Market Report, "South Korea Food & Drink Report Q1 2011", published

Jan. 30, 2011 - PRLog -- Despite our near- to medium-term optimism in the South Korean consumer story, the country's ageing population and low fertility rate could undermine the consumer sector's scope for growth and fuel the current outbound mergers and acquisitions trend from domestic food and drink (F&D) industry players. Faced with growing saturation in South Korea, these players have been increasingly shifting their focus on to the international scene: Lotte Shopping's recent bid for Indonesian retailer Matahari's Hypermart and Lotte Chilsung's proposed acquisition of a 34.4% stake in Pepsi- Cola Products Philippines are recent examples of this trend. Hence, BMI would foresee slower dynamism within the South Korean F&D sector, with quickly-depleting growth opportunities up for grabs beyond our current five-year forecast period.

Headline Industry Data

* 2010 Per Capita Food Consumption = +3%; forecast to 2015 = +14.2%
* 2010 Alcoholic Drink Sales = +4.1%; forecast to 2015 = +25%
* 2010 Soft Drink Sales = +6%; forecast to 2015 = +38.3%
* 2010 Mass Grocery Retail Sales = +10.4%; forecast to 2015 = +40.2%

Key Industry Trends & Developments

Overcrowding In Retail Market Prompts Overseas Expansion - The South Korean hypermarket and supermarket sub-sectors are increasingly saturated and the impending government legislation on curbing the opening of large-scale supermarkets or hypermarkets is expected to further frustrate retailers' future expansionary efforts. With this in mind, domestic retailers are increasingly shifting their attention to overseas markets. Lotte Shopping is a clear frontrunner on this outbound mergers and acquisitions (M&A) trend, with its latest bid for Indonesian retailer Matahari's hypermarket stores demonstrating its desire to diversify abroad. Domestic retailer Shinsegae has also been linked to the acquisition of Matahari's Hypermart chain, suggesting further momentum to this outbound M&A trend.

An Increasingly-Saturated Food And Drink Market - South Korea's food and drinks sectors are also rapidly maturing, and industry players are diversifying their geographic and product portfolios to secure future growth. Domestic beverage producer Lotte Chilsung, for example, is looking to acquire a 34.4% stake in Philippine Pepsi bottler Pepsi-Cola Products Philippines for KRW118.4bn (US$101.9mn) as it seeks to improve its geographic diversity. Similarly, South Korean conglomerate Lotte Group has acquired domestic dairy producer Pasteur Milk via its subsidiary Lotte Samkang as it explores new avenues of growth while securing its dominant foothold in the fast-maturing beverage and confectionery market.

Risks To Outlook

Chinese slowdown - Current monetary tightening measures targeted at alleviating inflationary pressures within the Chinese housing sector is likely to take a knock on South Korean export growth in 2011, given that South Korea exports significant quantities of capital goods to China. This could have a worse-thanexpected impact on South Korea's economic growth, and private consumption growth may take a turn for the worse over the coming quarters.

Resilient Global Headwinds - Should the global outlook prove to be more resilient than expected, price pressures may start to build up and may spark off a series of interest rate hikes in 2011, which will in turn weigh on consumer credit and spending.

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Partial Table of Contents:

BMI Industry View
SWOT Analysis
- South Korea Food Industry SWOT
- South Korea Drink Industry SWOT
- South Korea Mass Grocery Retail Industry SWOT
Business Environment
- BMI's Core Global Industry Views
- BMI Food & Drink Core Views
- Asia Pacific Business Environment Ratings
- Table: Asia Pacific Food & Drink Risk/Reward Ratings -Q1 2011
- South Korea Food & Drink Business Environment Rating
- Macroeconomic Outlook
- Table: South Korea - Economic Activity, 2008-2015
Industry Forecast Scenario
- Consumer Outlook
- Demographics To Undermine South Korea's Long-Term Consumer Prospects
Food
- Food Consumption
- Table: Food Consumption Indicators - Historical Data & Forecasts
- Canned Food
- Table: Value/Volume Sales of Selected Food Sub-Sectors - Historical Data & Forecasts
- Confectionery
- Table: Value/Volume Sales of Selected Food Sub-Sectors - Historical Data & Forecasts
- Trade
- South Korea Food & Drink Trade Indicators - Historical Data & Forecasts
- Drink
- Hot Drinks
- Table: South Korea Beverage Sub-Sectors - Value Sales - Historical Data & Forecasts
- Alcoholic Drinks
- Table: South Korea Beverage Sub-Sectors - Value Sales - Historical Data & Forecasts
- Soft Drinks
- Table: South Korea Beverage Sub-Sectors - Value Sales - Historical Data & Forecasts
- Mass Grocery Retail
- Table: South Korea MGR Indicators - Sales Value by Format - Historical Data & Forecasts
- Grocery Retail Sales by Format - Historical Data & Forecasts
Food
- Industry Developments
- Market Overview
- Agriculture
- Organics
- Food-Processing
Drink
- Industry Developments
- Market Overview
- Alcoholic Drinks
- Soft Drinks
Mass Grocery Retail
- Industry Developments
- Market Overview
- Average Sales per Outlet by Format - 2009
Competitive Landscape
- Key Players - Food
- Key Players in South Korea's Food Sector
- Key Players - Drink
- Key Players in South Korea's Drink Sector
- Key Players - MGR
- Key Players in South Korea's Mass Grocery Retail Sector
- Company Analysis
- Food
- Maeil Dairy Industry
- Nong Shim Co Ltd
- Drink
- Hite Brewery
- Oriental Brewery
-

Full Table of Contents is available at:
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Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available.