BMI View: We forecast growth in the food and drink industry to remain largely resilient to broadereconomic headwinds facing South Africa. Food sales will be supported by rising household incomes as wellas favourable demographic trends. Health consciousness will shape consumer demand in the non-alcoholicdrinks sub-sector, while innovation and premiumisation will be prevalent trends in the alcoholic drinkscategory. Excellent harvests in 2017 will likely lower food inflation thus supporting consumption in theshort-run.
Latest Updates And Industry Developments
We forecast total food sales to expand by 5.1% (year-on-year) in 2017, but accelerate in the mediumterm, averaging 7.0% per annum during 2017-2021. However, sluggish economic growth and weakeningconsumer confidence pose downside risks to our projections.