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  Hunger for Growth Abroad? Finding New Markets for Food and Drink 

Llopis, Jaume; Gifra, Júlia; Pasamón, Fernando; Puig, María
Which country is the most attractive market in the world for food and drink exporters?

A study by IESE and Deloitte says it's not the country with the largest overall population (China), nor with the largest number of middle-class households (also China). Nor is it the country with the highest GDP per capita (Luxembourg), nor the highest food-and-beverage spending per capita (Norway). And it's not the country ranked highest for its ease of doing business and legal safeguards (Singapore).

Of all the countries analyzed by the latest Food and Beverage Attractiveness (FBA) index, the good ol' United States sits on top for its continued appetite for the world's food and beverage offerings. That said, all six indicators mentioned above are included to calculate the U.S. and each country's FBA score for 2015.

Top 10 on the Food and Beverage Attractiveness (FBA) Index


After the United States comes China, home to 1.37 billion with a rapidly growing middle class, which grew more than 10 percent last year to 232 million households. Third place is occupied by Germany, as it was last year.

Europe is the continent that dominates the top 10 overall, with five entries: Germany (third), the United Kingdom (fifth), France (seventh), the Netherlands (eighth) and Italy (ninth). Asia has three entries: China (second) plus Japan (fourth) and India (sixth). In North America, Canada moves up one spot from last year to sit at tenth place. Notably, of the top 10, the first eight maintained their positions of last year.

North America, Europe and Asia Take the Top Spots


In the top 20 entries, Australia (18th) is the only country not hailing from Europe, Asia or North America. Next comes United Arab Emirates (21st).

Within Africa, the most attractive export markets are South Africa (52nd), Egypt (56th) and Nigeria (61st).

Climbers and Shakers
Notably, Nigeria climbed the most -- 13 spots -- in just one year among all 82 countries for which complete data was available for all six indicators used to construct the FBA. Nigeria's gains stemmed mostly from growth in its middle class population and its food and beverage imports. The second biggest mover was the Czech Republic -- up 12 spots to 36th. The Czech Republic saw very significant gains in its legal framework as well as in its imports.

Turkey's gains were also notable, although it only moved up one spot in the rankings to 38th. Turkey scored significantly higher for its legal framework, while its number of middle-class households also grew. That said, its consumer spending on food per capita slipped slightly while its GDP per capita also dropped.

In the Middle East, the hunger for food imports is growing in Saudi Arabia, ranked second in the region and 29th overall. That said, Saudi Arabia slipped six spots year-over-year as its ease-of-doing-business ranking fell.

In Asia, South Korea also bears mention. In the 20th position, South Korea was a top performer (fifth) globally for its ease of doing business / legal framework. At the same time, its economy, spending and middle class also inched up.

Finally, Mexico is notable for being Latin America's leading food and drink market, with an improving legal framework and increased import volume. For the FBA index, Mexico was ranked 16th overall and third within the Americas.

Who Is Hungry for What?
Homing in on imports by category reveals interesting trends. Last year, the United States was the top importer of every kind of beverage featured in the study. But in the wine category, the United Kingdom moved into the top spot this year, with U.K. wine imports climbing over 21 percent to nearly $6 billion. That climb may be spurred by the relatively weak euro vis-à-vis the British pound, making those French and Italian labels more appealing, combined with more wine from the New World.

In food, the United States' appetite for certain imports seems to growing while Japan's seems to be waning. In the fish category, imports to the United States grew 8 percent while those to Japan dropped 15 percent. As a result, the United States and Japan swapped spots, as Number 1 and 2, respectively. The United States also displayed an impressive hunger for bakery and cereal imports, as its imports in this food category surged nearly 16 percent. Japan's dropped 2 percent.

Over in the dairy-and-eggs category, Germany sits on top of the world for its volume of imports. In fats and oil imports, China is Number 1. For meat imports, Japan consumes the most. For most other categories, the United States is the hungriest, which is how it earned the top ranking for the weighted FBA overall.

Opening Up to New Food Markets
IESE and Deloitte have teamed up for the third year running to produce the Vademecum on Food and Beverage Markets 2015, featuring the FBA index and detailed country profiles for 34 of the most attractive markets around the world, as ranked by the index.

The study was supervised by IESE professor Jaume Llopis. It was carried out by IESE's Industry Meetings Department, coordinated by director María Puig and lead researcher Júlia Gifra, in collaboration with a team from the consultancy Deloitte, led by Fernando Pasamón of Deloitte in Spain.

The Vademecum is intended as a practical guide for companies located in any country looking to export abroad within the food and beverage sector.

New in 2015: Looking to 2025
The Vademecum on Food and Beverage Markets 2015 includes data from the previous two years, updated to facilitate year-to-year comparisons and spot trends. New in 2015 are population projections to help understand the potential consumer markets for 2025.

In the 34 country profiles, "population pyramids" are presented for both 2015 and 2025, illustrating the potential consumer markets now and for the future broken down by both age and gender. These demographic bar charts look like pyramids when a population is growing, but they appear precariously balanced when a population is shrinking.

Index Ingredients
The FBA index was constructed using six indicators with various weightings, adding up to a possible score of 100. The six indicators are based on data from the IMF, World Bank, the UN and Euromonitor International. Top weightings for the FBA index were placed on import volumes (40 percent), followed by population (25 percent). Weighted scores were determined by the study's authors together with industry leaders and members of the IESE Advisory Board Council for the Food and Beverage Industry Meeting hailing from the business world.

IESE's 19th Food and Beverage Industry Meeting, held at IESE's Barcelona campus on May 26, 2015, provides participants with the latest 361-page Vademecum on Food and Beverage Markets and more industry insights. While the past three reports have been presented in Barcelona, the 2014 edition was also presented to the 1st Food and Beverage Industry Meeting IESE organized jointly with IPADE in Mexico City in February 2015.
This article is based on:  Vademecum on Food and Beverage Markets 2015
Year:  2015
Language:  English
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