Packaged Food: Quarterly Statement Q3 2016

Brazilian snacks market hit hardest by downward revisions

Brazil, once a beacon of hope for so many in the food industry, continues to experience economic downturn. The country has seen yet another downgrade in its snacks forecast revisions, down by over 46,000 tonnes compared to the second quarter.

Brexit could favour cheaper confectionery, reacting against premium trend

Brexit is unlikely to have a dramatic effect on confectionery sales, with the quarterly update showing a 2%, or 12,000 tonnes, reduction in volume sales by 2020. Per capita consumption is likely to continue to decline, and this would be particularly accentuated by a “disorderly” Brexit. Given that value sales would see a larger decrease in this event, it seems that disorderly Brexit may see consumers move to lower-priced confectionery, reversing the current popularity of premium chocolate.

BRIC decline could be the most worrying story for global food manufacturers

This statement highlights the noticeable decline in Brazil, Russia and China which remains ongoing. These markets were once seen as the great hopes of the food industry, however Russia is seeing a significant impact across food categories, including baby food, and continues to be revised downwards while Brazil has seen the largest downward revisions of any country. China is anticipated to return to growth, but this year highlights the fragility of global growth.

US expansion at the forefront of many manufacturers’ minds

With this in mind, many companies have sought to boost their presence in the US; Mondelez and Danone are two of the latest companies looking to acquire in the market. Despite its low growth, the sheer size of the US packaged food market makes it attractive in these times of permanently low growth around the world.