leerdammer, etc. Grated or Drinks made of milk to which US, semi skimmed milk has a fat product is to be excluded from UHT and goat milk. Note: ESL fat in each country). In the sliced versions are also included. flavouring (artificial or natural) content of between 1% and 2%. 1% Packaged Foods Dairy coverage (or extended shelf-life) milk EU, the fat content of whole Leading global brands include has been added, eg chocolate, milk is also included under semi- and tracked under the relevant included under fresh/pasteurised milk or standard whole milk Kraft (Kraft), Tillamook (Tillamook orange, strawberry, banana, skimmed, and not as fat-free. category (based on % juice milk. ESL is a treatment which is up to 3.5%. In the US, fat County Creamery Association), vanilla, etc. Milk shakes are content) within Soft Drinks fruit/ extends the shelf-life of chilled/ content of whole milk is 4%. Full Fat Shelf Stable Milk Leerdammer (Unibel SA), included. RTD Milo and the like, vegetable juice. Fruit-flavored which are milk modifier drinks, refrigerated products for eg Long-life/UHT full fat milk (fat Sargento (Sargento Foods). Shelf Stable Milk soy-based drinks (eg Ades fresh/pasteurised milk from 5 content defined where possible are also included. Soy milk and This is the aggregation of full from Unilever) are included in days to 1 or 2 days more even ie the percentage accepted Unpackaged Hard Cheese ice cream-based milk shakes fat, semi skimmed and fat-free soy drinks regardless of their 30 days shelf-life (all depends as full fat in each country). Natural, unprocessed hard are excluded. Leading brand long-life/UHT milk. It includes positioning in the local market cheese sold from delicatessens examples include Mengniu (Inner of the treatment/filler used). any fluid milk whose shelf-life Goat Milk as juice drinks. Brand examples or supermarket and cut to Mongolia Mengniu Group), include Ades (Unilever) and Cow’s Milk (unopened) has been extended Any type of milk eg low-fat order. Cheese types include Nesquik (Nestlé;), Yili (Inner Soy Frut (Grupo Herdez). This is the aggregation up to 6 months, oftentimes via or full fat or semi-skimmed Cheddar, Edam, Parmesan, Mongolia Yili Industrial Group of fresh/pasteurised milk a process whereby the milk is which comes from goats. Goat Emmental, Gouda, Leerdammer, Co Ltd), Wahaha (Danone), Mt and long-life/UHT milk heated to approximately 145 milk powder is excluded and Raclette cheese, Cantal, etc. Rainier (Morinaga Milk Industry classified under powder milk.

117 Appendices 03

Soy Milk Sour Milk Products is also included here regardless Fruited Yoghurt with vegetarian ingredients and/ from Euromonitor’s Packaged Milk alternatives which contain Includes kefir, lassi as well as of flavour. Drinking fromage Yoghurts containing pieces of or sauces fall under canned ready Food coverage. They would at least 50% soy content (or buttermilk and whey drinks. Kefir frais, also typically positioned fruit (or whole fruits) eg pears, meals or Shelf stable ready meals. be tracked in Euromonitor’s at least the largest component is significant in Eastern Europe. for children is included here. strawberry, , cherry, separate Fresh Food research. of the product). Both plain A cultured-milk beverage, Includes both normal/regular raspberry, blueberry, etc. Low Chilled Processed Meat & Poultry Plain meat or poultry cuts eg and flavoured (eg chocolate- kefir has a creamy consistency drinking yoghurt as well as fat fruited yoghurts are included. Packaged processed meat and beef steak, pork chops and flavoured) varieties are included and slightly sour taste. Kefir is products with a “functional” Competing products with non- poultry (ie, beef, pork, lamb, minced meat, chicken breasts here. Also includes soy milk prepared by culturing fresh milk positioning. Functional products fruit toppings are also to be chicken, duck) sold in the self- are thus excluded. Frozen meat combination beverages (eg soy with Kefir grains/ granules which refer to any products with included here. Leading global service shelves of retail outlets. substitutes are also excluded. and rice milk blends; soy and are a natural mother-culture. a specific functional health brands include Danone (Danone), This includes burgers (meat almond milk blends). Soy and Traditionally, butter milk is the positioning. For example, pre/ Yoplait (Sodiaal SA), Müller or poultry based), nuggets, Meat Substitutes APPENDICES fruit blends are also included slightly sour, residual liquid pro biotic drinking yoghurts (Molkerei Alois Müller), Vitalinea/ sausages, breaded chicken fillers, This is the aggregation of shelf as long as the juice component which remains after butter is have ingredients that are living Vitasnella/Taillefine (Danone), pâté, ham (standard or smoked), stable meat substitutes, chilled s below 20%. One example of churned, ie. milk from the butter organisms which affect the Nestlé (Nestlé), Morinaga salami, bacon, pepperoni, chorizo, meat substitutes and frozen such a product is Alpro Soy & or buttermilk. It is usually flecked ability of other living organisms (Morinaga Milk Industry Co Ltd), chilled meat snacks (meat or meat substitutes, as well as free Fruit tropical. Brand examples with tiny spots of sweet, creamy to survive in an environment. Ehrmann (Ehrmann), Ski (Nestlé), poultry based), etc. Vegetable from meat soy-based ready include Silk (White Wave), Vive butter. The flavor of buttermilk is Specifically, the product must Silhouette (Danone), Bauer meat analogues (meat substitute meals and other ready meals. Soy (Leche Pascual), Alpro Soja similar to yoghurt. Commercial contain living organisms/bacteria (Bauer), Bulgaria (Meiji Dairies). products which are made from (Vandemoortele International buttermilk is nowadays made that, when consumed in adequate vegetarian ingredients, eg NV), Bjorg (Distriborg Groupe by adding a lactic acid bacteria numbers survive in the large Plain Yoghurt Linda McCartney, Yves Veggie Pulses, Grains SA), Kibun (Kibun Food culture to pasteurized sweet intestine long enough to offer Unflavoured yoghurts, often Cuisine) are also included here. & Cereals Chemifa Co Ltd), Marusan milk and it may or may not health benefits beyond basic known as “natural” yoghurt. Unpackaged chilled processed Includes plain set yoghurt and meat or poultry sold over-the- (Marusanai Co Ltd), Vegemil have added butter flecks; the nutrition. Squeezers (tube format Breakfast Cereals (Dr Chung’s Food Co Ltd), 8th milk is later left to ferment. yoghurt) are not included; these yoghurt made from different counter (ie, via deli counters) types of milk, eg cow, sheep, is wholly excluded. Note sales This is the aggregation of ready- Continent (General Mills Inc). Low/reduced fat sour milk are spoonable yoghurts sold in to-eat (RTE) and hot cereals. drinks are also included here. a type of packaging (a paper or goat, etc. Low fat plain/natural of packaged raw pieces/cuts of Other Milk Alternatives Leading brands include Müller plastic tube) that do not require a yoghurts are included. Leading meat or poultry and minced meat Hot Cereals Includes all other explicitly (Molkerei Alois Müller GmbH & spoon for consumption. Leading global brands include Danone are also excluded, as these are Includes porridge and instant hot positioned milk substitutes that Co KG), Arla (Arla), Milko (Milko global brands include Yakult (Danone), Tikvesli (Danone), not considered to be “processed”. cereals e.g. oat, wheat, rice, etc. are not actually dairy-based, and Ekonomisk Förening), Cultura (Yakult Honsha), Activia (Danone) Bulgaria (Meiji Dairies), Instant hot cereals are defined by which are also not made from Vitalinea/Vitasnella/Taillefine Frozen Processed Meat (Tine BA), Kefir Domik v Derevne LC1 (Nestlé), Joie (Yakult Processed products are cuts the fact that they can be made in soy. Such products are typically (Wimm-Bill-Dann Produkty Honsha), Yoplait (Sodiaal), (Danone), Total (Philippou a dish with added water or milk derived from grains or nuts, with Group), Velouté (Danone), of plain meat or poultry which Pitania OAO), TineMelk (Tine Danone (Danone), Benecol are further prepared, typically and can be microwaved. Porridge prominent examples including BA), Lifeway (Lifeway Foods (Raisio Group), Flora Pro Activ Nestlé (Nestlé), Campina is generally made by using an oat rice milk, oat milk, almond milk, (Campina BV, Zuivelcoöperatie), with the addition of other Inc), Chudo (Wimm-Bill-Dann (Unilever), Emmi Evolus (Emmi), ingredients including sauce, based cereal cooked in milk or hazelnut milk and hemp milk. Produkty Pitania OAO), Lben Actimel (Danone) Bulgaria Sutas (Sutas AS), Al Safi water. Only products to eat are Both plain and flavoured (eg (Danone), Yoplait (Sodiaal). marinade, seasoning, breading/ Centrale (Centrale Laitière (Meiji Dairies), Al Safi (Danone), batter, etc. Product types include: included. Hot cereals beverages chocolate-flavoured, vanilla- Maroc Lait), Kløver (Arla). Dan’Up (Danone), Danimals are excluded. Leading global flavoured, etc) varieties are Other Dairy sausages, meat burgers, boeuf (Danone), Mona (Campina BV, This is the aggregation Bourguignon, pork chop with brands include Quaker Oatmeal included here. Please note that Yoghurt Zuivelcoöperatie), Al Marai (Al of chilled and shelf stable seasoning, beef in curry sauce, (PepsiCo), Quaker Avena soy milk combination beverages This is the aggregation of Marai Co), Yogurisimo (Danone). (PepsiCo), Granvita (Productos (eg soy and rice milk blends; spoonable and drinking desserts, chilled snacks, wiener schnitzel, chicken Kiev, coffee whiteners, condensed/ chicken wings in sauce, chicken Vida), Nestum (Cereal Partners). soy and almond milk blends) yoghurt. Note: soy-based Flavoured Yoghurt are excluded and tracked in soy yoghurts are included in the Yoghurts containing artificial evaporated milk, cream, and drumsticks with seasoning, RTE Cereals milk (see above). Prominent relevant category below. or natural fruit flavours, eg fromage frais and quark. turkey with breadcrumb coating, Ready To Eat Cereals are the brands include Rice Dream strawberry, banana, vanilla, duck à l’orange, chicken in aggregation of children’s and (made from rice by the Hain Drinking Yoghurt lemon, peach, chocolate, curry sauce, turkey sausages, family breakfast cereals Celestial Group), Oatly (made Includes dairy based drinking key lime, orange creme, etc. Processed Meat chicken nuggets, etc etc. Children’s Breakfast Cereals from oats by Oatly AB), Alpro yoghurts of all types (full fat, Low fat flavoured yoghurts Please note that basic plucking, Shelf Stable Meat & Poultry Includes breakfast cereals of Almond Milk (Dean Foods Co), low fat, flavoured, fruited, plain, are included. Leading global gutting and/or butchering Meat and poultry sold in all type which are explicitly Silk Pure Almond (White Wave), etc), regardless of flavour (eg, brands include Yoplait (Sodiaal), on its own is not sufficient cans, glass jars or aluminium/ marketed at children and/ Almond Breeze (Blue Diamond). strawberry, banana raspberry, Danone (Danone), Vitalinea/ to be considered processed retort packaging. This includes or adolescents. Packaging etc) are included. Drinking Vitasnella/Taillefine (Danone), according to Euromonitor’s processed plain meat and poultry and advertising is specifically Yoghurt and Sour Milk Products yoghurts explicitly positioned Yogurisimo (Danone), Milkmaid/ definitions. Such products would products such as sausages, pate, developed to target children. This is the aggregation of towards children (and in some La Lechera/La Laitière (Nestlé), be considered unprocessed, etc. Meat or poultry packaged Many products are sweet or yoghurt and sour milk drinks. cases featuring a toy/surprise) Bright (Bright Dairy). and thus wholly excluded

119 Appendices 04

chocolate-based variants of Rice, Pasta and Noodles condiments, and which are ready lasagne, penne rigate, gnocchi, Also exclude those used mainly include Carbonell (Sos Arana family products. Also includes This is the aggregation of rice, to eat after boiling in water for tortellini, fusilli, farfalle, tagliatelle for the extraction of oil (eg Alimentación), Bertolli (Unilever), Kellogg’s Coco Pops Straws. noodles and pasta. Includes: a few minutes. Please note that etc and regional specialities such soybeans) and those leguminous Puget (Unilever), Komili Leading global brands include Pre-packaged noodles. Excludes: pouch instant noodles combined as Spätzle (German speciality crops such as clover and alfalfa, (Unilever), Filippo Berio (SALOV), Kellogg’s Frosties (Kellogg), Any noodles, pasta or rice bought with dehydrated vegetables coming from the south of the which seeds are almost used Carapelli (Carapelli Firenze SpA). Kellogg’s Choco Krispies loose, bulk and/or unpackaged. (eg peas, mushrooms etc) or country). Note that instant dried exclusively for sowing purpose. (Kellogg), Lucky Charms Excludes: Any noodle-based dehydrated sauces are also pasta ready meals (eg Kraft’s This is the aggregation of dry Palm Oil (General Mills), Kellogg’s Froot ready meals, which would be included here. Pouch noodles Macroni & Cheese, Velveeta beans, peas and other pulses. Oils which contains over Loops (Kellogg), Koko Krunch tracked under ready meals. that are “straight to wok” are also Shells & Cheese) are excluded 50% of palm oil. Beans (Cereal Partners), Kellogg’s included here. Leading companies here and tracked under ready Rapeseed Oil Coco Pops (Kellogg). Noodles include Ting Hsin International meals. Leading global brands Include dry beans such as mung APPENDICES This is the aggregation of beans and red beans. Exclude Oils which contains over 50% Group, Nissin Food Products, include Barilla (Barilla), Buitoni of rapeseed oil. This includes Family Breakfast Cereals plain, instant, chilled, frozen Uni-President Enterprises. (Nestlé), De Cecco (De Cecco). crops harvested green food This is the aggregation of flakes, and snack noodles. such as green beans, which are both rapeseed and canola oil. muesli and granola and other Plain Noodles Rice considered to be vegetables. Soy Oil RTE cereals as defined below. Chilled Noodles Noodles are made from flour, Any type of rice found on the Also exclude those used mainly All types of pre-packaged Oils which contains water and/or eggs and can be open shelf in grocery stores. for the extraction of oil (eg over 50% of soy oil. Flakes noodles sold in chiller/ cut into flat, thick or thin strips Includes plain, flavoured, long soybeans). Packaged, processed Flaked breakfast cereals, the refrigerator cabinets, and which Oils which contain at least of various lengths. Flour types grain, brown, Basmati, Thai, etc. beans that are canned, frozen 50% sunflower oil. most widely known being corn typically require refrigeration used include wheat flour, rice Pre-cooked/ready-to-eat rice or chilled are excluded. Beans flakes. Also included are wheat to prevent spoilage. flour, potato flour, buckwheat (eg Haetban) or microwave for non-food consumption but Other Edible Oil flakes, bran flakes etc. Flakes flour, cornstarch and bean, yam rice is also included here. Note: primarily used for beverage This includes vegetable and that come with some other Frozen Noodles All types of pre-packaged or soybean starch. Product types Ready to eat pre-cooked chilled preparation such as coffee beans seed oil such as coconut oil, ingredients (eg brown sugar, include cellophane noodles, rice offered in the ready meals and cocoa beans are excluded. grapeseed oil, groundnut oil, honey, nuts, etc) are also included noodles sold in freezer cabinets, and which typically egg noodles, rice noodles, section, which are often seasoned sesame oil and walnut oil, as well here. Leading global brands Peas require at least refrigeration harusame, ramen, soba. Plain/ and are positioned as ingredients as blended oils which contain include Kellogg’s Corn Flakes, dried noodles are usually to incorporate into ready meal Include dry peas, whether whole less than 50% of any single Kellogg’s Special K (Kellogg’s), – if not continued freezing or split. Chick peas are excluded – to prevent spoilage. soaked in water, and can be recipes, are excluded. Please type of oils broken down into Post (Kraft), Post Selects (Kraft), cooked in a variety of ways note that bulk/loose/unpackaged as they are included in ‘Other the researched oil categories. Kellogg’s Raisin Bran (Kellogg Instant Noodles including stir-frying, steaming, rice is wholly excluded from Pulses’. Packaged, processed Retailing Channels Co), Wheaties (General Mills). This is the aggregation of deep frying, boiling etc. Please Euromonitor coverage. peas that are canned, frozen or chilled are also excluded. instant noodles cups and note that only pre-packaged Convenience Stores Muesli and Granola Shelf Stable Beans instant noodles pouches. plain noodles are included Chained grocery retail outlets A mixture of rolled oats, nuts, and Shelf stable/ambient pulses Other Pulses here. Loose/bulk/unpackaged selling a wide range of dried fruits, usually eaten with Instant Noodle Cups typically sold in cans, glass jars, Includes all other unpackaged offerings are wholly excluded. groceries and fitting several of milk or yoghurt. Crispy muesli Dehydrated noodles that come aluminium/retort packaging. and unprocessed pulses such are also included. Mixtures of as chick peas, cow peas, lentils, the following characteristics: pre-packaged in a cup or bowl, Pasta Product types include: baked Extended opening hours oats & cereal cluster products often accompanied by sachets This is the aggregation of beans, flageolet beans, kidney etc. Packaged, processed Selling area of less than 400 sq are also included. Leading global of dehydrated seasoning or dried and chilled pasta. beans, chick peas, lentils, broad pulses that are canned, frozen metres Located in residential brands include Kellogg’s Mueslix condiments, and which are beans etc. Note that beans or chilled are excluded. neighbourhoods Handling two (Kellogg), Alpen (Weetabix), ready to eat after the addition Chilled Pasta canned with sausages or other or more of the following product Quaker 100% Natural (PepsiCo), of boiling water. Please note All pre-packaged pasta - types of meat are excluded from categories: audio-visual goods Vitalis (Oetker-Gruppe), Jordans that cups/bowl instant noodles including spaghetti, lasagne, here and tracked under “shelf Edible Oils (for sale or rent), foodservice (W Jordan Cereals Ltd). combined with dehydrated penne rigate, gnocchi, tortellini, stable ready meals”. Leading Edible Oils (prepared take-away, made- vegetables (eg peas, mushrooms fusilli, farfalle, tagliatelle, etc global players include Heinz, Bush Other RTE Cereals This is the aggregation of olive to-order, and hot foods), etc) or dehydrated sauces are - which is freshly prepared Bros, ConAgra, Goya, Bonduelle. All non-flake or non-muesli oil and packaged liquid/fluid also included here. Leading and stored in a store’s newspapers or magazines, cut or granola cereals targeted at cooking oils made of seeds/ companies include Nissin Food chiller/refrigerator cabinets. Pulses flowers or pot plants, greetings adults. Includes wheat biscuits, fruits other than olives. Products, Toyo Suisan Kaisha, Leading global brands This category is limited to cards, automotive accessories. puffed wheat cereals, rice include Rana (Pastificio Rana leguminous crops harvested Sales data excludes foodservice Ting Hsin International Group. Olive Oil based products etc. Leading SpA), Buitoni (Nestlé). only for dry grains, excluding sales. Example brands include All varieties of packaged global brands include Cheerios Instant Noodle Pouches crops harvested green for 7-Eleven, Spar. Note: The number fluid/liquid olive oil, including (General Mills), Kellogg’s Mini Dehydrated noodles that come Dried Pasta food (green peas, green bean, of branches required to be virgin, extra virgin, “green” Wheats (Kellogg’s), Kellogg’s pre-packaged in a pouch, Any type of pre-packaged dried string beans etc), which are termed chained varies from olive oil etc. Olive oil residue is All Bran (Kellogg), Weetabix often accompanied by sachets pasta found on the open shelf in considered to be vegetables. country to country but is usually excluded. Leading global brands (Weetabix), Life (PepsiCo Inc). of dehydrated seasoning or retail stores. Includes spaghetti, ten or more. If a multinational is

121 Appendices 05

operating in the country, then this cards, automotive accessories. Traditional Grocery Retailers motor vehicles, motorcycles is given by a direct seller to a Vending is included, even if there are fewer Sales data excludes petrol (gas) Traditional grocery retailing and vehicle parts; (c) Tickets for customer) or -party-plan basis Vending means automatic than ten outlets under the brand. and foodservice sales. Example is the aggregation of those events (sports, music concerts (selling through explanation and retailing. It covers the sale brands include BP Connect, Shell channels that are invariably etc) and travel; (d) Sales of demonstration of products to a of products and services at Discounters Select. Forecourt retailers is an non-chained and are, therefore, tavel and holiday packages; (e) group of prospective customers an unattended point of sale Discounters are retail outlets aggregation of Chained forecourt owned by families and/or run Revenue generated by online by a direct seller usually in through a machine operated by typically with a selling space and Independent forecourt. on an individual basis. For gambling sites; (f) Quick delivery the home of a host(ess) who introducing coins, bank notes, of between 400 and 2,500 Euromonitor traditional grocery services of food, magazines, invites other persons for this payment cards, tokens or other square metres. Retailers’ primary Hypermarkets retailing is the aggregation of household goods and DVD purpose). The prime example of means of cashless payment. focus is on selling private label Hypermarkets are retail outlets three channels: Independent rentals, for example: MaxDelivery. a one-to-one method is Avon. Sales figures cover vended products within a limited range with a selling space of over Small Grocers, Food/Drink/ com, LicketyShip.com, Netflix. Tupperware is famous for its products only, ie food, drink and APPENDICES of food/beverages/tobacco 2,500 square metres and with a Tobacco Specialists and Other com, LoveFilm (g) Returned party-plan method. Direct selling other consumable goods such and other groceries at budget primary focus on selling food/ Grocery Retailers. While there products/unpaid invoices. (h) of services - such as insurance, as vended tobacco, sanitary prices. Discounters may also beverages/tobacco and other can be modern (i.e. chained) click and collect orders in stores telecoms, other utilities, financial products and condoms. Services sell a selection of non-groceries, groceries. Hypermarkets also food/drink/tobacco specialists where the payment is made services - are excluded. such as the public telephone, frequently as short-term special sell a range of non-grocery or other grocery retailers, due in the store. Example brands laundrette facilities, travel tickets, offers. Discounters can be merchandise. Hypermarkets are to the store’s presence in the include Amazon.com, Zappos. Homeshopping stamps, passport photographs, classified as hard discounters frequently located on out-of- channel, these stores are still com, Apple.com, iTunes, Rakuten, Homeshopping is the sale domestic energy supplies and and soft discounters. Hard town sites or as the anchor store considered as traditional for Tesco.com, Dell.com, Coles of consumer goods to the business card creation are discounter: first introduced by in a shopping centre. Example Euromonitor International. Online, Americanas 3rd Party general public via mail order excluded. Coverage includes Aldi in Germany, and also known brands include Carrefour, Merchant sales through online catalogues, TV shopping and vending systems installed as limited-line discounters. Retail Tesco Extra, Géant, E Leclerc, Internet Retailing marketplaces, such as Amazon. direct mail. Consumers purchase in public and semi-captive outlets, typically of 300-900 Intermarché, Auchan. Excludes Sales of consumer goods to the com, eBay.com and Walmart. goods in direct response to an environments only. Hotels, square metres, stocking fewer cash and carry, warehouse general public via the Internet. com, are included and split out in advertisement or promotion transport networks, recreational than 1,000 product lines, largely clubs and mass merchandisers. Please note that this includes shares. 3rd party merchants are through a mail item, printed centres, shopping centres/ in packaged groceries. Goods For the Hypermarket channel sales through mobile phones the summation of sales that come catalogue, TV shopping malls are included. Factories, are mainly private-label or Euromonitor also provides and tablets. Internet retailing from businesses that are present programme, or Internet catalogue offices, hospitals, prisons, budget brands. Soft discounter: a breakdown of value sales includes sales generated through on an online marketplace (e.g. whereby the order is placed and schools and other captive usually slightly larger than hard between Grocery and pure e-commerce web sites Amazon, Alibaba). Marketplaces payment is made by phone, by environments are excluded discounters, and also known as Non-Grocery products. and through sites operated by are websites that allow multiple post or through other media extended-range discounters. store-based retailers. Sales data merchants to sell on the such as digital TV. Excludes Foodservice channels Retail outlets typically stocking Supermarkets is attributed to the country sales on returned products/ Retail outlets selling groceries marketplace website and the Consumer Foodservice 1,000-4,000 product lines. As where the consumer is based, marketplace operator processes unpaid invoices. Excludes sales well as private-label and budget with a selling space of between rather than where the retailer ordered and paid online which Consumer foodservice is 400 and 2,500 square the transaction, however many composed of cafés/bars, brands, stores commonly carry is based. Also includes orders provide other services as to help are instead included within leading brands at discounted metres. Excludes discounters, placed through the web for which Internet retailing. Example brands full-service restaurants, fast convenience stores and with shipping, handling, payment, food, 100% home delivery/ prices. Discounters excludes mass payment is then made through and product storage. The include Otto, Neckermann, QVC. merchandisers and warehouse independent grocery stores. a storecard, an online credit takeaway, self-service cafeterias Example brands include marketplace is not the merchant Non-Grocery Specialists and street stalls/kiosks. clubs. Example brands include account subsequent to delivery of record legally, but for the sake Aldi, Lidl, Plus, Penny, Netto. Champion, Tesco, Casino. or on delivery of the product. This Retail outlets selling Exception: In some markets, of shares, sales from 3rd part predominantly non-grocery Cafés/Bars payment may be by any mode This category encompasses all Forecourt Retailers primarily the US, Australia and merchants are attributed to the consumer goods. Excludes of payment including postal marketplace brand operator. establishments where the focus Grocery retail outlets selling a Hong Kong, there are grocery cheque, direct debit, standing retailers selling predominantly wide range of groceries from a retailer brands that operate food, beverages and tobacco, is on drinking (either alcoholic or order or other banking tools. Others including the non-alcoholic beverages). While gas/petrol station forecourt and outlets with a selling space of following four categories as well as fuel, automotives and Includes orders paid for cash on a wide variety of snacks and fitting several of the following over 2,500 square metres, but Direct selling parts. Non-grocery retailers is delivery. Includes m-commerce: full meals are offered, it is not characteristics: Extended opening offer only a very limited range of Direct selling is the marketing the aggregation of: • Apparel where consumers use smart uncommon for consumers to only hours Selling area of less than non-grocery merchandise or none of consumer goods directly to and footwear specialist retailers phones or tablets to connect to order a drink. As a general rule, 400 sq metres Handling two or at all. These brands are included consumers, generally in their • Electronics and appliance Internet and purchase the goods establishments deriving 50% of more of the following product in Supermarkets. Examples homes or the homes of others, specialist retailers • Health & online. Internet retailing excludes their income or more from the categories: audio-visual goods include: Coles, Woolworths, Park at their workplace and other beauty specialist retailers • sales of: (a) Products generated sale of drinks are included here. (for sale or rent), foodservice ‘n Shop. For the Supermarket over consumer-to-consumer places away from permanent Home and garden specialist (prepared take-away, made- channel Euromonitor also sales sites, such as eBay. B2C retail locations. Direct selling retailers • Leisure and personal to-order, and hot foods), provides a breakdown of proportion of sites such as eBay occurs in two primary ways: -one- goods specialist retailers • newspapers or magazines, cut value sales between Grocery will be captured. (b) Sales of to-one basis (usually by prior Other non-grocery retailers flowers or pot plants, greetings and Non-Grocery products. arrangement a demonstration

123 Appendices 06 Sources

Full-Service Restaurants operate under a uniform fascia charge, customers are either Agriledger.com FastCasual.com ReferralCandy.com FSR (full-service restaurants) and corporate identity. • Take charged a flat rate for admission Agweb.com Fastcompany.com Reuters.com encompasses all sit-down out is generally present, as is (as in a buffet) or pay at the establishments where the focus is drive-through in some markets check-out for each item. Some Alizila.com Foodbev.com RSPO.org on food rather than on drink. FSR cafeterias also charge by weight. AltMeatCo.com Forbes.com SeekingAlpha.com is characterized by table service 100% Home Delivery/Takeaway Self-service cafeterias resemble Fixed units which provide no and a relatively higher quality of contract catering self-service ArlaFoods.co.uk Forest Heroes Silicon.Fr food compared to quick-service facilities for consumption on the cafeterias such as canteens, Bakingbusiness.com FruitNet.com SnackandBakery.com units. Menus offer multiple premises. Food can either be dining halls and cafeterias located picked up by the consumer, or selections and may include within institutions such as a Barilla Alimentare SpA Goodfood.com.au Snapscan.co.za SOURCES breakfast, lunch and dinner. delivered, often for an additional large office building, school and BBC.co.uk GrainCorp StraitTimes.com Preparation of food products charge. Common offerings universities. However, fully captive include: pizzas, Chinese, Indian, is often complex and involves contract self-service cafeterias BeverageDaily.com Habit.com StrategiesLogistique.com multiple steps. NOTE: restaurants Mexican, Middle Eastern, West are excluded from consumer types catalogued in this segment Indian, North African, and foodservice. Unlike fast food, Bloomberg Ico.org Sweetgreen.com other local national offerings. refer to table-service only self-service cafeterias feature Bloomberg.com ImpossibleFoods.com The Ecologist (outlets with a proper “full table Companies offering a mixture a menu comprising full, regular service:” wait staff attending of table and delivery service meals, often with a large choice BMIResearch.com Inc.com TheFarmersDaughterUSA.com are excluded and fall under the customers and taking orders at of first course, main course BrandChannel.com InsideRetail.asia TheGuardian.com the tables). Outlets with “limited FSR sector.100% Home Delivery/ and desserts. As cafeterias can table service” are excluded from Takeaway outlets differ from effectively serve large number BritishBakery.co.cuk IRRI.org UK.Reuters.com street stalls/kiosks in that outlets FSR. For example: outlets where of customers with comparatively Bruutea.co.uk JumpDigital.ph UKBusinessInsider.com customers order their food at tend to be more permanent, few employees, they are often the counter are excluded (even often with more elaborate on- found within larger complexes, Bunge/FDA KelloggCompany.com Uni-President.com.tw site cooking facilities, including though the waiter will then for example, department BusinessInSociety.eu Kotaku.com.au UrbanTasteBud.com bring the food at the table). ovens. Menus tend to be larger stores, shopping malls, travel and more meal-based, with street foodservice (motorways stations, Cargill.com MarketResearch.com USdairy.com Fast Food vendors more often specialising railway stations, airports). CCFGroup.com Mars Food UK VCCircle.com Fast food outlets offer limited in snacks or a particular dish Self-service cafeteria examples menus that are prepared quickly. Cips.org Mars.com Wilmar International Self-Service Cafeterias include: Ciao (Autogrill), Flunch Customers order, pay and pick (Agapes Restauration SA), up their order from a counter. Self-service cafeterias are outlets Coca-ColaCompany.com MercuryNews.com WorldGrain.com where there is no (or limited) IKEA (Inter Ikea Systems BV) Outlets tend to specialize in one Coles MidwestDairy.com WorldofTea.org service content. Rather than table or two main entrees such as Street Stalls/Kiosks hamburgers, pizza, ice cream, service, there are food-serving Small, sometimes mobile, Deloitte Monini SpA counters/stalls where customers or chicken, but they usually also foodservice providers Deloitte.com MorganStanley.com provide salads, drinks, dessert take the food they require as characterised by a limited etc. Food preparation is generally they walk along, placing it on a product offering and by low Deoleo.com MyloTrade.com tray. In addition, there are often simple and involves one or prices. Includes street stalls, Ebro Foods Nation.co.ke two steps, allowing for kitchen stations where customers order street hawkers and foodservice staffs generally consisting of food and wait while it is prepared, kiosks where food is prepared in ec.europa.eu No references in doc particularly for items such as younger, unskilled workers. Other some way and served through a Eco-business.com Omprompt.com key characteristics include: • hamburgers or tacos which hatch or over a display counter A standardised and restricted must be served hot and can to take away. Also includes kiosks Edie.net Original Serial section be prepared quickly. For some menu; • Food for immediate and carts located externally or EMI Euromonitor International Panzani SAS consumption; • Tight individual food and drink items, customers internally eg in shopping malls portion control on all ingredients collect an empty container, pay etc. As a rule, street stalls/ Euromonitor International Passport at the check-out, and fill the and on the finished product; • kiosks outlets tend to be smaller Euromonitor International/Only Princes Group Individual packaging of each container after check-out. Free than 100% home delivery/ item; • Counter service; • A second servings are often allowed takeaway outlets, while menus Euromonitor Opinion PrNewswire.com seating area, or close access to under this system. For legal are more limited, often (though FAO Quinoa Corp a shared seating area, such as in purposes (and the consumption certainly not always) with a a shopping centre food court • patterns of customers), this greater emphasis on snack FAO Rabobank.com For chained fast food, chained system is rarely or never used for items, rather than full meals. Farms.com Rabobank.com.au and franchised operations which alcoholic beverages. Self-service cafeterias do not have a cover

125 Notes Notes