Global Food & Drink Q4 2018
With escalating tariffs going into effect on September 24 2018 between the US and China, this will continue to have alarge impact on the food and drink industry and reduce consumer spending as a whole. The perishable nature of food and drinkproducts means that it will be one of the first industries hit by the tariffs as these goods need to be moved quickly through supplychains and would lead to higher prices at grocery stores. The tariffs will not affect our topline growth forecasts for now, but at thecompany level, this may cause some significant turmoil for US-based companies with large international presences. We continue toexpect growth to average 6.1% across food and non-alcoholic drinks in 2018, before improving to 7.4% in 2019. This elevated levelof expenditure will be driven by trends towards healthification and premiumisation, as global companies continue to respond to thisby investing in new startups and products, in an effort to reinvigorate stagnating sales. For now, these trends should overcome thehigher prices but a prolonged trade war impacting other spending segments could force consumers to cut back their overallexpenditure across many categories over the longer term.
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