Caribbean Food and Drink Report Q2 2008

With a substantial and costly food import dependency, an under-developed and under-financed agricultural sector, often-challenging inter-regional trade relationships, typically small populations and largely unspectacular economic growth - particularly in comparison to its South American peers - food and beverage investors could be forgiven for thinking that the Caribbean represents a weak investment opportunity. However, as BMI examines in its new Caribbean Food & Drink Report, unveiled for Q208, certain features of many of the islands' food and beverage industries could actually prove highly attractive to investors - particularly experienced players willing to accept the limits of returns on offer.

One such attractive feature is the region's increasingly developed modern retail industry. The spread of supermarkets and hypermarkets, particularly those large enough to manage their own import and distribution, have increased opportunities for the sale of branded food and beverages. While fresh food sold via these outlets may be less affordable to local residents, their scale does typically allow such stores to sell processed goods at lower prices than their independent rivals can manage. With BMI forecasting that the modern retail sector will grow at a double-digit rate in all six markets detailed in this report, the future looks bright for regional food and beverage investors in terms of distribution opportunities.

A second, immensely important investment consideration is the Caribbean's thriving tourism industry.

BMI estimates that the amount of tourists arriving in the Bahamas, Barbados, Puerto Rico, Trinidad & Tobago, Jamaica and the Dominican Republic alone in 2006 topped 9.4mn. This represents an enormous, primarily high-spending, audience at which to target food and beverage brands. In fact, the extent of the tourism sector in the Caribbean is such that investment in distribution and brand-building is valuable, even if there is no real receptive audience for goods among Caribbean residents themselves.

While the Caribbean's food import dependency can be a weakness - pushing up the cost of food processing in the country - it can also be viewed as a strength having helped build a large and receptive audience for high-value, often US goods. This receptiveness has translated to a market in which a large proportion of food spending is committed to high-value foodstuffs, even though diets are still often traditional and per capita food consumption levels are typically low. For example, BMI estimates that 11.8% of Jamaica's US$408mn food bill is spent on dairy products, while 11.5% goes towards beverages and tobacco products.

Of course the biggest pull for potential investors in the region will be its thriving beverages industry. Both the soft and alcoholic drink sectors have benefited from all of the above mentioned strengths to such an extent that the region now boasts a number of globally famous drinks brands. Such a global brand is perhaps unlikely to come out of the region's less developed food sector, but that is not to detract from the promising growth opportunities that the Caribbean provides.

• Executive Summary
  • Business Environment
• SWOT Analysis
  • Mass Grocery Retail
  • Caribbean Mass Grocery Retail SWOT
  • Food and Drink
  • Caribbean Food & Drink SWOT
  • Macroeconomic Outlook
  • Barbados
• Table: Barbados - Macroeconomic Forecasts
  • Dominican Republic
• Table: Dominican Republic - Macroeconomic Forecasts
  • Jamaica
• Table: Jamaica - Macroeconomic Forecasts
  • Puerto Rico
• Table: Puerto Rico - Macroeconomic Forecasts
  • Trinidad & Tobago
• Table: Trinidad & Tobago - Macroeconomic Forecasts
  • Retail
  • Regional Overview
• Table: Total Sales via Grocery Retail Outlets in Selected Caribbean Markets* (US$mn) - Historical Data
• Table: Total Sales via Grocery Retail Outlets in Selected Caribbean Markets* (US$mn) - Forecasts
  • Bahamas
  • Market Overview
  • Industry Forecast Scenario
  • Barbados
  • Market Overview
  • Industry Forecast Scenario
  • Dominican Republic
  • Market Overview
  • Industry Forecast Scenario
  • Jamaica
  • Market Overview
  • Industry Forecast Scenario
  • Puerto Rico
  • Market Overview
  • Industry Forecast Scenario
  • Trinidad & Tobago
  • Market Overview
  • Industry Forecast Scenario
  • Industry Developments
  • Food And Drink
  • Agriculture
  • Regional Overview
• Table: Trinidad & Tobago - Production ('000 tonnes) of Leading Agricultural Commodities
• Table: Jamaica - Production ('000 tonnes) of Leading Agricultural Commodities
• Table: Dominican Republic - Production ('000 tonnes) of Key Agricultural Commodities
• Table: Barbados - Production ('000 tonnes) of Key Agricultural Commodities
  • Food
  • Regional Overview
• Table: Food Spending Breakdown by Product Category in Selected Caribbean Markets (US$mn), 2006
• Table: Caribbean Imports (US$mn) of Agri-food Goods from the US, 2006
  • Industry Forecast Scenario
• Table: Food Consumption in Selected Caribbean Markets
• Table: CARICOM Trade Balance (US$mn) - Food & Live Animals For Food Purposes
  • Industry Developments
  • Drink
  • Regional Overview
• Table: Caribbean Tourism (stop-over) Arrivals, 2006
  • Industry Forecast Scenario
• Table: Trinidad & Tobago Beverage Production by Category - Historical Data & Forecasts
• Table: Jamaica Beverage Production by Category - Historical Data & Forecasts
  • Industry Developments
  • Tobacco
  • Regional Overview
  • Industry Forecast Scenario
• Table: Caribbean Cigarette Production and Consumption Data
  • Industry Developments
  • Competitive Landscape
  • Key Players
  • Mass Grocery Retail
• Table: Key Players - Caribbean Mass Grocery Retail Operators
  • Drink
• Table: Key Players in the Caribbean Drinks Market, 2006
  • Food
• Table: Key Players in the Caribbean Food Market, 2006
  • Company Analysis
  • Mass Grocery Retail
  • Wal-Mart (Puerto Rico)
  • Supermercados Nacional (Dominican Republic)
  • Food
  • Seprod Ltd (Jamaica)
  • Drink
  • Jamaica Drink Company (Jamaica)
  • Red Stripe (Jamaica)
  • How We Generate Our Industry Forecasts
  • Food and Drink Industry
  • Sources