New Market Research Report: Spain Food & Drink Report Q4 2014

From: Fast Market Research, Inc.
Published: Fri Nov 21 2014

We believe Spain's government will relax austerity as the 2015 parliamentary elections approach (see 'Reform Momentum On Hold Until, March 27), damaging perceptions of sovereign credit risk. This view appears to playing out, with the government recently agreeing to cut income taxes by an average of 12.5% by 2016, and corporate taxes from 30% to 25%. This could help relieve constrains over households' purse strings but our view remains that deleveraging still has some way to run, meaning that consumer spending (and demand-pull price pressures) is likely to remain subdued for some time to come. This means more sluggish growth for the food and drink sector, while the lower end of the sector will continue to outperform the rest. In line with this, we believe that Dia is one of a select few Western Europe-based food retailers with good near-term growth prospects in the region.

Headline Industry Data (local currency)

Full Report Details at

* 2014 per capita food consumption = +1.9%; forecast compound annual growth rate (CAGR) to 2018 = +2.0%.
* 2014 alcoholic drink value sales = +0.8%; forecast CAGR to 2018 = +1.5%.
* 2014 soft drink value sales = +0%; forecast CAGR to 2018 = +1.9%.
* 2014 mass grocery retail sales = +1.8%; forecast CAGR to 2018 = +2.5%.

Key Company Trends & Developments

Strong Export Potential For Deoleo Under Private Equity Backing: We believe the final offer made by British private equity fund CVC Capital Partners for Spanish olive oil producer Deoleo reflects the private equity industry's renewed interest in acquiring cheap food assets with strong potential. Deoleo encountered problems in 2009 after years of debt-fuelled acquisitions. Pressured by creditors, the food company eventually sold its cookie and rice businesses to pay down some of its debt and refocused on olive oil. It also cut its workforce and has taken other steps to improve profit margins, such as selling less oil in bulk and increasing sales of higher-margin branded bottles....

The Spain Food & Drink Report features Business Monitor International (BMI)'s market assessment and independent forecasts for food and drink expenditure, consumption, sales, and imports/exports and forecasts for the mass grocery retail sector. The report also includes analyses of major regulatory developments, the background macroeconomic outlook and competitive landscape comparing national and multinational companies by leading products and services, sales, investments, partners and expansion strategies.

BMI's Spain Food & Drink Report provides industry professionals and strategists, sector analysts, business investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the food and drink industry and the mass grocery retail market in Spain.

Key Benefits

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