Uganda Food and Drink Report Q2 2016
BMI View: Uganda's food and drink sector will expand at a robust pace throughout our forecast period to2020, although it is coming from a very low base. Rising incomes and the gradual formalisation of the foodretail sector will underpin our favourable view. Nonetheless, we caution that operational risks remain high,due to poor infrastructure and distribution networks.
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Rising incomes in Uganda will drive spending on food and drink over the next five years. While staplescurrently dominate the typical diet, households will gradually be able to incorporate more discretionaryfood items such as confectionery products.
In the drinks sector, we expect beer and carbonated soft drinks to outperform, benefiting from a youngconsumer base. In addition, these categories tend to perform well in less sophisticated markets, whereconsumer preferences are not highly dynamic.
Nonetheless, obstacles remain for potential investors, including a very underdeveloped formal retailsector (currently accounting for less than 5% of total food retail sales) and a weak infrastructure network.
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