Analyst Insight by Tim Barrett - Retailing Analyst
On March 25th, 2015 it was announced that Kraft Foods and HJ Heinz would merge, ultimately forming a packaged food power house called the Kraft Heinz Co. This combined company would have a 5.4% value share of the entire US packaged foods market, making it the number one company in the space with nearly US$20 billion in sales. This merger is primarily a response to a changing grocery landscape which prioritizes cost efficiencies, given the emphasis on low prices for the consumer.
Wal-Mart becomes king of grocery retailing
Within grocery retail, Wal-Mart maintains disproportionate power as the nation’s dominant grocery retailer with around 20% market share in 2014. Its second largest competitor, Kroger, only has 8%. Wal-Mart has managed to tighten its grip on the grocery market over the past ten years, growing sales from US$45.3 billion in 2004 to US$156.5 billion in 2014. Wal-Mart was able to increase its grocery sales by 245% thanks to its core strategy: lower prices.
Continue reading "Why the Changing US Grocery Retail Market Underpins the Kraft and Heinz Merger" »
Analyst Insight by Spiros Malandrakis - Senior Alcoholic Drinks Analyst
Keeping up with the marathon of legislatives changes, political posturing, taxation hikes and advertising restrictions in the freefalling Russian alcoholic drinks market over the past 5 years would prompt one to reach out for a stiff drink- even before factoring the rubble’s plunge or the geopolitical Gordian knot and resulting sanctions into the equation.
Begrudgingly doing so would probably lead to lacing said stiff drink with generous quantities of caffeine in the hope that the temporary buzz would provide short term insulation from the market’s crashing realities. From the 1st of May, even that – admittedly desperate – option will be illegal, at least in Moscow.
Continue reading "RTDs in Russia: Red Alert for Stimulants in Moscow" »
The recent merger between Kraft and Heinz is not a growth story, but a cost cutting story. Heinz has already cut staff and manufacturing plants previous to the merger, and in order to achieve mutual benefits, Kraft will likely have to follow suit. With the combination of insights and consumer trends teams, new product launches catering to US palates are likely in the near future.
Continue reading "Kraft and Heinz Merger a Cost Cutting Story" »
Analyst Insight by Lianne van den Bos - Food Analyst
Over the last few years Internet retailing for baby food has soared in China after several baby food scares caused parents to turn to the online channel to order “trusted” European brands that were sold out in-store. One of the latest threats in New Zealand could boost Internet retailing even more.
New Zealand’s largest dairy producer, Fonterra, as well as Federated Farmers, are making efforts to reassure consumers that their products are safe after a blackmail threat was received to poison both companies’ infant formula. The letters threatened to contaminate infant formula with a poison known as 1080, used in pest control, as a protest to stop the country from using it. Biodegradable 1080 poison is the only toxin currently registered for use on mainland New Zealand as suitable for aerial targeting of possums - a major conservation and agricultural pest.
Continue reading "E-Commerce in China Could Boom after New Zealand Infant Formula Poison Threat" »
Insight by Erika Sirimane - Business Development Consultant
On March 10th 2015, the New Zealand Police and the Ministry for Primary Industries held a joint press conference to announce that Fonterra Co-operative Group Ltd and the Federated Farmers advocacy organisation received letters in November 2014 threatening to contaminate infant formula and other products if New Zealand did not stop using the pesticide 1080 by the end of March 2015. 1080, a pest control chemical compound commonly used by the Department of Conservation to control possum and rodent populations, represents a contentious issue in New Zealand, with the use often supported by conservationists and livestock farmers, but typically opposed by residents living in 1080 aerial-drop zones.
Continue reading "Threat on New Zealand Dairy as 1080 Infant Formula Contamination Scare Revealed" »
At the end of March 2015, the European Union will abolish milk quotas, meaning EU member states are no longer restricted on the amount of milk they can produce. This increased output means a likely oversupply of milk. Using Passport and Euromonitor's Competitor Analytics system, Euromonitor identifies key markets, categories and companies that ingredients suppliers should target.
Continue reading "Case Study: Identifying Potential Targets for Milk Products after the end of EU Milk Quotas" »
As most expected, the UK budget was not characterised by endless pre-election giveaways, however an important point was the forecast reduction in public debt. A sign of austerity working? More a sign of low inflation, reducing debt repayments, asset selling and real GDP growth. In 2014, UK public debt was the ninth highest in the EU, slightly above the EU average, but lower than France, Spain and Italy. In constant terms it increased by 75% since 2008 and reached £24,313 per capita last year. The government’s forecast of 71.6% of GDP in 2020 will take it back down to 2009-2010 levels, but remaining way higher than pre-crisis.
Continue reading "UK Budget 2015: Debt Reduction is Not Assured" »
Analyst Insight by Utku Tansel - Head of Toys and Games Research
Nintendo has just announced a new partnership with Tokyo-based mobile gaming and e-commerce company DeNA to develop game apps for smart devices featuring its iconic characters including Mario and Donkey Kong. As part of the deal, Nintendo will buy around 10% stake in the mobile gaming company marking a major shift in its global strategy.
As Euromonitor International highlighted in its latest company profile, Nintendo’s strategy of software exclusivity has been undermined by the rise of mobile gaming on smartphones and tablets, and ongoing technological improvements to these devices, especially as casual gamers form a core consumer group for the company. In the same profile, Euromonitor International rightly advised Nintendo to look at ways to leverage the strength of its games portfolio to develop apps for mobile devices.
Continue reading "As Recommended by Euromonitor, Nintendo Ventures into Mobile Gaming" »
Even though there has been much debate over plain packaging in the tobacco industry, until now it has been isolated in the Australian market. With this new ruling in the UK and Ireland, we anticipate plain packaging legislation to pass in other major markets in the near future. By our estimate, plain packaging in Australia has cut down on smoking prevalence by 45% since its introduction to the market four years ago. This legislation will make the operating environment much more challenging for the tobacco industry moving forward. Watch the video for complete insights.
Continue reading "What does the Plain Pack Ruling mean for the UK and Irish Tobacco Markets?" »