Desperate Times?: Forecast Revisit for Packaged Food in 2011

Introduction

Scope

Objectives of global briefing

External forces impact short-term packaged food prospects

External variables impacting consumer behaviour

Key findings

Impact of Fiscal Consolidation: Focus on US

Strongest impact on impulse and indulgence food

Staples and meal solutions prove more resilient

Previous US packaged food retail volume forecasts

Fiscal consolidation: Impact on US packaged food demand

Fiscal consolidation also constrains retail prices, value sales

Health positioning to offset constraints on retail value growth

Previous US packaged food retail unit price predictions

Fiscal consolidation: Impact on US packaged food prices

Fiscal consolidation also impacts competitive landscape

Impact of fiscal consolidation on meal solution shares

US private label retail value shares by food category

Fiscal consolidation: Impact on US private label food share

Impact of Monetary Policy: Focus on China

Packaged food r etail u nit p rices i ncreasing in real terms

Central Bank admits foreign exchange reserves too high

Higher interest rates could impact consumer spending

Raising Chinese interest rates: Domestic implications

Impact of higher interest rates on Chinese packaged food

Interest rate hike to impact product categories differently

Raising Chinese interest rates: Global implications

Lower Chinese central b ank exposure to foreign treasuries

Impact of Political Instability: Focus on Egypt and Saudi Arabia

The cost of the Egyptian revolution

Continued bread subsidies underpinned by political unrest

How will lingering uncertainty impact packaged food sales?

Non-essential food most impacted by lower economic growth

Impact of better and worst case scenarios on packaged food

Higher public spending in Saudi Arabia in 2011

Impact of economic growth on Saudi food demand

Economic growth accelerates retail volume growth prospects

Premium, value-added formats benefit from high oil prices

Impact of Natural Disasters: Focus on Japan

Local packaged food outlook for 2011-2012

Fukushima crisis impacts canned, chilled and frozen food

Financial and monetary ramifications on local food market

Impact of Japan’s earthquake on international food markets

Impact of Japan’s earthquake on fresh meat consumption

Worst case scenario for global fresh meat prospects

Global stocks lead to falling prices for soybeans

Global corn prices continue to escalate

Final Conclusions

What now for the global packaged food market?

Anticipating the impact of austerity in Western Europe

Updated packaged food growth prospects in Western Europe

Overheating economies and volatile food prices…

…Not yet sufficient to derail emerging market retail growth

What next for the Middle East and North Africa?

Global packaged food retail volume growth outlook

Appendix

IMF World E conomic Outlook 2011-2012

Economic growth downgraded in Middle East, North Africa

Key US economic indicators

Economic data presage weakness of US dollar in 2011

QE-2 versus QE-1: Effects on short-term prospects

Uncertainties persist for future economic growth prospects

High unemployment continues to hamper consumer demand

Deficit reduction becomes primary US political objective

A multiplier for every potential growth scenario

US fiscal consolidation and impact on GDP, unemployment

US public spending cuts and implications for GDP growth

Key Chinese economic indicators

China needs more domestic consumption

High foreign exchange reserves add to inflation concerns

Fluctuations in domestic money supply lead to inflation

2010 sees Japan’s economy return to growth

Forecasting the future: Normal and worst case scenarios

Q1 2011: Japan falling back into recession

Impact on Japanese supply chain input costs

Report Definitions

Data parameters and report definitions

Packaged food versus fresh food

Product category definitions

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