BMI's Executive Summary

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Major investment continues to flow into Poland's food and drink sector. Although the country's food retail sector has attracted a great deal of international interest in the past, in recent months it has been the country's food and drink industry that has been catching the eye of multinational operators. In August Anglo-South African brewer SABMiller's Polish subsidiary Kompania Piwowarska reached an agreement to purchase Browar Belgia from Belgian brewer Palm Breweries for EUR65mn (US$89mn). Browar Belgia operates a brewery in Kielce located in the south-east of the country, and its main brands are Wojak, Gingers and Frater. The facility has an annual production capacity of over 1mn hectolitres. In 2006 SABMiller said that it planned on investing US$100mn in all three of its Piwowarska's breweries in Poland. 'We are optimistic about our future growth prospects and Browar Belgia provides us with expansion capacity without the need to develop a Greenfield site,' Piwowarska's Managing Director Mark Bowman was quoted as saying.

Beer is the market leader in Poland's alcoholic drinks sector, having experienced consistent growth over the past few years. This is set to continue, with premium beers becoming a key battleground among producers. Unlike in neighbouring markets, the Polish beer market is still growing in value terms and the premium segment is still developing, despite the control of an overwhelming market share by three foreign producers. Apart from this announcement by SABMiller, Heineken Zywiec also announced its plans to increase its production capacity by the end of the first quarter of 2008. The company has said that it will invest EUR15mn (US$21.6mn) to increase its production from the current 12.5mn hectolitres, to 14mn hectolitres. Such investments are on the back of strong results, with Heineken's Polish unit reporting a 19% rise in consolidated net sales for the first half of this year, as sales reached PLN1.7bn (US$676mn), while volumes reached 579mn hectolitres.

Then in October 2007 rumours began circulating that UK confectionery giant Cadbury Schweppes was considering investing EUR270mn (US$381.5mn) in production facilities in Poland. Cadbury has confirmed that it will close its two UK production facilities, and that the majority of this production will be switched over to Wedel, Cadbury's Polish subsidiary, which it acquired in 1998. 'In order to continue to grow and remain competitive in the future we need to operate more effectively and reduce costs,' Cadbury wrote in a statement. Two years ago Cadbury announced a EUR100mn investment to build a chewing gum factory in Skarbimierz, which was one of the biggest investments in Poland's food industry. The company at this time also mentioned the possibility of further investments. The Polish food industry has attracted significant foreign investment over recent years, which peaked during the run-up to European Union (EU) accession in 2004. International interest in the industry stems from the country's large market, export opportunities to other Central and Eastern European (CEE) countries and comparatively low-paid workforce, something these above-mentioned companies are clearly keeping in mind with these expansions.

Contents

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Chapter 1 – Business Environment

Table: Central And Eastern Europe Business Environment Rankings

SWOT Analysis

Poland Food & Drink Industry SWOT

Poland Political SWOT

Poland Economic SWOT

Poland Business Environment SWOT

Macroeconomic Outlook

Table: GDP, Output & Population

Chapter 2 – Retail

Plenty Of Potential For Private Labels In CEE

Table: PL Market Share Within Overall Food And Drink Retail Sales, 2006, Selected CEE Countries

Table: Leading CEE Retailers By PL Market Share

Industry Forecast Scenario

Table: Poland MGR Value Sales By Format – Historical Data & Forecasts

Industry Developments

Market Overview – Poland

Table: Structure Of The MGR Market By Number Of Outlets

Table: Structure Of The MGR Market By Value (US$bn)

Table: Value Of Sales Per Outlet, 2005

Chapter 3 – Food & Drink

CEE Food Focus: Fittest Fight For Future Of CEE Dairy Market

Table: EU Allocation Of Milk Quotas To 2004 Accession Countries In The CEE (1,000 Tonnes)

Industry Forecast Scenario

Table: Poland Food Consumption Indicators – Historical Data & Forecasts

Food

Drinks

Table: Poland Beverage Sectors Value/Volume Sales – Historical Data & Forecasts

Industry Developments

Company Developments

Market Overview – Poland

Table: Poland Agricultural Sub-sector Production – Historical Data, Volume (tonnes)

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 Poland’s MGR Sector – 2005

Table: Key Players – Poland's Food & Drink Sector 2005

Regional Company Case Studies

Mercator – CEE Case Study

Financial Highlights

Table: Mercator’s Financial Highlights

The Only Way Is Up…

Current Position

Table: Mercator’s Market Share Growth To 2005

Covering All The Bases

The Importance Of Private Label

Future Position And Growth Strategies

Table: Projected Growth In Market Share, According To Company Strategy, 2005-2010

Group Diageo – CEE Case Study

Table: Brand Performance – Europe, Year Ending June 30 2006

Table: Diageo: Distribution In The CEE

Groupe Danone – CEE Case Study

Groupe Danone – The CEE Figures

Table: Key Figures By Business Line

Table: Key Figures Over Five Years, Fresh Dairy Products (EURmn)

Metro – CEE Case Study

Table: Metro’s Presence In CEE

Table: Development Of Group Sales And Divisional Sales As Well As Regional Sales

Company Analysis

Metro Poland

Auchan Polska

Nestlé Polska SA

Hochland Polska Sp zoo

Star Foods SA

Biedronka (Jerónimo Martins)

Central European Distribution Corporation (CEDC)

Carlsberg Polska 7

BMI Forecast Modelling

How We Generate Our Industry Forecasts

Retail Industry

Sources

Competitive Landscape for Europe 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 European Food Sources

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BMI's European 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: