Hot Drinks

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Hot Drinks in Cameroon

Euromonitor International's Hot Drinks in Cameroon market report offers a comprehensive guide to the size and shape of the market at a national level. It provides the latest retail sales data, allowing you to identify the sectors driving growth. It identifies the leading companies, the leading brands and offers strategic analysis of key factors influencing the market - be they new product developments, packaging innovations, economic/lifestyle influences, distribution or pricing issues. Forecasts illustrate how the market is set to change.

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EXECUTIVE SUMMARY

TABLE OF CONTENTS

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Tables: 15 | Publication date: Jun 2006

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GBP325.00

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Executive summary

Poor performance across the board

During the review period, hot drinks performed poorly, despite demand in relative terms dwindling since 2003. In 2005, the market experienced negative growth in sales volumes although value sales maintained a positive growth rate. In January 2005, under new finance legislation, VAT increased by half a percentage point with a rise in excise duty too. This factor, combined with high transaction costs, significantly raised unit prices of hot drinks in Cameroon in 2005.

In 2005, consumer purchasing power plummeted by around 30%. This was caused by a wave of inflation following the increase in VAT and international oil price hikes, unaccompanied by salary adjustment measures. Worse still, the deficient state of the transport infrastructure in Cameroon, coupled with unreliable electricity power supply and a generally high transaction cost environment, added more than 15% to manufacturers' production costs. Against the backdrop of the increasing average cost of production and declining consumer purchasing power, total volume sales of hot drinks in Cameroon declined by 5% in 2005.

Hot weather has a negative impact on the market

In 2003 and 2005, Cameroon has experienced an unprecedented long and severe dry season, characterised by very high temperatures and falling water levels. The northern part of the country, which is typically pro-Muslim by religion and constitutes over 30% of the total population, is under increasing threat of an advancing Saharan desert. Even though Muslims are favourably disposed to consuming non-alcoholic drinks, the hot weather experienced during these two years, reduced their demand for hot drinks. With regard to the non-Muslim population, demand for hot drinks was also hampered by the hotter weather.

Coffee is most dynamic sector

Over the review period, coffee emerged as the most dynamic sector in both volume and value terms. Statistics relevant to this period show that Cameroonians prefer instant coffee. However, demand for fresh coffee beans and fresh ground coffee rose as consumer awareness of these formats grew. This was cultivated by the boom in the supermarkets/hypermarkets industry. As Cameroon is a world producer and consumer of coffee products, there is a huge presence of local as well as foreign players in the Cameroonian coffee sector.

As with all sectors, demand for coffee in volume terms has dwindled in relative terms since 2003 due to the excessively hot weather. However, in spite of negative volume growth in 2005, value sales continued to experience positive growth, cautioned largely by inflationary pressures.

Health awareness boosts sales of hot drinks

With the increasing threat of the HIV/AIDS pandemic and the upsurge of cardio-vascular diseases, there is increasing dietary awareness amongst Cameroonians of all ages. Amongst the younger and middle segments of the population, who are particularly prone to HIV/AIDS, there is a strong inclination towards fruit/herbal tea, which is believed to reinforce immune systems, alleviate sexual impotence and other urinary tract infections.

Companies that produce hot drinks products are using the health factor in advertisements to attract consumers. The older generation has tended more towards coffee consumption. Over the review period, coffee and other hot drinks came first and second respectively in terms of volume CAGRs.

Local players have significant influence on the market

Despite the fact that Nestlé is an absolute leader of the hot drinks market at least in two out of three sectors, local players asserted themselves with reputable brands during the review period. For instance, in instant standard coffee, three local players were present – UCCAO Cameroun, Brulerie Moderne and SAICAM, offering competitive brands in the market. Chococam Cameroun is a leading domestic producer in chocolate-based flavoured powder drinks with Matinal Chocolate drink. In black speciality tea, Cameroon Development Corp (CDC) and Cameroon Tea Estate (CTE) are leading domestic brand owners.

HOT DRINKS IN CAMEROON : MARKET INSIGHT

1. EXECUTIVE SUMMARY

2. HOT DRINKS SALES

2.1 Market Performance

Table 1 Retail Sales of Hot Drinks by Sector: Volume 2000-2005

Table 2 Retail Sales of Hot Drinks by Sector: Value 2000-2005

Table 3 Retail Sales of Hot Drinks by Sector: % Volume Growth 2000-2005

Table 4 Retail Sales of Hot Drinks by Sector: % Value Growth 2000-2005

2.2 Competitive Environment

Table 5 Hot Drinks Company Shares by Retail Value 2001-2005

Table 6 Hot Drinks Brand Shares by Retail Value 2002-2005

2.3 Leading Company Profile: Cameroon Development Corp