Czech Republic Food & Drink Report Q4 2013 - New Market Study Published

From: Fast Market Research, Inc.
Published: Fri Aug 23 2013

The Czech consumer continues to face considerable challenges as the economy struggles to generate positive growth and ward off persistent economic contraction. Fiscal austerity and unemployment are placing downwards pressure on private consumption and household spending, inevitably impacting consumer confidence. This has important ramifications for the country's food and drink sector, with subdued spending power a considerable threat to sustainable growth in coming quarters. However, despite a discouraging start to 2013, we remain positive that the country will achieve a modest turnaround by the end of the year. Despite the Czech consumer outlook continuing to face a catalogue of challenges as it pursues economic stability, we maintain our view that a rebound is still likely by the end of the year. With tentative signs of consumer confidence picking up, we expect an anticipated relaxation in government austerity measures and improving unemployment to ease pressure on the consumer sector. Given the maturity of the country's food and drink industry, a confident consumer base is vital in securing the premiumisation that will sustain momentum of the sector.

Full Report Details at

Headline Industry Data

* 2013 per capita food consumption (local currency terms) = 0.8%; compound annual growth rate (CAGR) to 2017 = +1.9%
* 2013 beer volume sales = -0.1%; CAGR to 2017 = +0.04%
* 2013 confectionery volume sales = +2.6%; CAGR to 2017 = +3.3%
* 2013 mass grocery retail sales (local currency terms) = 3.1%; CAGR to 2017 = +6%

Key Company Trends

Agrofert Acquires Lieken from Barilla: In February 2013, Czech group Agrofert Holding entered into an agreement with Italian food company Barilla to acquire its interests in German bakery group Lieken. Agrofert is a diversified chemicals, agriculture and food group with strong positions in Central and Eastern Europe. Agrofert already has a sizeable presence in the bakery business in the Czech Republic, Slovakia and Hungary, and this acquisition will allow Agrofert to enter the German market. In April, Agrofert said that once the deal is approved by the EU, it plans to use Lieken to launch its own product ranges, including ham, milk and butter, in the German market.

Hame Reports Strong Increase in Sales: In February 2013, Hame, the largest canned food group in the Czech Republic, reported that its 2012 sales increased by 10.5% year-on-year (y-o-y) to CZK5.8bn. While sales in its home market were weak, dropping by 5% y-o-y, sales of its foreign subsidiaries performed well. Hame Group has production facilities in seven factories in the Czech Republic, as well as one factory in Russia and one in Romania. The Czech factories accounted for 48% of group sales in 2012, with the group manufacturing more than 90,000 tonnes of food in 2012.

Key Risks To Outlook

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