Croatia Food and Drink Report Q4 2008

Publication Date	October 2008
Publisher	Business Monitor
Product Type	Report
Pages	75
ISBN Number	1749-2653
Product Code	BMI02753

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Summary

The Croatian economy has established a record of solid growth and low inflation since the mid-1990s.

Real GDP growth has averaged around 4.0%, with inflation in the low single digits and the exchange rate stable. Following the January 2007 accession of Bulgaria and Romania into the European Union (EU), Croatia has emerged as the next main candidate, with membership likely sometime in the near future.

These developments have all served to boost consumer confidence and will help drive growth in food and drinks consumption.

Consequently, despite now being found in tenth position out of the 14 markets surveyed in the Central and Eastern Europe (CEE) region (down from seventh in Q308), the attractions of the Croatian food and drink markets remain relatively unchanged. The countrys position worsened due to the improvement in other regional markets, with Croatias overall ranking only being one point lower than in the previous period. Croatia still boasts high per capita consumption of drinks (both soft and alcoholic), with opportunities in particular arising in the bottled water segment, in terms of both still and sparkling varieties.

However, the market has a number of drawbacks, including the price-consciousness of Croatian consumers, a small population and high short-term external risk. As a result of those shortcomings, leading local companies are looking to expand abroad, especially across the territory of former Yugoslavia and the former Eastern Bloc. For example, in July 2008, leading Croatian food manufacturer, the Agrokor Group, purchased Roto Promet, the largest domestic distributor of alcoholic and soft drinks. Agrokor also announced major investments in the Former Yugoslav Republic (FYR) of Macedonia, which is gaining in importance as its regulatory and economic environment improves.

Agrokor has also been linked with the purchase of Russian retail chain Lenta, which runs a number of supermarkets and one hypermarket.

On the other hand, smaller Croatian food and drinks companies are increasingly falling prey to larger players. Illustrating this trend of industry consolidation, July 2008 saw Croatian agribusiness firm Granolio partnering with financial firm Cautio Naice to acquire a 99.97% stake in the dairy company Zdenka. Granolio plans to invest US$30.6mn in the company over the coming five years, as Croatias dairy sector continues to modernise. In the meantime, some breweries are also struggling to survive, with Croatian Zagreb Brewery recently announcing a modest increase in its net profit for 2007. Like all brewers and other food and drinks players, the company felt the effect of rising operating costs.

Content

Executive Summary
Business Environment
Central and Eastern Europe Food & Drink Business Environment Ratings
- Table: Regional Food & Drink Business Environment Ratings
Croatias Food And Drink Business Environment Rating
- Table: Global Food & Drink Business Environment Rankings Croatias Global Peer Group
SWOT Analysis
Food And Drink
Croatia Food And Drink Industry SWOT
Mass Grocery Retail
Croatia Mass Grocery Retail Industry SWOT
Macroeconomic Outlook
- Table: Croatia Economic Activity
Food
Industry Forecast Scenario
Food Consumption
- Table: Croatia Food Consumption Indicators Historical Data & Forecasts
Confectionery
- Table: Croatia Value/Volume Sales of Confectionery Historical Data & Forecasts
Canned Food
- Table: Croatia Canned Food Indicators Historical Data & Forecasts
Trade
- Table: Croatia Food & Drink Sectoral Trade (US$mn) Historical Data And Forecasts
Industry Developments
Market Overview
Food Production
Confectionery
Canned Food
Trade
- Table: Key Export Destinations For Selected Products
Agriculture
Sugar Production
Drink
Industry Forecast Scenario
Alcoholic Drinks
- Table: Croatia Beverage Sectors Value/Volume Sales Historical Data & Forecasts
Hot Drinks
- Table: Croatia Hot Drinks Value/Volume Sales Historical Data & Forecasts
Soft Drinks
- Table: Croatia Soft Drinks Value/Volume Sales Historical Data & Forecasts
Industry Developments
Market Overview
Alcoholic Drinks
Hot Drinks
Soft Drinks
Agriculture At A Glance
- Table: Croatia Agricultural Production Data
- Table: Croatia Fishing Industry Data (tonnes)
- Table: Croatia Organic Agricultural Data
- Table: Croatia Rural/Urban Population Breakdown
Agricultural Commodity Price
Retail
Industry Forecast Scenario
- Table: Croatia Mass Grocery Retail , Value Sales By Format Historical Data And Forecasts (US$bn)
- Table: Grocery Retail Sales By Format Historical Data And Forecasts
Industry Developments
Market Overview
Leading Players
- Table: Mercator Private Label As % Of Product Sales In Foreign Markets
- Table: Structure Of Croatias Mass Retail Grocery Sector By Estimated Number Of Outlets
- Table: Structure Of Croatia's Mass Retail Grocery Market By Value (US$mn)
- Table: Croatia Estimated Value Of Sales Per Outlet (US$mn)
Competitive Landscape
Key Players
Food And Drink
- Table: Key Players Croatia's Food & Drink Sector (2007)
Mass Grocery Retail
- Table: Key Players: Croatias Mass Grocery Retail Sector, 2007
Company Analysis
Food
Franck
Podravka
Agrokor
Dukat (Formerly Lura)
Kra
Drink
Adriatic Distillers
Carlsberg Croatia
Mass Grocery Retail
Spar Austria
Lidl
Konzum
Mercator-H
Getro
Rewe
Recession Scenario
Global Scenario
- Table: World GDP Growth
- Table: US GDP Growth, Investment Growth And Private Consumption Growth
- Table: Eurozone GDP Growth
- Table: Asia, Excluding Japan, GDP Growth
- Table: China GDP Growth
- Table: Mexico GDP Growth
- Table: Africa GDP Growth
CEE Food & Drink Scenario
- Table: Impact Of Deep US Recession On Total Food Consumption (US$Bn) In Selected CEE Markets Cumulative US$ Impact Over 5yr
Forecast Period
Appendix
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