Croatia Food and Drink Report Q3 2009

Publication Date	June 2009
Publisher	Business Monitor
Product Type	Report
Pages	82
ISBN Number	not applicable
Product Code	BMI02216

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Summary

In the BMI's Q309 Business Environment Ratings (BER) matrix, Croatia is placed ninth out of the 14 major food and drinks markets in Central and Eastern Europe (CEE), having previously been second-last.

The improvement is in part explained by the considerable worsening of the scores awarded to some other CEE countries, such as Latvia and Estonia, which are facing major problems brought about by the current global economic crisis. Nevertheless, Croatia itself is limited by its small population size, price-sensitivity of Croatian consumers and the modest per capita spend on food, given the limitations of its per capita incomes - although the country's total food consumption is expected to grow by 8.93% through to 2013, reaching US$2.39bn. However, in the short-term, rising unemployment and falling numbers of tourists will be just some of the factors holding back the development of food and drinks values in Croatia.

The longer-term forecasts are, nevertheless, upheld by the fact that a number of Crotian companies reported solid financial performance for 2008, despite wider economic woes. For example, Croatian food and drink giant Podravka posted a 144% and 9% year-on-year (y-o-y) growth of its net income and turnover, respectively. However, BMI believes that the severe fallout in consumer confidence enforced by the shuddering impact the global financial crisis is having on CEE is likely to weigh down on Podravka's performance in 2009. In fact, given that leading Croatian confectionery producer Kra??

reported lower net profits in 2008, illustrating difficulties facing producers of non-essential foodstuffs.

Nevertheless, in February 2009, Podravka, Kra??, and Croatian coffee and snacks maker Franck - in partnership with a number of major banks - were reportedly planning to create a consortium, which would target suitable foreign companies through acquisition. According to local newspaper Poslovnki dnevnik, the consortium is also interested in the purchasing of brands owned by Droga Kolinska, such as Barcaffe (the leading coffee brand in Slovenia) and Grandcaffe, which would complement Franck's portfolio. Podravka is reportedly targeting Argeta pates and Cocta soda, having already acquired the fruit spread brand Belsad, while Kra?? is looking to take over Soko ? tark, the Serbian confectionery arm of the Slovenian company, which indicates that Croatian players are continuing to plan long-term.

In the meantime, while we expect GDP per capita to rise by an impressive 90.41% through to 2018, we caution that the Croatian mass grocery retail (MGR) market will remain relatively small. This will have an impact on the country's food and drinks values, especially as its population is not expected to get much beyond the 4.4mn mark. Still, Croatia's progress towards the membership of the European Union (EU), which could be finalised within the next three years, should improve the position of foreign players in the local market, given that the government exhibits a considerable degree of protectionism towards the domestic industry.

Content

Executive Summary
SWOT Analysis
Croatia Food Industry SWOT
Croatia Drink Industry SWOT
Croatia Mass Grocery Retail Industry SWOT
Business Environment
CEE Food & Drink Business Environment Ratings
- Table: Regional Food & Drink Business Environment Ratings
Croatia's Food & Drink Business Environment Ratings
Macroeconomic Outlook
- Table: Croatia - Economic Activity
Food
Industry Forecast Scenario
Food Consumption
- Table: Croatia Food Consumption Indicators - Historical Data & Forecasts
Confectionery
- Table: Croatia Confectionery Value/Volume Sales (US$mn, unless otherwise stated) - Historical Data & Forecasts
Canned Food
- Table: Croatia Canned Food Value/Volume Sales - Historical Data & Forecasts
Trade
- Table: Croatia Food & Drink Sector Trade Indicators (US$mn) - Historical Data & Forecasts
Industry Developments
Market Overview
Food Production
Confectionery
Canned Food
Specialist Foods
Trade
- Table: Key Export Destinations For Selected Products, 2005
Agriculture
Organic Farming
Dairy Production
Sugar Production
Olive Farming
Drink
Industry Forecast Scenario
Alcoholic Drinks
- Table: Croatia Alcoholic Drinks Value/Volume Sales - Historical Data & Forecasts
Hot Drinks
- Table: Croatia Hot Drinks Value/Volume Sales (US$mn) - Historical Data & Forecasts
Soft Drinks
- Table: Croatia Soft Drinks Indicators - Historical Data & Forecasts
Industry Developments
Market Overview
Alcoholic Drinks
Beer
Spirits
Soft Drinks
- Table: Croatia - Volume Consumption of Soft Drinks by Category (mn litres)
- Table: Croatia - Value Consumption of Soft Drinks by Category (US$mn)
Hot Drinks
Mass Grocery Retail
Industry Forecast Scenario
- Table: Croatia Mass Grocery Retail Value Sales By Format (US$bn) - Historical Data & Forecasts
- Table: Croatia Grocery Retail Sales By Format (%) - Historical Data & Forecasts
Industry Developments
Market Overview
Leading Players
- Table: Mercator - Private Label As % Of Product Sales In Foreign Markets
- Table: Structure of Croatia's Mass Retail Grocery Sector by Estimated Number of Outlets
- Table: Structure of Croatia's Mass Retail Grocery Market by Value (US$bn)
Competitive Landscape
Key Players
Food & Drink
- Table: Key Players in Croatia's Food & Drink Sector (2008)
Mass Grocery Retail
- Table: Key Players: Croatia's Mass Grocery Retail Sector (2008)
Company Analysis
Food
Franck
Podravka
Agrokor
Dukat (formerly Lura)
Kra??
Drink
Adriatic Distillers
Carlsberg Croatia
Badel 1862
Mass Grocery Retail
Spar Austria
Lidl
Konzum
Mercator-H
Getro
Rewe
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: Croatia Demographic Data
Section 1: Population
- Table: Demographic Indicators, 2005-2030
- Table: Rural/Urban Breakdown, 2005-2030
Section 2: Education & Healthcare
- Table: Education, 2000-2003
- Table: Vital Statistics, 2005-2030
Section 3: Labour Market & Spending Power
- Table: Employment Indicators, 1999-2004
- Table: Consumer Expenditure, 2000-2010 (US$)
- Table: Average Annual Wages, 2000-2010
Food & Drink Business Environment Ratings
Ratings Methodology
Ratings Overview
Ratings System
Indicators
Limits of Potential Returns
Risks To Realisation Of Potential Returns
Weighting
Weighting
BMI Food & Drink Industry Glossary
Food & Drink
Mass Grocery Retail
BMI Food & Drink Forecasting & Sourcing
How We Generate Our Industry Forecasts
Sourcing