IESE Insight
Which Countries Are Most Attractive for Food & Beverage Industry?
Jaume Llopis; Júlia Gifra; Maria Puig
Editor: IESE
Artículo basado en: Vademecum on Food and Beverage Markets 2013
Año: 2013
Idioma: English

The food and beverage industry is one of the sectors offering the most growth potential for economic recovery in Europe, particularly in Spain.

Recognizing this, IESE has published a "Vademecum on Food and Beverage Markets," which contains practical data on different country markets, to serve as a useful starting point for companies in choosing potential markets.

The handbook was launched as part of the 17th Food and Beverage Industry Meeting held at IESE Barcelona in June 2013 under the theme of "Selling Across Continents." It was prepared by IESE's Jaume Llopis, Júlia Gifra and Maria Puig, with sponsorship from Deloitte, "la Caixa" and FIAB (the Spanish Food and Drink Industry Federation).

Seeing the World Market
The food and beverage industry is a decisive pillar of the European economy, accounting for annual revenues of more than 956 billion euros, more than 4 million employees (representing 15 percent of all E.U. employment) and import and export volumes of 56 and 65 billion euros, respectively.

In Spain, the industry carries considerable weight, with the participation of some 30,000 companies, annual consumption amounting to 94 billion euros, and half a million people employed in the sector.

The industry's exports have shown positive growth since the mid-1990s, indicating that globalization has been happening in the industry as part of an ongoing, long-term effort, and not just in reaction to the recent effects of the recession on domestic demand.

In 2012, the food and beverage industry exported products worth more than 22 billion euros, accounting for nearly 10 percent of Spain's total exports and reflecting an increase of 9.4 percent with respect to 2011. This is nearly three times the increase in Spanish exports as a whole.

Against this backdrop, the first question companies should ask themselves is: Which markets are of interest for exporting and selling food and beverage products? Once identified, what kind of market information is relevant to guiding this strategic plan?

Country Selection Criteria
The decision to export depends on many factors. The important thing is to have sufficient information to justify whether or not there are objective conditions for the industry in a particular country.

Since consumption is one of the main sources of demand for the food and beverage industry, the authors defined three classification variables that demonstrate the market attractiveness of certain countries for this particular industry.

  • Annual consumer expenditure on food and beverages.
  • Per capita consumer expenditure on food and beverages.
  • Number of middle-class households, defined using annual disposable income data, which implies a certain level of purchasing power.
Data on these three indicators are available for 86 countries. Taking the top 30 countries, the authors found that 10 met the selection criteria for all three indicators, while 18 met the selection criteria for two indicators. These 28 countries would seem to offer minimum consumption requirements for the food and beverage industry.

The "Vademecum" contains country profiles with relevant 2012 data to evaluate the market opportunities available in each country. It also includes institutional contacts for exhibitions and fairs, trade and industry associations, and information on customs and duties. Countries are ranked by consumer expenditure, prices and middle-class households.

This should serve as a practical tool for broadening and perfecting globalization processes in the food and beverage industry. IESE intends to continue expanding the data to include more countries and make it as complete as possible in future editions.

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