Mozambique Food and Drink Report Q3 2012

BMI View: We expect robust private consumption growth in Mozambique over the course of our fiveyear forecast period to 2016. As the country’s export sector expands, largely as a result of the ongoing development of its mining sector, private consumption’s overall contribution to GDP will decline. That said, the country’s favourable demographic profile, coupled with rising disposable incomes as the exploitation of natural resource wealth feeds down into the wider economy, mean that we have a very optimistic outlook towards Mozambique’s consumer-facing industries.

Key Forecasts

Per capita food consumption growth (local currency) in 2012: 11.1%. Compound annual growth rate to 2016: 11.4%.

Beer volume sales growth in 2012: 8.5%. Compound annual growth rate to 2016: 8.3%. Key Trends Organised Retailing: All Southern Africa markets lag regional leader South Africa in terms of the presence of organised grocery retailing. Across the region, formalisation will be a key driver of mass grocery retail sales growth, as more and more shoppers trade up to organised retail channels. This will be true even for the region’s more mature markets; however, we also expect the steady introduction of new store offerings, such as non-food products, to help to support growth. In Mozambique, we estimate that only around 2-3% of grocery retail sales are accounted for by the organised sector and this provides tremendous room for growth.

Beverage Sector Growth: We expect to see strong beverage sales growth throughout the region over our forecast period to 2016 and beyond. There is enormous potential in beer and soft drinks, specifically carbonates, at this stage of the region’s development. Throughout the region the beer market is already keenly contested, and this level of competition will lead to significant new investment over our forecast period, driving strong sector growth. At an estimated 9 litres per annum, Mozambique’s beer consumption levels remain low by regional standards and this provides enormous potential for sales growth.

Demographic Appeal: Demographics are a key component of the region’s appeal given the very low base from which most growth is occurring and the severe income inequalities that still persist. Mozambique’s population dynamics are a plus point for investors. The country’s already attractive 23.9mn-strong population base (as of 2011) will grow to 29.2mn by 2020 and by an enormous 110% over our entire forecast period to stand at 50.2mn in 2050. Most notable is the age profile of the population; in 2012, 54% of Mozambique’s population is forecast to be younger than 20, and this provides immense long-term growth opportunities for regional investors