How Can Packaged Food Companies Grow Their Presence in Emerging Markets?

Introduction

Scope

Key findings

Rising Proportion of Revenues Generated in Emerging Markets

Attractive economic indicators in emerging markets

Rising proportion of sales from emerging markets

Fast growing emerging markets, h igh-margin developed markets

Unilever: Already the majority of sales from emerging markets

Kraft’s European growth boosted by the Cadbury integration

Kraft spins off low-growth/high-margin North America business

Danone : Emerging markets’ growth still strongly volume driven

Nestlé: PPP business model drives growth in emerging markets

Multinationals’ Growth Dynamics in Emerging Markets

Different level of market penetration in emerging regions

Asia Pacific: Local/regional companies still dominate

Latin America: Most consolidated by multinationals

Middle East and Africa: The smallest emerging region

Eastern Europe: Most dominated by multinational players

Strongly Acquisitive Expansion Strategies

Case study: Global-scale acquisitions to fill emerging market gaps

Cadbury acquisition shifts Kraft’s emerging markets coverage

Still existing market gaps in Asia Pacific

Kraft builds on its early mover advantage in Eastern Europe

Lactalis’s investment in Parmalat to expand into new markets

Best emerging market gains achieved by Lactalis’s Parmalat deal

Portfolio diversification important to Lactalis to expand in Asia

Strategy evaluation

Case study: Acquisition of local players in emerging markets

Multinationals’ acquisitions in identified focus markets

Nestlé’s steady expansion in China and Eastern Europe

Nestlé’s growth ambitions and challenges in China

Expansion target market: Russia dairy

Objectives achieved by Russian acquisitions, next moves

Heinz acquisitive in emerging regions but still on small scale

Strategy evaluation

Case study: Acquiring high-brand equity labels

General Mills’s opportunities in emerging markets with Yoplait

Moving Yoplait into new markets through General Mills’s operations

Strategy evaluation

Large-scale, Multi-regional Joint Ventures

Case study: Joint ventures targeting emerging markets

CPW: Multi-regional, single industry focused joint venture

CPW’s geographic market coverage

CPW’s growing emerging markets presence

Danone’s Asian operations after its exit from Wahaha joint venture

Next moves for Danone in Asia dairy markets

Hershey’s slow-paced expansion via Indian joint venture

More intense international expansion needed

Strategy evaluation

Organic Expansion of Established Flagship Labels

Case study: Organic expansion in emerging markets

Unilever’s expansion of flagship f ood l abels in new m arkets

Perfetti’s organic expansion in India via category diversification

Campbell’s organic expansion plan does not work in Russia

Future growth directions for Campbell in soup

Strategy evaluation

Key Company Strategies in a Changing Operating Environment

Companies will t arget n ew t ype of emerging m arkets c onsumer

Changing markets c onditions in emerging e conomies

Extensive presence in emerging markets but market gaps remain

Portfolio development needed for emerging markets conquest

Bolt-on acquisitions to target identified focus markets

Large-scale acquisitions to enhance international presence