BMI's Executive Summary

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One food production sector that has over recent years benefited from the recovering Brazilian economy and rising disposable incomes, at least in some parts of the country, is the ice cream sector. According to data published by the Association of Brazilian Ice Cream Processors (ABIS), per-capita ice cream consumption reached 2.71 litres in 2006, with total sales of US$1.3bn, a y-o-y increase of 25%, and overall sales of 507mn litres. These figures do, however, exclude the large informal ice cream sector. According to ABIS the sector consists of around 10,000 predominantly small and medium-sized companies. Multinationals, including Nestlé and Unilever have, however, over recent years strengthened their presence in the market, partly through the acquisition of local operators. Today, they are the sector leaders and, together, are estimated to account for close to 70% of sales. Ranked third is General Mills, which markets the premium Haagen-Dazs brand, followed by La Basque Alimentos Ltda, and Sadia SA. Smaller producers are aiming to achieve greater penetration in the premium segment in order to further increase sales and gain market share.

While sales have been growing strongly over recent years, domestic production has increased only slowly, with imported brands having significantly gained in importance. Their consumption does, however, remain largely restricted to wealthier Brazilian consumers as they are priced at a significant premium compared to local brands. According to information published by the Foreign Trade Secretariat (SECEX), the majority of imports, around 44%, come from France, followed by Chile and the US, with shares of around 24% and 14% respectively. The sector also features a large number of low cost informal producers, whose market share is estimated as high as 60% by ABIA.

Around 70% of production is sold between September and February, with chocolate, strawberry, vanilla, neapolitan, grape, coconut, lemon, pineapple, cream and chocolate chip the most popular flavours according to ABIS. The Association furthermore states that Brazilian consumers currently consider ice cream to be a snack and reward, rather than a food product, and ABIS aims to change this perception, stressing the product's nutritious benefits, to further increase sales. In order to improve quality standards, the ISO 22000/2006 seal was implemented. The majority of ice cream, around 80% of total sales, is sold in the south and southeast of the country, where consumers tend to be more affluent.

Similar to other processed food sectors, the ice cream sector is expected to continue its strong growth over coming years, with an increasing number of Brazilian consumers able to afford more up-market brands, should the economy continue to perform well.

Contents

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Chapter 1 – Business Environment

Retail Business Environment Rankings

Table: Latin America Business Environment Rankings

SWOTs

Brazil Food & Drink Industry SWOT

Macroeconomic Outlook

Table: Economic Activity – Historical Data And Forecasts

Chapter 2 – Retail

Regional Overview

Trending Towards Hypermarkets In Latin America

Rise Of Hypermarkets

Table: Number Of Supermarkets/Hypermarkets, 2005

Table: Top Five Mergers & Acquisitions In The Latin American Retail Sector, 2005

Share of MGR Sales In Total Sales

Industry Forecast Scenario

Table: Brazil MGR Value Sales by Format – Historical Data & Forecasts

Industry Developments

Company Developments

Market Overview

Table: Structure Of Brazil’s MGR Market By Number Of Outlets ('000s)

Table: Brazil MGR Value Sales By Format

Chapter 3 – Food & Drink

Regional Overview

The Growing Market For Wine Sales And Production In Latin America

Table: Per-Capita Consumption Of Wine (litres)

Table: Wine Production Estimates By Country 2005

Industry Forecast Scenario

Table: Brazil Food & Drink Indicators

Industry Developments

Company Developments

Market Overview

Table: Brazil Agricultural Sub-Sector Production – Historical Data

Chapter 4 – Tobacco

Industry Forecast Scenario

Table: Cigarette Value/Volume Sales – Historical Data & Forecasts

Industry Developments

Company Developments

Market Overview

Chapter 5 – Competitive Landscape

Key Players

Table: Key Players In Brazil’s MGR Sector

Table: Key Players In Brazil’s MGR Sector (Cont)

Table: Key Players In Brazil's Food & Drink Sector

Latin America Regional Company Case Studies

Company Case Study – Organization Soriana

Table: Organizacion Soriana: Stores By Format, June 2006

Table: Organizacion Soriana, S.A. – Income Statement, January-June 2005 & 2006

Table: Organizacion Soriana: New Store Openings, April-June 2006

Table: Market Shares Of The Four Largest MGRs In Mexico, 2005

Company Case Study – SABMiller

Table: Top Five M&As In Latin America In 2005

Table: SABMiller In Colombia, As At June 2006

Table: SABMiller In Peru, As At June 2006

Wal-Mart In Latin America

Table: Wal-Mart Latin America Regional Operations

Table: Wal-Mart de Mexico (Walmex)

Table: Wal-Mart Brazil

Nestlé In Latin America

Table: Nestlé Operations In Latin America

Company Analysis

Grupo Avipal

Perdigão

Sadia S.A.

Embotelladora Andina S.A.

Companhia Brasileira de Distribuicao (CBD)

Wal-Mart

AmBev

BMI Forecast Modelling

How We Generate Our Industry Forecasts

Retail Industry

Sources

Competitive Landscape for Latin America Food & Drink Reports: Sample of  
Companies Ranked

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At-a-glance perspective on the strengths, weaknesses, opportunities and threats facing each market’s food & drink industry. BMI also provides similar economic and business environment studies. Company SWOTs (Strengths, Weaknesses, Opportunities, Threats) covering all leading food and drink companies operating in each market, including competitive intelligence on geographic presence and competitive positioning of multinationals against local companies; leading products, services and brands; sales and local market share; foreign direct investment, projects, partners and acquisition strategy. Illustration of the industry via rankings tables comparing revenues, number of outlets, number of employees and registration dates. BMI analyses each company’s performance, market position, strategy and investment potential.

Network of Latin American Food Sources

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BMI's Latin American Food Reports are based on an extensive network of multilateral organisations, government departments, food industry associations, chambers of commerce and company reports. Information sources include: