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Turkey Food and Drink Report Q1 2010Published by: Business Monitor International Published: Nov. 5, 2009 - 63 Pages Table of Contents
AbstractWhile the Turkish economy is forecast to have contracted by 6.2% in 2009, the sharp improvement in Q2growth combined with the marked recovery in leading indicators reinforces our long-held view thatTurkey is among the best positioned economies in emerging Europe to recover quickly post-financialcrisis. While the impact of the recession has certainly been felt in the country’s food and drink industry,the sector is now showing signs of improvement.In September, Coca-Cola Içecek (CCI), Turkey’s leading soft drinks company, announced that it hadrecorded a 14.5% year-on-year (y-o-y) mark up in H109 to TRY76.9mn (US$51mn). The bottler'sencouraging navigation of the downturn and the broader resistance of the low-cost carbonates segment inthe current down-trade-friendly climate was particularly well emphasised by its stellar sales volumeshowing. Over CCI's first-half cycle, consolidated sales volume increased by 13.8%. These figures are inline with BMI’s positive forecast for Turkey’s soft drinks sector. Driven by product innovation, a youngmarket, a predominantly Muslim population, and a thriving tourism industry, we are forecasting stronggrowth in the soft dinks industry, with sales forecast to grow by 64.8% between 2009 and 2014, to reach avalue of TRY10.5bn. It is not just CCI that has reported more positive financial results. In August domestic beverage behemothAnadolu Efes announced that it had bounced back in Q209 after foreign exchange losses and debtservicingexpenses incurred in Q109 forced the company to report a net loss of TRY25.2mn(US$16.8mn). Anadolu Efes recorded above-consensus second-quarter net income of TRY251.4mn,representing a sharp 35% year-on-year (y-o-y) increase. With group-wide beer sales coming under morestress than soft drinks in H109, much of the second quarter recovery can be traced to the soft drinks unit.While carbonates and bottled water will continue to be the principle growth engines, opportunities inhigher value segments such as fruit juices should continue to open up. Anadolu Efes also reported thatgroup sales volumes increased by 4% y-o-y in H109. Despite the below par performance of Anadolu Efes'international beer unit Efes Breweries International (EBI), the company fared well domestically, as beervolume sales in Turkey increased by 2.3% y-o-y while soft drinks volumes grew by 13.8% y-o-y. BMI is particularly encouraged by the beer unit's performance. Beer volume sales across a number of theworld's markets are either contracting or reporting flat growth as consumers cut back on non-essentialspending. The domestic beer unit's performance largely reflected the effectiveness of the company'smarketing initiatives and the further progress it made in improving its route to market across both on- andoff-trade channels. Bearing in mind that Turkey's population currently stands in excess of 70mn (andrising), its long-term economic outlook is dynamic and its alcoholic drinks industry is held back by thefact that Turkey is a majority-Muslim country. There are immense opportunities for cross-segment softdrinks growth that are currently untapped. Get Full Details About This Report >> |
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