Bulgaria Food and Drink Report Q3 2009

Publication Date	June 2009
Publisher	Business Monitor
Product Type	Report
Pages	79
ISBN Number	not applicable
Product Code	BMI02110

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Summary

In BMI's Q309 Business Environment Ratings (BER) for the 14 major markets of Central and Eastern Europe (CEE), Bulgaria slipped from the previously occupied 10th to the last place of the matrix, mostly due to its rapidly deteriorating economic outlook. Despite a considerable upward revision by the Bulgarian National Statistical Institute to Q308 GDP, we hold to our view that economic growth will slow markedly in 2009. Indeed, with the eurozone heading deeper into recession, credit remaining tight and the private sector under pressure to clean up its balance sheet, we see growth collapsing to 1.1% from a projected 6.4% in 2008. To this end, in the 2009-2013 period, we are forecasting a 14.4% reduction (in local currency terms) in Bulgaria's food expenditure. Therefore, the country is likely to remain at or near the very bottom of the BER matrix for the next few quarters, especially given its modest population size.

Nevertheless, the above situation will provide a growth opportunity for retail operators offering discount and private-label products. In fact, a number of such players have recently announced expansion into Bulgaria's mass grocery retail (MGR) sector. In the month of March 2009, French MGR giant Carrefour opened its first hypermarket in Burgas, Serbian Delta opened its first outlet in Plovdiv, while German Lidl secured land in Bulgaria's northern town of Pleven. All three plan further store openings in the country, although the rate of this expansion may have to be moderated in the face of a deteriorating economic environment. In the meantime, the rising prominence of cheaper food and drinks offerings will continue to support our negative food consumption forecasts.

Nevertheless, there have been some positive developments in the country's food and beverages market.

For example, one of the leading Bulgarian fruit and vegetables processors, Nash Dom Bulgaria AD, posted a strong increase in both its 2008 turnover and profit, although much of the performance was boosted by the recent sale of its subsidiaries. Still, around the same time, Bulgarian meat processor Delicates 2 Ltd inaugurated its second manufacturing facility, with plans to increase its export potential.

Foreign players are also expanding in Bulgaria, with Fornetti - the leading bakery firm in Hungary - due to open its local franchise in Q309, in order to eliminate its reliance on imports of baked goods for the Bulgarian market.

Similarly, UK-based spirits heavyweight Diageo prolonged its eight-year partnership with Bulgaria-based distribution company Avendi, with the signing of a five-year contract. The renewal comes despite a sharp plunge in the country's economic outlook, indicating some companies' belief in market potential. Avendi is a highly valued partner of Diageo's, having been honoured as Diageo's CEE partner of the year in 2006. Indeed, Diageo's products have climbed to among the top selling spirits labels in Bulgaria, with its Johnny Walker brand being particularly popular, despite strong competition from imported beers, which have risen in popularity following the EU accession.

Content

Executive Summary
SWOT Analysis
Bulgaria Food Industry SWOT
Bulgaria Drink Industry SWOT
Bulgaria Mass Grocery Retail Industry SWOT
Business Environment
CEE Food & Drink Business Environment Ratings
- Table: Regional Food & Drink Business Environment Ratings
Bulgaria's Food & Drink Business Environment Rating
Macroeconomic Outlook
- Table: Bulgaria - Economic Activity, 2004-2013
Food
Industry Forecast Scenario
Food Consumption
- Table: Bulgaria Food Consumption Indicators
Confectionery
- Table: Bulgaria Confectionery Consumption Indicators (US$mn, unless otherwise stated) - Historical Data & Forecasts
Canned Food
- Table: Bulgaria Canned Food Indicators (US$mn) - Historical Data & Forecasts
Trade
- Table: Bulgaria Food & Drink Trade Indicators (US$mn unless otherwise stated) - Historical Data & Forecasts
Industry Developments
Market Overview
Food Consumption
Leading Players
Confectionery
Canned Food
Trade
Agriculture
Dairy
Organic Farming
Drink
Industry Forecast Scenario
Alcoholic Drinks
- Table: Bulgaria Alcoholic Drinks Indicators - Historical Data & Forecasts
Soft Drinks
- Table: Bulgaria Soft Drinks Indicators - Historical Data & Forecasts
Hot Drinks
- Table: Bulgaria Hot Drinks Indicators (US$mn) - Historical Data & Forecasts
Industry Developments
Market Overview
Alcoholic Drinks
Beer
Wine
Spirits
Soft Drinks
- Table: Bulgaria - Volume Consumption Of Soft Drinks By Category (mn litres)
- Table: Bulgaria - Value Consumption Of Soft Drinks By Category (US$mn)
Hot Drinks
Mass Grocery Retail
Industry Forecast Scenario
- Table: Bulgaria Grocery Retail Sales By Format (%)
Industry Developments
Market Overview
Leading Players
- Table: Structure Of Bulgaria's Mass Retail Grocery Market By Estimated Number Of Outlets
Competitive Landscape
Key Players
Food And Drink
- Table: Key Players in Bulgaria's Food & Drink Sector, 2008
Mass Grocery Retail
- Table: Key Players In Bulgaria's Mass Grocery Retail Sector, 2008
Company Analysis
Food
Unilever Bulgaria
Kraft Bulgaria
Nestl?(C) Sofia AD
Drink
Zagorka (Heineken)
Carslberg Bulgaria
InBev Bulgaria (Kamenitza)
Mass Grocery Retail
Metro Cash & Carry Bulgaria
Billa Bulgaria
CBA Bulgaria
Piccadilly
Appendix
Commodity Price Forecasts
Corn
- Table: Corn, 2005-2010
Soybean
- Table: Soybean, 2005-2010
Rice
- Table: Rice, 2005-2010
Wheat
- Table: Wheat, 2005-2010
Cocoa
- Table: Cocoa, 2005-2010
Coffee
- Table: Coffee, 2005-2010
Milk
- Table: Milk, 2005-2010
Sugar
- Table: Sugar, 2005-2010
Country Snapshot: Bulgaria Demographic Data
Section 1: Population
- Table: Demographic Indicators, 2005-2030
- Table: Rural/Urban Breakdown, 2005-2030
Section 2: Education And Healthcare
- Table: Education, 2002-2005
- Table: Vital Statistics, 2005-2030
Section 3: Labour Market And Spending Power
- Table: Employment Indicators, 2001-2006
- Table: Consumer Expenditure, 2000-2012 (US$)
- Table: Average Annual Wages, 2000-2012
Food & Drink Business Environment Ratings
Ratings Methodology
Ratings Overview
Ratings System
Indicators
- Table: Limits Of Potential Returns
- Table: Risks To Realisation Of Potential Returns
Weighting
Weighting
BMI Food & Drink Industry Glossary
Food & Drink
Mass Grocery Retail
BMI Food & Drink Forecasting And Sourcing
How We Generate Our Industry Forecasts
Sourcing