November 4, 2008

This Q4 2008 India Food Drink Report Provides Independent Forecasts and Competitive Intelligence on the Industry

Research and Markets ( has announced the addition of the "India Food and Drink Report Q4 2008" report to their offering.

This India Food Drink Report provides independent forecasts and competitive intelligence on India's food and drink industry.

The potential of the Indian food and drinks market is being recognised by a number of foreign players. The past few months have witnessed numerous acquisition and expansion deals in India, with the August 2008 opening of the first chocolate academy in India by Swiss confectioner Barry Callebaut extending the company's Asian presence to five markets. We would expect the academy to be complemented by a local manufacturing facility before long, as Callebaut aims to take advantage of the tendency to buy more premium products in increasingly rich urban areas. Nevertheless, the Swiss company will be facing increased competition, as the local unit of South Korean confectionery giant Lotte Group recently revealed plans to establish a subsidiary in India.

Similarly, Belgian brewing giant InBev announced further expansion activity in India as it looks to enlarge its Asia Pacific footprint. This development has the potential to usurp the balance in the beer market, which is currently dominated by two players, namely South African SABMiller and local United Breweries Ltd (UBL), part of the beverages giant UB Group. InBev, through the recently acquired US brewing giant Anheuser-Busch (A-B), now also owns A-B's Indian subsidiary Crown Beers India. AB's popular, but premium-priced Budweiser brand is expected to be rolled out in affluent urban centres beyond southern and western India, in response to premiumisation.

In the meantime, local companies are announcing strong financial results. For example, India's leading local dairy producer Gujarat Cooperative Milk Marketing Federation (more commonly known as Amul) posted a third consecutive year of strong double-digit sales growth. Soaring domestic demand, on the back of sustained economic growth, was quoted as the principle driver of success, especially in the value-added segments of flavoured milk drinks, cheese spreads and processed cheeses. Similarly, India's largest fast-moving consumer goods (FMCG) manufacturer, Hindustan Unilever Limited (HUL) reported Q108 growth over 19%. However, in the coming months, all companies will continue to face challenges epitomised by spiraling raw material costs and the difficulty of passing these costs on to consumers, whose inherent price sensitivity has been exacerbated by rising inflation.

Consequently, domestic players are increasingly seeking to become all-round specialists, being involved in all aspects of food production and distribution, from agriculture to retail. To this end, local conglomerate Reliance Industries Ltd invested US1.25bn into a dairy project. Reliance's main focus of late has been India's mass grocery retail (MGR) sector, although investment in supply chain infrastructure has been integral to its retail growth plans. In August 2008, Reliance Industries was reportedly considering a partnership with UK-based supply chain solutions provider Wincanton, in an effort to address the current inefficiencies being experienced by its fledgling retail network. Reliance is aiming to take advantage of the massive, report-forecast, 443% increase in MGR sales in the 2007-2012 period, which has most recently attracted UK retail giant Tesco, in partnership with local conglomerate Tata Group.

Key Topics Covered:

- Executive Summary

- Food And Drink

- Food

- Drink

- Agriculture At A Glance

- Retail

- Competitive Landscape

- Deep US Recession Scenario

- Appendix

Companies Mentioned:

- Hindustan Unilever Limited (HUL)

- United Breweries Limited (UBL)

- Coca-Cola India

- Mass Grocery Retail

- Pantaloon Retail India

- RPG Retail

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