BMI's Executive Summary

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Food exports account for a significant share of Chile's total exports – estimated at 22% in 2006, making it the country's second-largest export sector – and the sector has gone from strength to strength over recent years.

Its strong position is based on Chile's rich natural resources and its diversity of environmental and climatic conditions. Consequently a variety of sectors, including annual crops, cattle ranching, dairy farming, vegetable production and organic farming, contribute to the strong food export position. In terms of product types, fresh fruits account for around 25% of food exports, followed by cultivated salmon (23%), processed foods (15%), other sea food (12%), wine (12%), meat (7%) and other food products (8%). According to the Food and Agricultural Organisation of the United Nations (FAO), Chile's food exports have increased at an average annual rate of 10% over the last decade, making it one of the fastestgrowing food exporting countries world-wide.

Favourable environmental and climatic conditions are, however, not the only reason for Chile's strong position. The country also benefits from a growing and comparatively stable economy and a strong commitment to free trade. Thus a large number of free trade agreements (FTAs), as well as Chile's unilateral liberalisation of its trade tariffs, are facilitating export sales. The country has a flat tariff of 6% without discrimination but, as a consequence of the FTAs in place, the effective average trade tariff is just 1.5%.

Free trade agreements are in place with Bolivia, Brunei, Canada, Central America, China, Colombia, Cuba, Ecuador, the European Free Trade Association (EFTA), the European Union (EU), the Southern Common Market (MERCOSUR), India, Japan, Mexico, New Zealand, Panama, Peru, Singapore, South Korea, the US, and Venezuela. The FTA with the US was established in 2004 and has led to a 150% increase in bilateral trade between the two countries during the first three years of the agreement. Last, but not least, Chile's highly-developed food processing industry also is a strong contributor to the country's strong position where food exports are concerned. The industry, in 2006, represented around 25% of GDP, with the strongest sectors having been fruits, salmon, wines, processed foods, meats and other marine products.

The sector employs more than 1mn people, which represents around 20% of Chile's economically active population. By 2030, the food processing sector is forecast to account for around 35% of Chile's GDP, and food exports are thus set to growth further, providing a bright outlook for the industry.

Contents

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Chapter 1 – Business Environment

Retail Business Environment Rankings

Economics – Long-term Risk

Politics – Long-term Risk

Mass Grocery Retail Sales Growth

Barriers To Entry

Per-Capita Consumption

Table: Latin America Business Environment Rankings

SWOTs

Chile Food & Drink Industry SWOT

Macroeconomic Outlook

Table: Chile – Economic Activity

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: Chile MGR Value Sales by Format – Historical Data & Forecasts

Industry Developments

Company Developments

Market Overview

Table: Structure of Chile’s MGR Market By Number Of Outlets

Table: Chile MGR Value Sales by Format – Historical Data

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: Food & Drink Indicators – Historical Data & Forecasts

Industry Developments

Company Developments

Market Overview

Table: Chile 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 Chile’s MGR Sector

Table: Key Players In Chile’s Food And Drink Sector

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 Mass Grocery Retailers 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

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 In Latin America

Company Analysis

Empresas Carozzi

Concha y Toro

Embotelladora Andina SA

Distribucion y Servicio (D&S)

Cencosud SA

Nestlé Chile SA

Soprole

Compania Cervecerias Unidas (CCU)

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: