Packaged Food in the Philippines

PACKAGED FOOD IN THE PHILIPPINES Euromonitor International April 2015

PACKAGED FOOD IN THE PHILIPPINES

LIST OF CONTENTS AND TABLES Executive Summary ................................................................................................................ ..... 1 Economy Continues To Benefit Packaged Food in the Philippines in 2014 .............................. 1 Increasingly Busy and Faster-paced Lifestyles Influence Packaged Food Consumers ............ 1 Multinationals Continue To Dominate Competition in Packaged Food ..................................... 1 Distribution of Packaged Food Continues To Be Dominated by Modern Grocery Retailers ..... 1 Packaged Food Expected To Continue on Positive Growth Trend for the Forecast Period ...... 1 Key Trends and Developments .................................................................................... ................ 2 Modern Grocery Channels Continue To Grow i n Number ........................................................ 2 Improving Economic Condition Encourages Foreign Brands To Enter Packaged Food ........... 3 Increasingly Busy Lifestyles Continues To Benefit Packaged Food in 2014 201 4............................. 4 Growingly Sophisticated Consumers Lead To Opportunities for New Product Developments . 5 Foodservice – Key Trends and Developments ............................................................. ................ 5 Headlines............................................................ ................................................................. ..... 5 Trends – Sales To Foodservice ........................................................... ..................................... 5 Trends –foodservice ...................................................... ........................................................... 6 Prospects............................................................ ................................................................. ..... 6 Category Data .......................................................................................................................... 7 Table 1 Table 2 Table 3 Table 4

Foodservice Sales of Packaged Food by Category: Volume 20092014 ............................................................. ................................................ 7 Foodservice Sales of Packaged Food by Category: % Volume Growth 2009-2014 ............................................................... ..................................... 7 Forecast Foodservice Sales of Packaged Food by Category: Volume 2014-2019 ............................................................... ..................................... 8 Forecast Foodservice Sales of Packaged Food by Category: % Volume Growth 2014-2019 .................................................................. ........ 8

Impulse and Ingulgence Products – Key Trends and Developments ........................................... 9 Headlines............................................................ ................................................................. ..... 9 Trends ...................................................................................................................................... 9 Competitive Landscape .......................................................................................................... 10 Prospects............................................................ ................................................................. ... 11 Category Data ........................................................................................................................ 12 Table 5 Table 6 Table 7 Table 8 Table 9 Table 10 Table 11

Sales of Impulse and Indulgence Products by Category: Volume 2009-2014 ............................................................... ................................... 12 Sales of Impulse and Indulgence Products by Category: Value 2009 2014 ............................................................. .............................................. 13 Sales of Impulse and Indulgence Products by Category: % Volume Growth 2009-2014 .................................................................................. ... 13 Sales of Impulse and Indulgence Products by Category: % Value Growth 2009-2014 .................................................................................. ... 13 NBO Company Shares of Impulse and Indulgence Products: % Value 2010-2014 ............................................................... ................................... 14 LBN Brand Shares of Impulse and Indulgence Products: % Value 2011-2014 ............................................................... ................................... 15 Forecast Sales of Impulse and Indulgence Products by Category: Volume 2014-2019 ..................................................................................... 15

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LIST OF CONTENTS AND TABLES Executive Summary ................................................................................................................ ..... 1 Economy Continues To Benefit Packaged Food in the Philippines in 2014 .............................. 1 Increasingly Busy and Faster-paced Lifestyles Influence Packaged Food Consumers ............ 1 Multinationals Continue To Dominate Competition in Packaged Food ..................................... 1 Distribution of Packaged Food Continues To Be Dominated by Modern Grocery Retailers ..... 1 Packaged Food Expected To Continue on Positive Growth Trend for the Forecast Period ...... 1 Key Trends and Developments .................................................................................... ................ 2 Modern Grocery Channels Continue To Grow i n Number ........................................................ 2 Improving Economic Condition Encourages Foreign Brands To Enter Packaged Food ........... 3 Increasingly Busy Lifestyles Continues To Benefit Packaged Food in 2014 201 4............................. 4 Growingly Sophisticated Consumers Lead To Opportunities for New Product Developments . 5 Foodservice – Key Trends and Developments ............................................................. ................ 5 Headlines............................................................ ................................................................. ..... 5 Trends – Sales To Foodservice ........................................................... ..................................... 5 Trends –foodservice ...................................................... ........................................................... 6 Prospects............................................................ ................................................................. ..... 6 Category Data .......................................................................................................................... 7 Table 1 Table 2 Table 3 Table 4

Foodservice Sales of Packaged Food by Category: Volume 20092014 ............................................................. ................................................ 7 Foodservice Sales of Packaged Food by Category: % Volume Growth 2009-2014 ............................................................... ..................................... 7 Forecast Foodservice Sales of Packaged Food by Category: Volume 2014-2019 ............................................................... ..................................... 8 Forecast Foodservice Sales of Packaged Food by Category: % Volume Growth 2014-2019 .................................................................. ........ 8

Impulse and Ingulgence Products – Key Trends and Developments ........................................... 9 Headlines............................................................ ................................................................. ..... 9 Trends ...................................................................................................................................... 9 Competitive Landscape .......................................................................................................... 10 Prospects............................................................ ................................................................. ... 11 Category Data ........................................................................................................................ 12 Table 5 Table 6 Table 7 Table 8 Table 9 Table 10 Table 11

Sales of Impulse and Indulgence Products by Category: Volume 2009-2014 ............................................................... ................................... 12 Sales of Impulse and Indulgence Products by Category: Value 2009 2014 ............................................................. .............................................. 13 Sales of Impulse and Indulgence Products by Category: % Volume Growth 2009-2014 .................................................................................. ... 13 Sales of Impulse and Indulgence Products by Category: % Value Growth 2009-2014 .................................................................................. ... 13 NBO Company Shares of Impulse and Indulgence Products: % Value 2010-2014 ............................................................... ................................... 14 LBN Brand Shares of Impulse and Indulgence Products: % Value 2011-2014 ............................................................... ................................... 15 Forecast Sales of Impulse and Indulgence Products by Category: Volume 2014-2019 ..................................................................................... 15


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Table 12 Table 13 Table 14

Forecast Sales of Impulse and Indulgence Products by Category: Value 2014-2019 ............................................................... ......................... 16 Forecast Sales of Impulse and Indulgence Products by Category: % Volume Growth 2014-2019 .................................................................. ...... 16 Forecast Sales of Impulse and Indulgence Products by Category: % Value Growth 2014-2019 ............................................................. .............. 16

Meal Solutions – Key Trends and Developments......................................................... .............. 17 Headlines............................................................ ................................................................. ... 17 Trends .................................................................................................................................... 17 Competitive Landscape .......................................................................................................... 18 Prospects............................................................ ................................................................. ... 18 Category Data ........................................................................................................................ 19 Table 15 Table 16 Table 17 Table 18 Table 19 Table 20 Table 21 Table 22 Table 23 Table 24

Sales of Meal Solutions by Category: Volume 2009-2014 ......................... 19 Sales of Meal Solutions by Category: Value 2009 -2014 ............................ 19 Sales of Meal Solutions by Category: % Volume Growth 2009-2014 ......... 19 Sales of Meal Solutions by Category: % Value Growth 2009-2014 ............ 20 NBO Company Shares of Meal Solutions: % Value 2010-2014 ................. 20 LBN Brand Shares of Meal Solutions: % Value 2011-2014 ........................ 21 Forecast Sales of Meal Solutions by Category: Volume 2014-2019 .......... 22 Forecast Sales of Meal Solutions by Category: Value 2014 -2019 ............. 22 Forecast Sales of Meal Solutions by Category: % Volume Growth 2014-2019 ............................................................... ................................... 22 Forecast Sales of Meal Solutions by Category: % Value Growth 20142019 ............................................................. .............................................. 23

Nutrition/staples – Key Trends and Developments....................................................... .............. 23 Headlines............................................................ ................................................................. ... 23 Trends .................................................................................................................................... 23 Competitive Landscape .......................................................................................................... 24 Prospects............................................................ ................................................................. ... 25 Category Data ........................................................................................................................ 26 Table 25 Table 26 Table 27 Table 28 Table 29 Table 30 Table 31 Table 32 Table 33 Table 34

Sales of Nutrition/Staples by Category: Volume 2009-2014 ....................... 26 Sales of Nutrition/Staples by Category: Value 2009-2014.......................... 2009-2014.......................... 27 Sales of Nutrition/Staples by Category: % Volume Growth 2009-2014 ...... 27 Sales of Nutrition/Staples by Category: % Value Growth 2009 -2014 ......... 27 NBO Company Shares of Nutrition/Staples: % Value 2010-2014 .............. 28 LBN Brand Shares of Nutrition/Staples: % Value 2011-2014 ..................... 29 Forecast Sales of Nutrition/Staples by Category: Volume 2014-2019 ........ 29 Forecast Sales of Nutrition/Staples by Category: Value 2014-2019 ........... 30 Forecast Sales of Nutrition/Staples by Category: % Volume Growth 2014-2019 ............................................................... ................................... 30 Forecast Sales of Nutrition/Staples by Category: % Value Growth 2014-2019 ............................................................... ................................... 31

Market Data ............................................................ ................................................................. ... 31 Table 35 Table 36 Table 37 Table 38 Table 39 Table 40

Sales of Packaged Food by Category: Volume 2009-2014 ........................ 31 Sales of Packaged Food by Category: Value 2009-2014 ........................... 32 Sales of Packaged Food by Category: % Volume Growth 2009 -2014 ....... 32 Sales of Packaged Food by Category: % Value Growth 2009-2014 .......... 33 GBO Company Shares of Packaged Food: % Value 2010-2014 ............... 33 NBO Company Shares of Packaged Food: % Value 2010-2014 2010 -2014 ............... 34


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Table 41 Table 42 Table 43 Table 44 Table 45 Table 46 Table 47 Table 48

LBN Brand Shares of Packaged Food: % Value 2011-2014 ...................... 35 Penetration of Private Label by Category: % Value 2009-2014 ................. 36 Distribution of Packaged Food by Format: % Value 2009-2014 ................. 36 Distribution of Packaged Food by Format and Category: % Value 2014 ............................................................. .............................................. 37 Forecast Sales of Packaged Food by Category: Volume 2014-2019 ......... 39 Forecast Sales of Packaged Food by Category: Value 2014 -2019 ............ 40 Forecast Sales of Packaged Food by Category: % Volume Growth 2014-2019 ............................................................... ................................... 40 Forecast Sales of Packaged Food by Category: % Value Growth 2014-2019 ............................................................... ................................... 41

Definitions............................................................... ................................................................. ... 41 Sources ....................................................... ................................................................. .............. 41 Summary 1

Research Sources ............................................................. ......................... 41


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PACKAGED FOOD IN THE PHILIPPINES EXECUTIVE SUMMARY

Economy Continues To Benefit Packaged Food in the Philippines in 2014 Philippine packaged food continued to benefit from improving economic conditions over the review period. The positive economic environment not only helped consumer confidence, but also generally widened purchasing options for consumers. With more and more consumers able to afford and purchase products across various price segments, purchasing options generally widened not just in terms of price but also as manufacturers strived to increase their competitiveness through increased flavour offerings.

Increasingly Busy and Faster-paced Lifestyles Influence Packaged Food Consumers The positive economic environment led to increasingly busy lifestyles for Filipinos. While this may have brought in increased purchasing power for these consumers, the faster-paced lifestyles also greatly influenced purchasing decisions. Not only was it increasingly important to be able to source products through more accessible and convenient retail outlets, the response to increasingly busy lifestyles was also seen in product innovations not just i n terms of packaging, but also the products themselves.

Multinationals Continue To Dominate Competition in Packaged Food The competitive environment of packaged food in the Philippines continued to be dominated by multinationals. While local competitors do take the lead in certain sectors and product categories, the leading players in packaged food were generally able to maintain their positions towards the end of the review period. Nestlé Philippines Inc, the local arm o f Nestlé SA, retained its lead in packaged food overall, owed highly to their strong lead in dairy and baby food. Alongside strengthening their product portfolio through effective marketing campaigns, their focus on wellness also benefits from the growing health consciousness trend.

Distribution of Packaged Food Continues To Be Dominated by Modern Grocery Retailers The strength of modern grocery retailers as a retail channel for packaged food continued to grow towards the end of the review period, as well as contributing to the loss of share for traditional channels. Large retailers such as SM Retail and Puregold Price Club have supermarkets alone grow even further in strength as the leading retail outlet. These players expanded not only in terms of geographical reach across the country, but also made efforts to address changing consumer spending habits.

Packaged Food Expected To Continue on Positive Growth Trend for the Forecast Period Packaged food is expected to continue growing positively over the forecast period. W ith many of its main products such as dairy, oils and fats and bakery reaching maturity, this may be a t a


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slower pace especially the medium-term. Improving economic conditions will continue to increase purchasing power and overall spending, but manufacturers are then faced with the challenge to be able to continuously adapt to changing consumer needs, as well.

KEY TRENDS AND DEVELOPMENTS

Modern Grocery Channels Continue To Grow in Number Major supermarket chains remain aggressive in their expansion of outlets with a particular focus on areas in the country which lack modern grocery channels. As their network of outlets grows, consumers increasingly prefer these channels which offer better convenience being a one-stop shop for all their packaged food needs. Consumers are also becoming more discerning as their buying capacity improves brought about by better employment opportunities that developments in the country’s economy provides. As such, the value sales contribution of modern grocery retailers in 2014 marginally improved to hold 51% share, while t raditional grocery retailers declined to rest at 45%. To facilitate their growth, established companies either enter into joint a venture, franchising agreement or acquire independent/small players. For instance, Varejo Corp, a subsidiary of Ayala Land Inc entered into a joint venture with Estenso Equities Inc, a subsidiary of Puregold Price Club Inc, to build a new brand of supermarkets to cater to the ABC income brackets. Robinsons Supermarket Corp, meanwhile, acquired Eurogrocer in 2013 giving it full ownership to its six supermarkets in Tarlac. Puregold Price Club Inc, on the other hand, b ought a total of 40 stores since 2012 and is on the second year of its 5-year plan to set up at least 25 new stores annually. SM Retail Inc is also expanding aggressively and plans to erect a minimum of 20 Savemore Markets and SM Hypermarkets outside of Metro Manila in 2 014. SM Investments Corp, meanwhile, acquired a 34% stake in CityMall Commercial Centers Inc, a subsidiary of DoubleDragon Properties Corp. This will give SM an access to CityMalls’ network of outlets to be located mostly in Visayas and Mindanao. Aside from supermarkets and hypermarkets, convenience store brands also increased. After Ayala Land Inc introduced the Japanese brand, Family Mart in 2013, Puregold Price Club Inc entered into an agreement with the Japanese retailer, Lawson Inc, in 2014 to put up a chain of convenience stores in the country. Lawson which owns the brands, Lawson, Lawson Store 100 and Natural Lawson will take 30% of the joint venture while the remainder will be owned by Puregold. These modern grocery channels pose more of a threat to other grocery retailers such as sari-sari stores since some of the outlets are situated near residential neighbourhoods. Also, the availability of hot meals or snacks through convenience stores and its 24-hour operation gives the channel an edge over sari -sari stores which do not provide such a service. Improvements, meanwhile, are also carried out by upscale retailers. Rustan’s Supermarket, for instance, opened the Marketplace in its outlet in Rockwell, Makati which carries imported brands, artisanal and gourmet products. Other new high-end stores include Epicurious, Vom Fass and Lartizan which all raised the bar in the retail of packaged food. Outlook The establishment of modern grocery channels is likely to be more aggressive in suburban areas or in fast-developing provinces over the forecast period. Companies are likely to focus on areas outside of Metro Manila which have a fl ourishing business process outsourcing industry, thriving real estate development or lively tourism-related activities. Retailers in urban areas, meanwhile, are likely to improve their customer service and focus on providing consumers with a better over-all shopping experience. Aside from bricks-and-mortar stores, non-store retailing, particularly online channels, is also likely to witness improvements over the forecast period. In


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2014, SM Investments Corp made known its plan to launch a full-scale e-commerce website by 2016 to complement its retail operations. This has the potential to attract other companies to venture as well into online retailing and encourage more consumers to try out making purchases through the internet. As outlets of supermarkets, hypermarkets and convenience stores grow, more consumers are expected to shop through these modern grocery channels. Since Filipinos prefer to make frequent small quantity purchases rather than buy less often in b ulk, there are more chances for companies to interact with their customers. Companies can take advantage of the regular trips of shoppers at short intervals to build their brands or sustain recall through in -store promotions. They can also encourage impulse purchases through creative merchandising. Sari-sari stores, meanwhile, are likely to decrease in number especially since competition among convenience store brands is expected to intensify. These traditional grocery channels, however, are not predicted to be totally wiped out. Being situated within residential neighbourhoods, sari-sari stores will remain a convenient channel for small quantity purchases for instances when one unexpectedly runs out of cooking ingredients or other basic necessities for which a trip to the nearest supermarket or convenience store would be impractical.

Improving Economic Condition Encourages Foreign Brands To Enter Packaged Food The improvements in the country’s economic performance are predicted to be sustained in 2014 with predicted GDP growth of 6%. Although this is marginally slower than in 2013 which stood at 7%, the projected GDP growth for 2014 remained promising. This will come as the government remains steadfast in its efforts to make economic reforms to att ract more investors to the country. Growth will also be driven by the thriving business process outsourcing industry which provides better employment for Filipinos and assists in the expansion of the middle class. OFW remittances will also help sustain spending among families. As the purchasing power of consumers improve, they become more discriminating in their product choices. They make upgrades in purchases and become more open to patronising foreign brands. Familiarity with products of international companies is also facilitated by social media and online sources. Cheap airfares and travel packages also made holidays outside the country accessible to more Filipinos allowing them to become acquainted with foreign b rands. This facilitated greater openness for high-tier brands which made the country attractive for foreign companies to venture into. Among the new foreign brands is Cold Stone Creamery which set up shop at Serendra in Bonifacio Global City through a franchise agreement with Arizon Ice Cream Corp. BaskinRobbins, meanwhile, made a comeback in 2014 through a franchise deal with IceDream Inc. Baskin-Robbins re-entered with a wider range of product o fferings to include ice cream cakes, sundaes and beverages, among others, as the market is seemingly more open to pricier brands. American ice cream brand, Blue Bell is another new entrant which was brought to the country by Visfood Corp. Upscale artisanal bakeries, Eric Kayser and Paul Maison De Qualité, also opened stores at Rockwell and SM Aura, respectively. Japanese snack food company, Calbee Inc, meanwhile, entered into a 50:50 joint venture with Universal Robina Corp for the distribution of its products in the market. French company, Groupe Casino, on the other hand, entered into an agreement with Rustan’s Supercenters Inc for the exclusive distribution of its brand, Casino, through Rustan’s and Shopwise outlets. Consumer an d industrial products of Malaysian company, Delima Oil Products Sdn Bhd, meanwhile, are made available through its local partner, Intisari Mulia International Inc.


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Outlook Local companies are likely to pave the way for more foreign brands to enter p ackaged food over the forecast period through franchise deals or distribution agreement with international companies. This will be a favoured strategy by domestic companies who want to take advantage of the vibrant prospects offered by established well-known brands. This will also be a more efficient method of expanding a company’s product portfolio rather than investing in research and development. A greater likelihood of success, meanwhile, is expected to be achieved by international brands which adapt their pr oduct offerings to the purchasing habits or preferences of the locals. The decision of Delima Oil Products Sdn Bhd to offer small packaging sizes, thus, will work well for the company given the popularity of sachets among low-income consumers. Cold Stone Creamery’s inclusion of dried mango and Hany milk chocolate for their mix-ins is also an illustration of efforts by foreign brands to localise their offerings which is expected to facilitate in its acceptance among consumers. The greater availability of fo reign brands will not only improve the product choices of consumers but will also raise their standards and e xpectations. Domestic companies, thus, will be challenged to improve their product offerings as consumers become more discriminating. Local brands which target the middle to upper income groups are expected to be most affected by the influx of foreign brands compared to those which serve the low income segment. Foreign brands are also predicted to have the most impact for impulse and indulgence products since consumers are more open to making upgrades in purchases for these goods which are viewed as affordable luxuries. Local companies, thus, can focus instead on nutrition/staples or meal solutions where price tends to play a more significant role in the purchase decision of consumers. To enhance the appeal of their products to consumers, domestic companies can also make improvements in their packaging with the aim of making dispensing and storage more convenient.

Increasingly Busy Lifestyles Continues To Benefit Packaged Food in 2014 Alongside improving economic conditions, increasingly busy lifestyles also influenced consumer purchasing decisions in 2014. With more people joining the g eneral workforce, packaged food in general is j ust one of the many things that consumers are increasingly able to afford. With less time for preparing, cooking, and even eating food, the convenience offered by packaged food is appealing especially to the growing workforce. Increasingly busy lifestyles have also greatly aided the growth of various food products, especially those that are able to offer increased convenience to consumers. These include canned/preserved food and instant noodles, among many others. Further aiding the growth of these products is their availability in the growing retail channel format, convenience stores, making them available not just in a growing number of locations nationwide, but at any hour of the day due to their 24-hour operations. Outlook With the expected continued performance of the economy in the following years, lifestyles are expected to continue to be busy, even i ncreasingly so. Improving economic conditions are expected to aid the continued growth of packaged food. This is helped as well by the specific business sectors where growth is significant such as business process outsourcing, where convenience is a key factor. Manufacturers may then react accordingly and come up with further innovations in their products to attract increasingly busy consumers. Be it innovations in packaging or new product formats that are easy to prepare or consume, manufacturers may try to tap these growingly busy consumers.


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Growingly Sophisticated Consumers Lead To Opportunities for New Product Developments An increasing demand for variety was aided by not just the exposure of Filipino consumers to more and more products but also their being increasingly able to afford them. With increased income in Filipino households comes not just greater exposure to products from leisurely activities such as travelling, but general interest has also r isen for premium-priced products, especially among affluent households. Middle- and lower-income households also continued to show increased willingness to try new products and variants. New product developments came in the form of not just new products, but new flavours. In sauces, dressings and condiments for example, more and more flavours especially from neighbouring Asian countries, with mixes and sauces increasingly available to add and incorporate into household meals. Innovations included addressing the growing health and wellness trend, which at times placed products at a premium but consumers are growingly able to afford. Consumers now faced with more options have a g reater ability to afford and choose products even beyond price. Outlook With the economic prospects in the upcoming years, it could only be expected that consumers will grow increasingly sophisticated. Not only does growing household income lead to greater freedom in purchasing decisions, consumers will likely be continuously exposed as well to more and more products and product variants. Positive economic prospects could be attractive to many players, both local and international, to growing their reach and market in the Philippines. Not only could players increasingly try to gain a bigger share of the market, this is increasingly attractive as well to foreign brands in growing their reach by exposing more and more Filipino consumers to their products. Factors such as flavour and variety will continue to g ain significance, leaving not just price as the only driver for purchasing decisions.

FOODSERVICE – KEY TRENDS AND DEVELOPMENTS

Headlines 

Foodservice continues with a positive performance in 2014

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Frozen processed poultry continues to record the highest growth in 2014 of 6%

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The slowest growth in 2014 was by other RTE cereals, which contracted by 6%

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The number of foodservice outlets increases by 1% in 2014

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Foodservice is expected to continue on an upward growth trend over the forecast period

Trends – Sales To Foodservice 

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Improving economic conditions continued to benefit consumer foodservice in the Philippines over the review period. Fast food and full-service restaurants also benefited from increasingly busy lifestyles, with Filipinos being able to eat out more, especially among working professionals. The convenience of eating out also positively contributed to foodservice, with increasingly busy lifestyles along with improving economic conditions. Frozen processed food continued to perform well in 2014, with a 5% increase in foodservice volume sales. This is generally attributable to the popularity of breakfast meals in various chains. One display of the popularity of breakfast food items in foodservice chains was seen


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in KFC. For a limited time period and in certain branches only, KFC offered a breakfast buffet with Filipino breakfast favourites such as frozen processed meat products, usually paired with rice. 

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Frozen processed poultry recorded the highest volume growth of 6%, a popular breakfast food item. Meanwhile, RTE cereals showed the slowest growth, contracting in 2014. This may be linked to the growing popularity of frozen processed meat products, instead. Universal Robina Corp and San Miguel Pure Foods Co Inc, both local companies, continued to be the most prominent companies over the review period. As long established names across industries, their networks allow them to serve everything from the smallest bakeries and makeshift foodservice stalls or carinderias, to their established partnerships with chained consumer foodservice brands. In terms of sauces, dressings and condiments on the other hand, Unilever Foods Philippines (CMC) and Del Monte Pacific Ltd and Southeast Asia Food also continued to be some of the largest suppliers to foodservice players of sauces, d ressings and condiments.

Trends –foodservice 

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Foodservice continued to experience growth in 2014. Aided mostly by increasingly busy lifestyles and even more so, generally improving economic conditions, the frequency of eating-out also increased. The expansion of restaurants as well in key cities nationwide also benefited this growth. The number of consumer foodservice outlets continued on its positive growth in 2014, increasing by 1%. In 2014, foodservice volume sales increased by 3%. Improving economic conditions as well as spending power aided eating-out as it continued to be a favourite pastime, be it for bonding between family members, friends or co -workers. While this volume growth slowed compared to the previous year, the d ifference is marginal and foodservice volume sales continued to be positive. Filipinos continued to generally eat at home, most of the time. There was not much inte rplay between the retail and foodservice segments, as while eating-out at foodservice establishments continued to be increasingly popular, the frequency remained limited not just among families but also working professionals. The two however managed to adapt to similar flavour trends with for example, Korean and Japanese cuisines seen not j ust growing in popularity in terms of the foreign foodservice chains opening in the country, but also these flavours influencing popular packaged food items.

Prospects 

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With economic conditions expected to continue on an upward trend, consumer foodservice can expect to benefit over the forecast period. There remains potential for growth in consumer foodservice, to the benefit of packaged food in the Philippines. These untapped provincial areas could be explored by foodservice players, as eating -out is expected to continue growing in popularity for Filipinos. It is expected that trends witnessed the review period will continue for consume foodservice, with various foreign foodservice chains opening, especially closer to the capital of Metro Manila. These chains, if proven successful over the following years, may also opt to eventually further expand to other key locations nationwide. Positive growth is expected to continue for foodservice volumes over the forecast period, driven mostly by the growing need for convenience, partnered with growing spending power due to improving economic conditions. At the same time, with the presence of chains both foreign and local continuing t o grow across the country, foodservice volume sales are


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expected to be marginally lower alongside the maturity of this market. While growth is still positive, increasing competition may be affecting these outlets, lowering transactions per outlet as consumers are continuously offered more options. 

The challenge is for foodservice companies to remain competitive through these conditions, in order to possibly benefit from the positive climate for growth. Companies may look unique product offerings to cater to niche markets as just one possible way of differentiating themselves. Price will continue to be an important factor for foodservice players, and strengthened partnerships between customers and suppliers will remain key.

Category Data Table 1

Foodservice Sales of Packaged Food by Category: Volume 2009-2014

'000 tonnes

Baby Food Bakery Canned/Preserved Food Chilled Processed Food Confectionery Dairy Dried Processed Food Frozen Processed Food Ice Cream Meal Replacement Noodles Oils and Fats Pasta Ready Meals Sauces, Dressings and Condiments Snack Bars Soup Spreads Sweet and Savoury Snacks Impulse and Indulgence Products Nutrition/Staples Meal Solutions Packaged Food Source:

2009

2010

2011

2012

2013

2014

103.2 33.3 16.6 2.9 49.8 49.8 66.3 4.2 14.3 120.1 16.4 0.3 49.9

104.8 35.3 17.5 2.9 50.6 52.8 74.5 4.3 14.8 126.6 18.3 0.3 51.8

106.5 37.2 18.4 3.0 51.4 54.7 78.9 4.3 15.4 132.2 19.1 0.3 53.7

108.3 39.1 19.3 3.1 52.3 56.7 83.2 4.4 15.9 138.0 20.1 0.3 55.4

110.3 41.0 20.2 3.1 53.1 58.4 87.6 4.5 16.4 144.2 20.8 0.3 57.1

112.4 42.9 21.2 3.2 54.0 59.9 91.9 4.5 16.9 150.9 21.4 0.3 58.8

0.4 3.6 18.4 61.2

0.4 3.6 19.0 62.6

0.4 3.7 19.6 63.9

0.4 3.7 20.0 65.3

0.4 3.8 20.5 66.7

0.4 3.9 20.9 68.2

290.7 166.7 518.1

302.1 179.8 543.8

311.3 188.9 563.5

321.2 197.8 583.7

331.1 206.7 603.9

341.4 215.4 624.4

Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources

Table 2

Foodservice Sales of Packaged Food by Category: % Volume Growth 20092014

% volume growth

Baby Food Bakery Canned/Preserved Food Chilled Processed Food Confectionery


2013/14

2009-14 CAGR

2009/14 Total

1.9 4.6 4.6 2.1

1.7 5.2 5.0 2.1

8.9 28.6 27.9 10.9

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Dairy Dried Processed Food Frozen Processed Food Ice Cream Meal Replacement Noodles Oils and Fats Pasta Ready Meals Sauces, Dressings and Condiments Snack Bars Soup Spreads Sweet and Savoury Snacks Impulse and Indulgence Products Nutrition/Staples Meal Solutions Packaged Food Source:

1.7 2.6 4.9 1.6 3.0 4.6 3.0 2.4 2.9 4.5 1.6 2.0 2.1 3.1 4.2 3.4

1.7 3.8 6.7 1.5 3.5 4.7 5.5 3.0 3.3 4.2 1.3 2.6 2.2 3.3 5.3 3.8

8.6 20.3 38.5 7.6 18.6 25.6 30.6 15.7 17.9 22.7 6.9 13.5 11.4 17.4 29.2 20.5


Table 3

Forecast Foodservice Sales of Packaged Food by Category: Volume 20142019

'000 tonnes


Table 4

2014

2015

2016

2017

2018

2019

112.4 42.9 21.2 3.2 54.0 59.9 91.9 4.5 16.9 150.9 21.4 0.3 58.8

114.7 44.7 22.1 3.3 55.0 61.2 95.7 4.6 17.4 158.0 22.0 0.3 60.3

117.1 46.6 23.0 3.3 55.9 62.5 99.6 4.7 17.9 165.6 22.5 0.3 61.8

119.7 48.5 23.8 3.4 56.9 63.6 103.3 4.8 18.3 173.8 22.9 0.3 63.3

122.5 50.3 24.7 3.5 58.0 64.6 107.0 4.9 18.7 182.6 23.3 0.3 64.7

125.5 52.1 25.5 3.6 59.0 65.5 110.7 5.1 19.1 192.0 23.7 0.3 66.1

0.4 3.9 20.9 68.2

0.5 3.9 21.3 69.6

0.5 4.0 21.6 71.1

0.5 4.0 21.8 72.5

0.5 4.1 22.0 74.1

0.6 4.1 22.3 75.7

341.4 215.4 624.4

352.2 223.7 644.8

363.6 231.8 665.7

375.4 239.9 687.1

388.0 247.6 708.9

401.2 255.4 731.4

Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources

Forecast Foodservice Sales of Packaged Food by Category: % Volume Growth 2014-2019


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% volume growth


2014/15

2014-19 CAGR

2014/19 Total

2.4 3.7 3.3 2.5 1.8 1.4 3.4 2.6 2.0 5.2 1.6 1.7 2.1 6.6 1.4 0.9 2.2 3.4 3.1 3.2

2.2 4.0 3.8 2.4 1.8 1.8 3.8 2.2 2.4 4.9 2.0 1.9 2.4 5.7 1.5 1.3 2.1 3.3 3.5 3.2

11.6 21.7 20.4 12.4 9.2 9.4 20.5 11.4 12.8 27.2 10.6 9.9 12.5 32.0 7.5 6.4 11.0 17.5 18.6 17.2


IMPULSE AND INGULGENCE PRODUCTS – KEY TRENDS AND DEVELOPMENTS

Headlines 

Impulse and indulgence products grows by 6% to reach PHP132 billion in 2014

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Habitual eating of impulse and i ndulgence products during snack time drives demand

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Packaged/industrial pastries records the highest retail value growth in 2014 at 9%

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Unit price of all categories increases in 2014 except for snack bars

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Universal Robina Corp takes the lead with 23% value share in 2014

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Impulse and indulgence products is expected to post a value CAGR of 3% at constant 2014 prices over the forecast period

Trends 

Demand for impulse and indulgence products was sustained in 2014 with value growth of 6% which was marginally faster compared to 2013 at 5%. Despite being a discretionary food item, consumers continued to allot a proportion of their budget to impulse and i ndulgence products since it is customary for them to eat snack foods such as pastries, biscuits or sweet and savoury snacks during their break time. Impulse and indulgence products make relaxation time more pleasing as one nibbles on food that one enjoys or is rich in flavour. Whether it is at home, office or school, individuals of varying demographic profiles strongly associate snack


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time or break time with eating impulse and indulgence products which also helps one get by between main meals. 

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Packaged/industrial pastries recorded the most vibrant performance in 2014 with value growth of 9%. This was attributable to the innovations and differentiated product offerings which led to renewed consumer interest for packaged/industrial pastries as a snack food. A mong the new product offerings for 2013 was the ‘cronut’ which caught the attention of consumers as a healthier version of the deep fried doughnut. International brands, Krispy Kreme and J Co Donut, however, were still able to drive demand with their differentiated products to assist the growth of packaged/industrial pastries in 2014. While these are mainly patronised by well-off consumers, the expansion in outlets of leading bake shops, Goldilocks and Red Ribbon, were instrumental for improving the accessibility of packaged/industrial pastries among mass market consumers. Snack bars recorded a dismal performance in 2014 with a value sales decline of 8%. The poor performance of snack bars is due to the limited product distribution and few brand choices available to consumers. Local companies are not keen on introducing snack bars due to its unpopularity. Bread or rice with viand is commonly taken for breakfast while biscuits, pastries and sweet and savoury snacks are more preferred as snacks. As such, dominant companies in snack bars are multinational players which cater to athletes or fitness fanatics with their energy and n utrition bars distributed mainly through sports specialty stores or health food shops. Supermarkets and other grocery retailers such as sari-sari stores are the key distribution channels for impulse and indulgence products. The continuous expansion in outlets of supermarkets encourages preference for these modern grocery channels as they are increasingly accessible to households. Other grocery retailers such as sari-sari stores, however, remain significant especially for spur of the moment purchases and small quantity requirements given their proximity being usually situated within residential neighbourhoods. No packaging innovations were introduced for impulse and indulgence products in 2013. Companies, however, continued to gravitate towards small packaging sizes to improve the affordability of their products. Consumers generally prefer to purchase small volume quantities so their limited budget can accommodate their various needs. The unit price of various categories is projected to increase by 1-5% in 2014. An exception is snack bars which is likely to record a d ecline in unit price by 2% i n 2014. The moderate increase in unit price will be driven by the upgrades in purchases undertaken by the growing middle class as their buying capacity improves. Companies, on their part, are expected to respond through improved choices of premium-priced products or introduction of imported brands. The unit price of snack bars, meanwhile, will decrease as products widely distributed through supermarkets are economy brands. Companies price their products affordably to stimulate trial of snack bars given the numerous alternative options available to consumers.

Competitive Landscape 

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Universal Robina Corp led other players offering impulse and indulgence products in 2014 with value share of 23%. This is due to the lead attained by its brands in confectionery and sweet and savoury snacks. Its Jack ‘n’ Jill brand, for one, is strong both in confectionery and sweet and savoury snacks. Maxx, meanwhile, is another strong brand for confectionery while Granny Goose contributes to its prominence in sweet and savoury snacks. The company’s products are able to gain the patronage of mass market consumers due to their competitive prices and flavours suited to the ta ste preference of locals. KSK Food Products earned the biggest increase in value sales in 2014 at 2 4%. The company continuously outpaced other players in 2014 to record value sales growth of 15%. KSK’s


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robust growth is driven by the lead of its brand, Boy Bawang, in other sweet and savoury snacks. Aside from being affordably priced, Boy Bawang is able to drive demand as it provides consumers with more flavour choices of the popular snack food, toasted corn bits, which is typically seasoned only with salt and garlic. Through popular local flavours such as adobo, lechon manok and barbecue, among others, Boy Bawang is a ble to provide a new twist to an all -time favourite snack food. 

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Universal Robina Corp and Monde Nissin Corp are the two leading players for impulse and indulgence products. While Universal Robina Corp dominates confectionery and sweet and savoury snacks, Monde Nissin leads in biscuits. A common factor shared by these two companies is their wide product portfolios allowing them to cater to consumers of varying taste preferences. They also make their products accessible to consumers with their wide distribution and affordable prices. Magnum Gold is the latest addition to the Magnum brand and the first one to have a golden coloured white chocolate coating. It is marginally more expensive than other Magnum products which are sold at PHP50 while Magnum Gold retails for PHP55. Although the product was adequately promoted, its high price positioning will limit patronage among well-off consumers while cheaper alternatives will be a preferred option among price conscious individuals. Krispy Liyempo ni Mang Juan was added to the Jack ‘n’ Jill line of product s for sweet and savoury snacks in 2014. It is available in two variants, sarsa (sauce) and toyo, suka at sili (soy sauce, vinegar and chili). The product is able to achieve differentiation having a flavour taken from a popular local dish, liempo (pork belly). This is expected to support the lead of Jack ‘n’ Jill in sweet and savoury snacks as it widens its product offerings to include locally popular flavours.

Promotional events, tri-media and online advertisements are predominantly use by companies to build awareness for their brands. Unilever RFM Ice Cream Inc, meanwhile, stood out with the opening of Magnum Manila café in April 2014 at SM Aura Taguig. The café was erected in order to promote the Magnum brand and is set to operate for only one year. Aside from entrées and ice cream desserts, the café also features a Magnum bar where diners can customise their own Magnum ice cream with a selection of 18 different toppings. Economy brands are able to drive sales through their low prices, wide distribution and significant presence through traditional grocery retailers such as sari-sari stores. Availability through channels frequented by low- income consumers is essential for them to reach their target market. Standard brands, meanwhile, are able to justify their marginally higher prices mainly through their differentiated offerings and reputation for quality. Premium brands, on the other hand, are preferred by a ffluent consumers for their perceived superiority in taste and quality. Private label, on the other hand, is a vailable although very limited in product choices resulting in its negligible market share despite competitive prices. With price remaining a significant consideration in the purchasing decision of consumers, local companies are able to dominate multinational players through their competitively-priced products. Foreign companies, meanwhile, improve the accessibility of their products through the use of small packaging sizes which helps lower the selling price. Foreign companies, in general, are able to serve the needs of middle to upper income consumers while local players create affordable counterparts to cater to mass market consumers aspiring for imported brands which are beyond their budget.

Prospects 

The consumption of impulse and indulgence p roducts during snack time is expected to be sustained over the forecast period. While rice will be continuously preferred for main meals,


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biscuits, pastries and sweet and savoury snacks will be staple snack fo od items. However, there will be greater preference for biscuits which will outpace other impulse and indulgence products with a value CAGR of 4% at constant 2014 prices and volume CAGR of 5% over the forecast period. The wide product choices, affordability and perception of biscuits as healthy snack options will assist purchases over alternatives which are loaded either with sugar or salt. 

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Impulse and indulgence products is expected to register improvements over the forecast period with a value CAGR of 3% at constant 2014 prices which will be marginally faster that its review period performance which recorded a value CAGR of 1%. The presence of economy brands will allow even those with a limited budget to include impulse and indulgence products on their grocery list even if it is a discretionary food item. The growing middle class and affluent shoppers, meanwhile, will drive the faster value growth through their purchase of imported or premium brands. The growing awareness on the harms of too much salt or sugar in food can pose threats to the growth of impulse and indulgence products. Although consumption is not likely to discontinue altogether, consumers are expected to limit their intake or prefer healthier variants. Opportunities, thus, exist for companies to introduce more healthy alternatives to meet the growing interest among consumers to achieve wellness through their food choices. Companies are likely to improve the formulation of their products especially since the Department of Education seeks to regulate the selling of junk food in schools. T hough implementation is predicted to be weak, companies are expected to bala nce off any unfavourable impact of this regulation by creating fortified or healthy biscuits which could offset any potential decline in volume sales of sweet and savoury snacks. The introduction of new flavour variants or product formats, meanwhile, will remain prevalent for pastries, cakes and ice cream. Small packaging or low volume sizes, on the other hand, will continually be used to improve the affordability especially of stan dard brands. Promotion through social networking sites, meanwhile, will improve while tri-media advertisements will slowly give way as tablets and smartphones are becoming more accessible with the improved availability of low-priced gadgets. Unit price is expected to remain stable over the forecast period. Although some categories are expected to post declines in unit price while others will witness an increase, the movement is minimal and would remain between -2% and 1%. This is indicative of the sustained preference for economy and standard brands. Unit price increases, however, will be recorded for ice cream and cakes which are regarded as an affordable luxury. Consumers are more open to purchasing pricier options for ice cream and cakes especially for social gatherings or special occasions. Snack bars will also witness growth in unit price amidst the dominance of foreign brands especially for energy and nutrition bars which cater to active individuals. Magnum Gold and Jack ‘n’ Jill Krispy Liyempo ni Man g Juan are both likely to attain limited success over the forecast period. Magnum Gold’s high price will be the main hindrance towards wide patronage. Jack ‘n’ Jill’s n ew variant, meanwhile, will remain as one of the options consumers will occasionally purchase to put variety to their snack food choices. Other companies are not expected to create similar offerings. Instead, they will l ikely focus on creating new flavours that will contribute to improved product choices of consumers.


Sales of Impulse and Indulgence Products by Category: Volume 2009-2014

tonnes


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Confectionery Pastries Cakes Biscuits Ice Cream Sweet and Savoury Snacks Snack Bars Impulse and Indulgence Products Source:

Passport

2009

2010

2011

2012

2013

2014

88,018.8 43,624.1 30,085.5 119,204.4 42,755.1 118,875.6 16.8 442,580.4

89,284.9 44,203.1 30,358.2 124,693.4 43,851.7 123,558.3 16.1 455,965.7

87,703.4 44,919.6 30,629.4 130,516.6 45,770.9 128,779.0 8.4 468,327.4

87,925.7 45,692.6 30,901.1 136,996.4 47,877.2 137,466.3 0.7 486,860.2

90,658.0 46,525.9 31,206.2 144,032.3 48,804.8 150,273.7 0.7 511,501.6

93,441.6 47,578.5 31,560.3 151,327.0 49,730.6 159,837.5 0.6 533,476.1


Table 6

Sales of Impulse and Indulgence Products by Category: Value 2009-2014

PHP million


2009

2010

2011

2012

2013

2014

28,808.9 6,093.4 8,302.0 20,038.5 8,176.7 30,367.0 12.6 101,799.0

29,690.3 6,382.2 8,578.2 21,355.2 8,547.8 31,765.0 12.2 106,331.0

29,743.4 6,720.2 8,896.0 22,906.4 8,911.0 33,881.2 6.6 111,064.8

30,404.7 7,103.6 9,202.5 24,735.0 9,405.4 37,177.9 0.9 118,029.9

31,903.5 7,536.0 9,490.9 26,758.8 9,821.0 41,589.9 0.8 127,101.0

33,479.5 8,031.0 9,809.6 28,924.8 10,246.1 45,222.4 0.7 135,714.1


Table 7

Sales of Impulse and Indulgence Products by Category: % Volume Growth 2009-2014

% volume growth


2013/14

2009-14 CAGR

2009/14 Total

3.1 2.3 1.1 5.1 1.9 6.4 -6.3 4.3

1.2 1.8 1.0 4.9 3.1 6.1 -48.0 3.8

6.2 9.1 4.9 26.9 16.3 34.5 -96.2 20.5


Table 8

Sales of Impulse and Indulgence Products by Category: % Value Growth 2009-2014

% current value growth

Confectionery


2013/14

2009-14 CAGR

2009/14 Total

4.9

3.1

16.2

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Pastries Cakes Biscuits Ice Cream Sweet and Savoury Snacks Snack Bars Impulse and Indulgence Products Source:

5.7 3.4 7.6 4.6 8.3 -43.4 5.9

31.8 18.2 44.3 25.3 48.9 -94.2 33.3


Table 9

NBO Company Shares of Impulse and Indulgence Products: % Value 20102014

% retail value rsp Company Universal Robina Corp Monde Nissin Corp Liwayway Marketing Corp Unilever RFM Ice Cream Inc Mondelez Philippines Inc Nestlé Philippines Inc Food Industries Inc Tobi Marketing Inc Republic Biscuit Corp Columbia International Food Products Inc JBC Corp Delfi Foods Philippines Inc Perfetti Van Melle Philippines Inc GFI Enterprises Inc Regent Foods Corp SPI Corp Leslie Corp Wrigley Philippines Inc Goldilocks Bake Shop Inc Procter & Gamble Philippines Inc Hershey Philippines Inc Mars Philippines Inc Big E Food Products Frito-Lay Co Red Ribbon Bake Shop Inc Suncrest Foods Inc San Miguel Pure Foods Co Inc Grand Alphatech International Corp Martinez & Co Inc, Felicisimo Ferrero Group Artisanal Others Total Source:

6.6 3.4 8.1 4.3 8.7 -8.0 6.8

2010

2011

2012

2013

2014

21.3 6.7 4.1 3.7

21.8 6.9 4.2 3.7

22.7 7.0 4.3 3.8

23.8 7.1 4.5 3.8

24.4 7.1 4.6 3.7

3.6 2.7 2.4 2.2 2.2

3.5 2.7 2.4 2.2 2.2

3.5 2.7 2.5 2.3 2.1

3.4 3.4 2.7 2.4 2.3 2.0

3.4 3.4 2.7 2.5 2.3 2.0

1.6 1.6

1.7 1.5

1.7 1.6

1.7 1.6

1.7 1.6

1.7

1.6

1.6

1.6

1.5

1.5 1.5 1.7 1.0 1.7 1.0 0.8

1.5 1.5 1.6 1.0 1.4 1.0 0.9

1.5 1.5 1.5 1.1 1.2 1.1 0.9

1.5 1.5 1.4 1.2 1.2 1.1 1.0

1.5 1.5 1.4 1.2 1.2 1.1 1.0

1.1 0.9 0.8 0.6 0.7 0.7 0.7

1.0 0.9 0.8 0.7 0.7 0.7 0.7

1.0 0.9 0.8 0.7 0.7 0.7 0.7

0.9 0.9 0.8 0.7 0.7 0.7 0.7

0.9 0.8 0.8 0.8 0.7 0.7 0.7

0.6

0.6

0.6

0.6

0.6

0.6

0.6

0.6

0.6

0.5

0.5 6.8 22.8 100.0

0.5 6.7 22.5 100.0

0.5 6.5 21.7 100.0

0.5 6.1 17.7 100.0

0.5 5.8 17.4 100.0



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Table 10

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LBN Brand Shares of Impulse and Indulgence Products: % Value 2011-2014

% retail value rsp Brand

Company

Jack 'n' Jill Sky Flakes Oishi Selecta Nagaraya Tobi Maxx Rebisco Happy Growers Nestlé Leslie's Goldilocks Pringles

Universal Robina Corp Monde Nissin Corp Liwayway Marketing Corp Unilever RFM Ice Cream Inc Food Industries Inc Tobi Marketing Inc Universal Robina Corp Republic Biscuit Corp JBC Corp GFI Enterprises Inc Nestlé Philippines Inc Leslie Corp Goldilocks Bake Shop Inc Procter & Gamble Philippines Inc Perfetti Van Melle Philippines Inc Monde Nissin Corp Delfi Foods Philippines Inc Monde Nissin Corp Universal Robina Corp Regent Foods Corp Monde Nissin Corp Big E Food Products Red Ribbon Bake Shop Inc Mondelez Philippines Inc Wrigley Philippines Inc San Miguel Pure Foods Co Inc Regent Foods Corp Delfi Foods Philippines Inc Grand Alphatech International Corp Martinez & Co Inc, Felicisimo Kraft Foods (Philippines) Inc

Mentos Eggnog Goya Bingo Granny Goose Regent Fita Lemon Square Red Ribbon Oreo Doublemint Magnolia Tempura Knick Knacks Chips Delight La Pacita Oreo Artisanal Others Total Source:

Table 11

2011

2012

2013

2014

18.1 3.6 3.3 3.4 2.7 2.3 2.3 1.8 1.7 1.5 1.6 1.0 1.0 0.9

19.0 3.7 3.5 3.4 2.7 2.3 2.2 1.8 1.7 1.5 1.6 1.1 1.1 0.9

20.1 3.7 3.6 3.3 2.7 2.3 2.1 1.8 1.7 1.5 1.5 1.2 1.1 1.0

20.8 3.8 3.7 3.3 2.7 2.3 2.1 1.8 1.7 1.5 1.5 1.2 1.1 1.0

1.0

1.0

1.0

0.9

0.9 0.9

0.9 1.0

0.9 0.9

0.9 0.9

0.8 0.7 0.9 0.7 0.8 0.7 0.7 0.7

0.8 0.8 0.9 0.8 0.8 0.7 0.7 0.7

0.8 0.8 0.8 0.8 0.8 0.7 0.7 0.7 0.7

0.9 0.9 0.8 0.8 0.8 0.7 0.7 0.7 0.7

0.6 0.5

0.6 0.6

0.6 0.6

0.6 0.6

0.6

0.6

0.6

0.6

0.6

0.6

0.6

0.5

0.6

0.6

-

-

6.7 36.2 100.0

6.5 35.0 100.0

6.1 34.2 100.0

5.8 33.6 100.0

2018

2019


Forecast Sales of Impulse and Indulgence Products by Category: Volume 2014-2019

tonnes 2014


2015

2016

2017

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Passport

93,441.6 47,578.5 31,560.3 151,327.0 49,730.6 159,837.5 0.6 533,476.1

96,347.5 48,826.8 32,014.3 158,280.3 50,724.4 169,495.0 0.6 555,689.0

99,197.5 50,044.0 32,444.8 165,165.2 51,655.2 179,370.1 0.6 577,877.4

102,158.5 51,403.6 32,967.2 172,650.4 52,885.9 189,441.1 0.5 601,507.2

105,269.7 52,858.5 33,557.6 180,767.2 54,392.1 199,648.2 0.5 626,493.9

108,504.7 54,394.4 34,213.0 189,383.8 56,099.3 209,948.8 0.5 652,544.4


Table 12

Forecast Sales of Impulse and Indulgence Products by Category: Value 20142019

PHP million


2014

2015

2016

2017

2018

2019

33,479.5 8,031.0 9,809.6 28,924.8 10,246.1 45,222.4 0.7 135,714.1

34,187.0 8,171.1 9,941.7 30,076.0 10,501.0 47,818.2 0.7 140,695.8

34,870.0 8,305.2 10,072.5 31,219.3 10,749.6 50,448.5 0.7 145,665.7

35,611.7 8,458.5 10,243.7 32,463.5 11,064.1 53,046.8 0.6 150,888.9

36,403.5 8,617.2 10,441.6 33,834.3 11,439.0 55,615.5 0.6 156,351.7

37,226.9 8,784.8 10,655.2 35,303.0 11,858.9 58,118.4 0.6 161,947.7


Table 13

Forecast Sales of Impulse and Indulgence Products by Category: % Volume Growth 2014-2019

% volume growth


2014/15

2014-19 CAGR

2014/19 Total

3.1 2.9 2.0 4.8 3.1 5.2 -3.3 4.2

3.0 2.7 1.6 4.6 2.4 5.6 -4.4 4.1

16.1 14.3 8.4 25.1 12.8 31.4 -20.0 22.3


Table 14

Forecast Sales of Impulse and Indulgence Products by Category: % Value Growth 2014-2019

% constant value growth

Confectionery Pastries


2014/2015

2014-19 CAGR

2014/19 TOTAL

2.3 1.9

2.1 1.8

11.2 9.4

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Cakes Biscuits Ice Cream Sweet and Savoury Snacks Snack Bars Impulse and Indulgence Products Source:

Passport

2.0 4.3 3.7 4.5 -2.5 3.6

1.7 4.1 3.0 5.1 -3.6 3.6


MEAL SOLUTIONS – KEY TRENDS AND DEVELOPMENTS

Headlines 

Meal solutions grows by 3% in retail volume terms

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Growth of meal solutions continues to be driven b y the demand for convenience in 2014

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Ready meals exhibits the highest value growth at 9% for 2014

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Unit price increases for all categories in 2014

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Value share is led by The Purefoods-Hormel Co Inc at 22%

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Meal solutions is predicted to record a value CAGR of 3% at constant 2014 prices for meal solutions over the review period

Trends 

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Alongside improving economic conditions in the country, Filipinos are increasingly experiencing faster-paced lifestyles. Busier lifestyles call fo r greater convenience, which meal solutions benefit from, benefiting categories such as canned/preserved food, frozen processed food, chilled processed food, and more. The positive impact of these fa ctors on this category was evident in the marginal increase in value sales growth for meal solutions in 2014, at 7%. With 5% volume growth and 9% value growth for 2014, ready meals continued to record the fastest growth under meal solutions. A dynamic area, ready meals continue to show much room for growth not just i n terms of competition but also flavours and overall product variety. Meanwhile, sauces, dressings and condiments recorded the slowest volume growth in 2014, and was marginally slower compared to the previous year. A developed area with not much room for growth and much competition already present, sauces, dressings and condiments as the biggest category continued to show moderate growth. While traditional channels such as mom-and-pop sari-sari stores continued to be a highly popular distribution channel for meal solutions, g rowing in popularity as well were modern grocery retailers such as supermarkets and e ven more significantly, convenience stores. With these modern grocery retailers continuously expanding in outlet count and nationw ide reach, their ability to bring these products even closer to the consumers helps them gain even more significance as distribution channels for meal solutions. With unit price increasing for all categories in 2014, the challenge for manufacturers is then to find ways to keep costs low and maintain the affordability of their products. One method was evident in the growing po pularity of stand-up pouches as packaging for meal solutions. Brands such as Hunts Pork ‘n Beans, Mega Sardines and Fresca Tuna offere d their products in smaller sizes using these stand-up pouches.


8.6 22.1 15.7 28.5 -16.8 19.3

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Throughout the years, The Purefoods-Hormel Co Inc was able to maintain its position, leading sales of meal solutions in 2013 and 2014. With 22% value share for meal solutions, its strong lead was maintained by the highly positive performance of its products. Its flagship brand, Purefoods, continued in strength in products such as canned/preserved meat and meat products, chilled processed meat, frozen processed red meat and frozen processed poultry. With consumers remaining loyal to this trusted brand, these are also sectors that witnessed continued growth due to the convenience provided and increasingly busy lifestyles given improving economic conditions. Ranked second in terms of meal solutions, CDO Foodsphere Inc was not left behind, either. Showing the greatest increase in value share for meal solutions overall, it continued to grow i n strength. This domestic player had the advantage as well of its long presence in the business, with its strength in canned/preserved food, chilled processed food, and frozen processed food among many others. Its increase in value share showed the ability CDO Foodsphere Inc has to increasingly gain favour amongst Filipino consumers, even against the top leading brands of The Purefoods-Hormel Co. Considering the products under meal solutions, a key strategy continued to be effective advertising, as witnessed in leading players for meal solutions. Especially for new brands entering the market, effective endorsement is a key factor, usually through partnerships with local celebrities. The continued demand for variety may have called fo r innovation in terms of flavours and product offerings, but gaining the trust and loyalty of consumers. In 2014, some new product developments included the new Del Monte Spaghetti Sauce with Purefoods Tender Juicy Hotdog. Incorporating the very common practice of adding hotdogs into Filipino-style spaghetti, this new sauce by Del Monte Philippines Inc removes the extra step and already adds in the hotdogs to the spaghetti sauce for the consumer. The Purefoods-Hormel Co Inc on the other hand released Purefoods Fun Stuff Nuggets Medley, a mix of its various flavours and varieties of chicken nuggets such as Pepperoni & Cheese, Bacon & Cheese and Cheese Overload in one bag. While imported premium brands continued to be available, meal solutions continued to be dominated by standard products, with consumers generally loyal to their trusted brands. Economy brands also continued to grow in p resence, especially with the growing strength of private label such as SM Bonus, but consumers showed a tendency to remain l oyal to their preferred brands.

Prospects 

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Improving economic conditions as well as the growing need for convenience will continue to benefit meal solutions over the forecast period. With an expected value CAGR of 3% at constant 2014 prices over the forecast period, meal solutions is expected to continue onwards a stable positive growth trend. A potential forecast threat to growth continues to be the growing health consciousness trend among Filipino consumers. While meal solutions provide convenience among many other advantages, its nature as processed food may also hinder its attractiveness to increasingly health-conscious consumers. Companies will likely continue expansion efforts through flavours, especially from Asian cuisines such as Korean and Japanese, which continued to be i ncreasingly popular in the Philippines. The conveniently packed Del Monte Spaghetti Sauce with Purefoods Tender Juicy Hotdog is expected to succeed over the review period, indicated also by ho w competing spaghetti sauce


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player UFC also rushed to make its own version of sauce incorporating hotdogs. Purefoods Fun Stuff Nuggets Medley on the other hand is also expected to see success, following the overall growth of frozen processed poultry products, especially as a popular breakfast item for Filipinos. 

Within meal solutions, ready meals with a value CAGR of 5% at constant 2014 prices is expected to record the best growth over the forecast period. Unit price movement on the other hand may witness a slow decline in the medium-term if companies continued to innovate in terms of packaging, such as smaller pack sizes.


Sales of Meal Solutions by Category: Volume 2009-2014

'000 tonnes

Ready Meals Canned/Preserved Food Frozen Processed Food Dessert Mixes Dinner Mixes Chilled Processed Food Sauces, Dressings and Condiments Soup Meal Solutions Source:

2009

2010

2011

2012

2013

2014

11.6 223.0 102.1 0.4 82.8 187.7

12.0 234.5 105.7 0.4 86.5 195.8

12.6 245.6 111.9 0.4 89.8 203.7

13.1 256.6 116.1 0.4 92.9 210.7

13.8 267.5 119.8 0.4 96.0 217.2

14.4 277.8 123.2 0.4 99.0 223.0

3.9 611.5

4.0 639.0

4.2 668.1

4.3 694.2

4.5 719.1

4.6 742.5


Table 16

Sales of Meal Solutions by Category: Value 2009-2014

PHP million


2009

2010

2011

2012

2013

2014

2,570.0 26,874.1 24,450.9 122.4 14,336.8 20,158.6

2,752.9 28,807.3 25,920.4 128.6 15,053.6 21,239.5

2,960.6 30,976.9 28,148.2 135.6 15,881.6 22,425.2

3,204.4 33,251.3 30,208.5 142.4 16,834.5 23,702.5

3,442.4 35,514.8 32,022.6 149.7 17,878.2 25,016.5

3,758.1 38,300.0 34,320.2 159.4 19,183.3 26,599.3

1,220.3 89,733.1

1,317.1 95,219.4

1,423.7 101,951.8

1,540.4 108,884.0

1,637.8 115,661.9

1,767.2 124,087.5


Table 17

Sales of Meal Solutions by Category: % Volume Growth 2009-2014

% volume growth

Ready Meals Canned/Preserved Food


2013/14

2009-14 CAGR

2009/14 Total

5.0 3.9

4.6 4.5

25.0 24.6

19


Passport

Frozen Processed Food Dessert Mixes Dinner Mixes Chilled Processed Food Sauces, Dressings and Condiments Soup Meal Solutions Source:

2.8 3.5 3.1 2.7 3.9 3.2

3.8 3.2 3.6 3.5 3.4 4.0

20.6 16.8 19.6 18.8 18.0 21.4


Table 18

Sales of Meal Solutions by Category: % Value Growth 2009-2014



2013/14

2009-14 CAGR

2009/14 Total

9.2 7.8 7.2 6.5 7.3 6.3 7.9 7.3

7.9 7.3 7.0 5.4 6.0 5.7 7.7 6.7

46.2 42.5 40.4 30.2 33.8 32.0 44.8 38.3


Table 19

NBO Company Shares of Meal Solutions: % Value 2010-2014

% retail value rsp Company Purefoods-Hormel Co Inc, The CDO Foodsphere Inc Century Canning Corp Pacific Meat Co Inc Unilever Foods Philippines (CMC) Del Monte Philippines Inc Ajinomoto Philippines Corp A Tung Chingco Trading SM Retail Inc New Señorito Frozen Food Co Maunlad Canning Corp Dole Philippines Inc Campbell Soup Co Kraft Foods (Philippines) Inc Superb Catch Inc King Sue Ham & Sausage Co Inc Southeast Asia Food Inc Silver Swan Mfg Corp Inc UFC Philippines Inc


2010

2011

2012

2013

2014

21.7

21.9

22.2

22.3

22.5

6.8 7.0 3.8 5.2

7.1 7.0 3.9 5.2

7.3 7.0 5.6 5.2

7.4 7.0 5.5 5.2

7.6 7.0 5.5 5.2

3.7 4.2

3.8 4.0

3.8 3.9

3.8 3.8

3.8 3.7

2.4 2.3 1.6

2.4 2.3 1.7

2.4 2.3 1.7

2.5 2.3 1.8

2.5 2.4 1.8

1.7 1.6 1.5 1.3

1.6 1.6 1.5 1.3

1.6 1.6 1.5 1.3

1.6 1.6 1.5 1.2

1.6 1.6 1.5 1.2

1.1 1.2

1.1 1.2

1.1 1.2

1.2 1.1

1.2 1.1

1.0 0.9 0.9

1.0 0.9 1.0

1.0 0.9 1.0

1.0 1.0 1.0

1.1 1.0 1.0

20


Sara Lee Corp Alson's Aqua Technologies Inc Del Monte Foods Inc Bambi Foods Mfg Corp Bagumbuhay Industrial Corp HDR Foods Corp Marigold Commodities Corp B2 Maling Foods Corp Nestlé Philippines Inc Ram Food Products Inc Maple Leaf Food Royal Greenland International Del Monte Foods Co Others Total Source:

Passport

1.0 0.7

1.0 0.7

0.9 0.8

0.9 0.8

0.9 0.8

0.9 0.7

0.9 0.7

0.9 0.7

0.8 0.7

0.8 0.8 0.7

0.7 0.6 0.6 0.7 0.4 0.5

0.7 0.6 0.6 0.6 0.5 0.5

0.7 0.6 0.6 0.5 0.5 0.5

0.7 0.6 0.6 0.5 0.5 0.5

0.7 0.6 0.6 0.5 0.5 0.5

0.8 22.6 100.0

0.8 22.2 100.0

0.8 20.1 100.0

0.8 19.8 100.0

19.5 100.0


Table 20

LBN Brand Shares of Meal Solutions: % Value 2011-2014

% retail value rsp Brand Purefoods CDO 555 Argentina Ajinomoto Century Del Monte Knorr Ligo SM Bonus Swift New Señorito Youngstown Lady's Choice Campbell's Seaking King Sue Dole Datu Puti Silver Swan Sara Lee Kraft Sarangani Bay Bambi Del Monte Master Mother's Best


Company Purefoods-Hormel Co Inc, The CDO Foodsphere Inc Century Canning Corp Pacific Meat Co Inc Ajinomoto Philippines Corp Century Canning Corp Del Monte Philippines Inc Unilever Foods Philippines (CMC) A Tung Chingco Trading SM Retail Inc Pacific Meat Co Inc New Señorito Frozen Food Co Maunlad Canning Corp Unilever Foods Philippines (CMC) Campbell Soup Co Superb Catch Inc King Sue Ham & Sausage Co Inc Dole Philippines Inc Southeast Asia Food Inc Silver Swan Mfg Corp Inc Sara Lee Corp Kraft Foods (Philippines) Inc Alson's Aqua Technologies Inc Bambi Foods Mfg Corp Del Monte Foods Inc Bagumbuhay Industrial Corp HDR Foods Corp

2011

2012

2013

2014

21.7

22.0

22.2

22.4

7.1 3.8 3.9 3.8 3.2 3.2 2.8

7.3 3.8 3.7 3.6 3.2 3.2 2.8

7.4 3.8 3.6 3.5 3.2 3.2 2.8

7.6 3.8 3.6 3.5 3.3 3.2 2.9

2.4 2.3 1.7

2.4 2.3 1.9 1.7

2.5 2.3 1.9 1.8

2.5 2.4 1.9 1.8

1.6 1.6

1.6 1.6

1.6 1.6

1.6 1.5

1.4 1.1 1.2

1.4 1.1 1.2

1.3 1.2 1.1

1.3 1.2 1.1

1.1 1.0 0.9 1.0 0.8

1.1 1.0 0.9 0.9 0.8

1.1 1.0 0.9 0.9 0.9

1.1 1.0 0.9 0.9 0.9

0.7

0.8

0.8

0.8

0.9 0.7 0.7

0.9 0.7 0.7

0.8 0.7 0.7

0.8 0.8 0.7 0.7

21


Best Foods

Unilever Foods Philippines (CMC) Marigold Commodities Corp B2 Maling Foods Corp Del Monte Foods Co RFM Corp

Mama Sita Maling Del Monte Swift Others Total Source:

Passport

0.7

0.7

0.7

0.7

0.6 0.6 0.8 1.8 25.1 100.0

0.6 0.6 0.8 24.7 100.0

0.6 0.6 0.8 24.3 100.0

0.6 0.6 24.0 100.0


Table 21

Forecast Sales of Meal Solutions by Category: Volume 2014-2019

'000 tonnes


2014

2015

2016

2017

2018

2019

14.4 277.8 123.2 0.4 99.0 223.0

15.2 287.9 126.3 0.4 101.9 228.2

16.0 297.6 129.1 0.5 104.6 232.6

16.8 307.8 132.1 0.5 107.7 237.5

17.6 318.6 135.5 0.5 111.2 242.9

18.6 330.2 139.1 0.5 115.1 248.7

4.6 742.5

4.8 764.9

5.0 785.2

5.2 807.6

5.4 831.8

5.6 857.8


Table 22

Forecast Sales of Meal Solutions by Category: Value 2014-2019

PHP million


2014

2015

2016

2017

2018

2019

3,758.1 38,300.0 34,320.2 159.4 19,183.3 26,599.3

3,940.3 39,517.5 35,214.3 162.9 19,701.3 27,056.5

4,128.0 40,714.3 36,016.9 166.6 20,159.9 27,424.8

4,335.6 41,982.1 36,931.5 170.6 20,702.8 27,841.2

4,556.4 43,335.0 37,927.1 174.6 21,312.2 28,304.6

4,793.3 44,778.3 38,980.7 178.6 21,981.5 28,812.2

1,767.2 124,087.5

1,826.4 127,419.3

1,882.2 130,492.6

1,941.4 133,905.1

2,003.4 137,613.3

2,071.7 141,596.4


Table 23

Forecast Sales of Meal Solutions by Category: % Volume Growth 2014-2019

% volume growth

Ready Meals Canned/Preserved Food Frozen Processed Food


2014/15

2014-19 CAGR

2014/19 Total

5.3 3.6 2.7

5.2 3.5 2.5

28.6 18.8 12.9

22


Dessert Mixes Dinner Mixes Chilled Processed Food Sauces, Dressings and Condiments Soup Meal Solutions Source:

Passport

3.8 3.4 2.4 3.7 3.1

3.8 3.1 2.2 3.8 2.9

20.7 16.3 11.5 20.3 15.5


Table 24

Forecast Sales of Meal Solutions by Category: % Value Growth 2014-2019



2014/2015

2014-19 CAGR

2014/19 TOTAL

5.2 3.3 2.8 2.3 3.1 1.8 3.4 2.9

5.0 3.2 2.6 2.3 2.8 1.6 3.2 2.7

27.5 16.9 13.6 12.0 14.6 8.3 17.2 14.1


NUTRITION/STAPLES – KEY TRENDS AND DEVELOPMENTS

Headlines 

Nutrition/staples posts 5% value growth to reach PHP234 billion in 2014



Nutrition/staples remains an essential food item despite increasing frequency of dining out



Pasta records the highest value growth in 2014 at 10%



Unit price increases moderately in 2014



Nestlé Philippines Inc dominates nutrition/staples with value share of 18% in 2014



Nutrition/staples is expected to record a value CAGR of 3% at constant 2014 prices over the forecast period

Trends 

The continued expansion of shopping centres is helping to assist the growth of restaurants. With the wide range of choices from budget restaurants to more extravagant ones, consumers can afford to eat out more often without significantly straining their bu dget. Nutrition/staples, however, remained an essential food item which most households cannot do without, despite the rising tendency to dine out. For 2014, nutrition/staples grew by 5% in value terms which was marginally faster than the recorded growth in 2013. This was due to th e price increases in vegetable and seed oil which is troubled by supply issues and the growing number of upscale artisanal bakeries, amongst others. The faster value growth will also be spurred by the willingness of parents to pur chase fortified brands of baby food to ensure their children are receiving the right nutrients


23












Pasta outpaced other area of nutrition/staples in 2014 with value sales increase of 10%. While rice is a staple for regular everyday meals, pasta is a must-have for celebrations. During social gatherings, it is typical for a pasta dish to be included, e specially for birthday parties of children. Thus, while consumers might not have a need for pasta for their everyday meal, a constant demand for it arises whenever there are special occasions. Cheese underperformed in 2014 as it recorded the most sluggish value growth at 2%. This is due to the popularity of affordable processed cheese among consumers and low appreciation for pricier gourmet variants. Cheese is commonly used as a bread spread, an ingredient for cooking dishes such as stews or a garnish for p asta dishes such that spreadable processed cheese and quick melt cheeses are most preferred by consumers. Thus, affordable variants are more widely distributed being p atronised by a greater number of consumers than artisanal cheese. More expensive variants such as Camembert, Brie an d Emmental are unknown to regular households who are unfamiliar with its use in food preparation. Supermarkets was the key distribution channel for breakfast cereals, dairy products, oils and fats, spreads, pasta and rice. The growing nu mber of outlets of supermarket chains makes this modern grocery channel more accessible to households for the purchase of essential food items. Other grocery retailers such as sari-sari stores, meanwhile, are prominent for the distribution of noodles. Being located in neighbourhoods, sari-sari stores are convenient channels for the purchase of noodles by low-income consumers who usually buy per piece as the need arises or whenever their budget will permit. The purchase of baby food and meal replacement products, on the other hand, is more prevalent through health and beauty specialist retailers which carry a more comprehensive range of brands with some drugstores/parapharmacies offering a valuable 24-hour service. Food specialist retailers, meanwhile, is preferred for the purchase of warm and freshly baked bread. There were no significant packaging innovations for nutrition/staples in 2014. It is common, however, for companies to use sachets or pouches to improve the affordability of their products. This is evident for categories such as spreadable processed cheese and vegetable and seed oil. Other companies, meanwhile, offer small packaging sizes in response to the greater preference among consumers to purchase often in small quantities rather than buy less frequently in bulk. Unit price of nutrition/staples is expected to rise moderately in 2 014 with 4% being the highest increase to be recorded for some categories. This is because consumers are expected to prefer low-end or standard brands for everyday food items. The openness for pricier alternatives would usually be more prevalent for occasionally purchased goods such as impulse/indulgence products. Companies, on their part, control their price increases or offer small-sized packaging to maintain consumer preference for their brands.




Nestlé Philippines Inc led nutrition/staples in 2014 with value share of 18%. This is due to the leadership of its brands in baby food excl milk formula and drinking milk products. Its brands are also strong contenders in milk formula, yoghurt and sour milk products, breakfast cereals, other dairy and convalescence. The company’s established reputation f or quality drives consumer preference for its brands. Nestlé also holds numerous promotional activities which improve the positioning of its brands as beneficial for achieving overall wellness. Molino Nicoli SpA exited the market following the cessation i n distribution of its breakfast cereal locally. Its brand, Nicoli Flakes, struggled against those offered by prominent companies such as Kellogg Co and Nestlé Philippines Inc. Unilever Foods Philippines (CMC), meanwhile, lagged behind other players in 2014 declining by 50% following the acquisition of RFM Corp of its pasta brand, Royal.


Passport

24














Successful companies for nutrition/staples are those who are able to provide quality products at reasonable prices. With nutrition/staples being a regularly purchased item, consumers often prefer standard or economy brands. Companies are able to respond to this by utilizing small packaging size which improves the affordability of their products without sacrificing on quality. Fortification or the use of naturally healthy ingredients also helps increase the value of a product and improves its appeal among consumers. Liwayway Marketing Corp expanded its product portfolio with the introduction of Oishi Choco Chug and Oishi Oaties Milk in 2013. These two new brands are the first drinking milk products to contain finely ground oats. Available in 250ml and 1litre brick liquid carton, the product is likely to be received well by youngsters, especially those in need of a healthy breakfast or snack food in a convenient format. The UFC Birthday Pack was launched in 2013 which bundles together dried pasta and pasta sauce, available in 1kg and 500g options. The product’s main benefit is the savings in cost being sold at a lower price than if the two products were purchased separately. As such, the product is likely to be patronised mainly by price- conscious consumers, while the greater majority would opt to have the freedom to choose the pasta sauce to be paired with their dried pasta. Events are widely used for the promotion of various nutrition/staples. Nestlé Philippines Inc, however, is most active in holding events which are centred on promoting wellness. The company, for instance, annually holds the Choose Wellness Expo which ran on its sixth year in 2013. Nestlé also engages consumers through various fitness activities such as Zumba, muay thai, yoga and aqua training, amongst others. Nutritional counselling is also utilised by Nestlé to educate consumers on how to make better food choices. Private label has minimal presence in nutrition/staples and is limited to vegetable and seed oil, hot cereals and p ackaged/industrial bread. As such, economy brands are the best option for consumers with a limited budget. Affordable brands however are just as active as standard brands are in investing in tri-media advertisements, marketing events and social media campaigns. Premium products, meanwhile, often bank on the high equity of their brand to attract affluent shoppers who are more focused on quality, taste or nutritional content rather than price. Multinationals have a marginally bigger value share against local companies in nutrition/staples. Foreign companies have the greater capability to create more innovative products than local companies since several of them have a centralised research and development department. Domestic players, meanwhile, are able to outperform their foreign counterparts in oils and fats where a ffordability is significant for an item such as vegetable and cooking oil which is essential for cooking and can take up a significant proportion of a household’s budget.

Prospects 



Demand for nutrition/staples is expected to be sustained over the forecast period despite the growing number of restaurants in urban areas. Consumers will continue to purchase nutrition/staples to ensure a steady supply of food in a household for instances when eating out is inconvenient such as when there is a heavy downpour of rain. Furthermore, regular eating out is only likely among affluent consumers while regular households are expected to balance this out with the preparing of home cooked food to ensure that their expenses do not exceed their budget. Nutrition/staples is projected to record a value CAGR of 3% at constant 2014 prices over the forecast period which will be marginally better than its review period performance where it posted a value CAGR of 2% at constant 2014 prices. The marginally faster value growth will


Passport

25


Passport

arise as consumers will continually purchase nutrition/staples such as rice, vegetable and seed oil, bread and baby food despite fluctuations in price. Pasta is expected to contribute most to growth which is predicted to record a value CAGR of 6% at constant 2014 prices over the forecast period. The robust value growth of pasta will be driven by the preference to prepare pasta dishes during social gatherings. Pasta will also have the most vibrant increase in volume sales with a CAGR of 5% over the forecast period. The fast volume growth will arise as economy brands, bundle packs and pasta sauces with hotdogs are likely to encourage more frequent cooking of pasta dishes for regular meals as it becomes more affordable and easy to prepare. 









No factors are predicted to significantly threaten the growth of nutrition/staples over the forecast period. Consumers will continuously patronise nutrition/staples, especially rice and vegetable and seed oil which are essentials for everyday food preparation. With no available substitutes, consumers are likely to downgrade to economy brands in the event of price increases or opt for smaller size packaging while t hey find ways to minimise their usage. More healthy variants are likely to be introduced over the forecast period. The increasingly hectic lifestyles of consumers, meanwhile, could encourage the development of more 2-in-1 products or bundle packs which provide convenience and cost savings. Packaging will continue to lean towards small sizes. This will be particularly relevant for new product launches in order to facilitate trial. While advertisements can build brand awareness, incentives through added volume or price discounts are likely to be more effective in driving sales. Consumers are predicted to remain practical rather than patronise brands based on endorsements alone by popular celebrities. Changes in unit price for nutrition/staples will be minimal over the forecast period. The increase will be 1% at most while decreases will not be lower than 2%. This is indicative of the sustained preference for affordable products among consumers. Companies, thus, are likely to keep their prices stable and offer incentives in the form o f price discounts, added volume, bundling and buy-1-take-1 promotions which will remain prominent for bread. Oishi Choco Chug and Oishi Oaties Milk both have the potential to perform well. Prospective consumers are not limited to younger age groups but can include adults as well. The addition of finely ground oats makes it more n utritious as it contains fibre not found in competing drinking milk products. These new launches can encourage other companies to create similar offerings or to find alternative means to achieve differentiation beyond the usual fortification with vitamins and minerals. The UFC Birthday Pack is expected to witness limited success over the forecast period. Aside from price- conscious consumers, only those loyal to the UFC brand will find value to the bundled product. Also, consumers’ desire for variety will limit its purch ase since the bundle restricts one’s choice of pasta sauce. Even if other players create similar offerings, demand for dried pasta and pasta sauces sold separately are unlikely to be significantly affected by such bundles.


Sales of Nutrition/Staples by Category: Volume 2009-2014

'000 tonnes

Bread Breakfast Cereals Dairy


2009

2010

2011

2012

2013

2014

130.6 13.2 340.6

132.0 13.6 351.2

135.6 14.1 362.7

139.5 14.6 376.4

142.2 15.2 388.9

145.0 15.8 399.3

26


Meal Replacement Oils and Fats Baby Food Spreads Pasta Noodles Rice Nutrition/Staples Source:

Passport

1.2 467.3 53.3 14.3 31.7 168.7 90.2 1,311.1

1.3 486.5 53.5 14.4 34.6 178.4 91.5 1,356.9

1.2 506.3 53.6 13.6 35.6 189.4 93.4 1,405.4

1.2 525.0 54.0 12.7 37.8 200.1 95.7 1,456.9

1.3 545.2 54.5 12.7 39.8 210.8 98.5 1,509.1

1.3 564.7 55.5 13.0 41.9 220.6 101.7 1,558.8


Table 26

Sales of Nutrition/Staples by Category: Value 2009-2014

PHP million

Bread Breakfast Cereals Dairy Meal Replacement Oils and Fats Baby Food Spreads Pasta Noodles Rice Nutrition/Staples Source:

2009

2010

2011

2012

2013

2014

13,908.3 3,237.1 60,569.3 1,535.0 39,536.2 30,459.7 3,667.1 2,408.5 19,299.8 4,047.7 178,668.7

14,649.2 3,393.3 67,203.1 1,800.4 41,952.2 31,648.5 3,727.3 2,805.9 20,567.6 4,169.2 191,916.6

15,566.6 3,585.3 70,020.9 1,937.8 44,996.4 32,287.4 3,671.0 2,946.2 22,061.6 4,398.5 201,471.7

16,618.8 3,810.6 72,977.6 2,202.2 48,032.6 32,988.1 3,598.2 3,285.0 23,602.4 4,662.4 211,777.9

17,529.2 4,056.4 76,137.1 2,417.6 50,854.6 34,143.8 3,710.3 3,580.6 25,204.1 4,928.1 222,561.9

18,493.2 4,332.9 79,096.2 2,630.0 54,299.0 35,546.4 3,825.2 3,928.0 27,211.2 5,302.7 234,664.8


Table 27

Sales of Nutrition/Staples by Category: % Volume Growth 2009-2014

% volume growth


Table 28

2013/14

2009-14 CAGR

2009/14 Total

2.0 3.9 2.7 2.9 3.6 1.8 1.8 5.1 4.7 3.3 3.3

2.1 3.7 3.2 2.2 3.9 0.8 -1.9 5.7 5.5 2.4 3.5

11.0 19.7 17.2 11.4 20.8 4.2 -9.3 32.1 30.8 12.8 18.9


Sales of Nutrition/Staples by Category: % Value Growth 2009-2014


Bread


2013/14

2009-14 CAGR

2009/14 Total

5.5

5.9

33.0

27


Passport

Breakfast Cereals Dairy Meal Replacement Oils and Fats Baby Food Spreads Pasta Noodles Rice Nutrition/Staples Source:

6.8 3.9 8.8 6.8 4.1 3.1 9.7 8.0 7.6 5.4

6.0 5.5 11.4 6.6 3.1 0.8 10.3 7.1 5.5 5.6

33.9 30.6 71.3 37.3 16.7 4.3 63.1 41.0 31.0 31.3


Table 29

NBO Company Shares of Nutrition/Staples: % Value 2010-2014

% retail value rsp Company Nestlé Philippines Inc Alaska Milk Corp San Pablo Mfg Corp Mead Johnson Philippines Inc Monde Nissin Corp International Oil Factory San Miguel Pure Foods Co Inc Wyeth Philippines Inc Kraft Foods (Philippines) Inc Fonterra Brands (Phils) Inc SM Retail Inc Universal Robina Corp Yakult Philippines Inc Gardenia Philippines Inc Abbott Laboratories (Phils) Inc RFM Corp UFC Philippines Inc Goldilocks Bake Shop Inc Agana Circle Enterprises Nissin-Universal Robina Corp Quaker Oats Asia Inc MLM Foods Inc Green Spot Co Ltd Malabon Soap & Oil Industrial Co Inc Poms Venture Corp Unilever Foods Philippines (CMC) New Zealand Creamery Inc AB Food & Beverages Philippines Inc AD Gothong Mfg Corp Bongrain SA Royal FrieslandCampina NV Artisanal


2010

2011

2012

2013

2014

18.7 8.0 6.7 7.4

18.6 7.8 6.8 7.2

18.4 7.6 7.0 7.0

18.3 7.5 7.1 7.1

18.1 7.4 7.3 7.2

6.3 5.8 4.5

6.5 5.8 4.6

6.7 5.9 4.5

6.8 5.9 4.5

6.9 6.0 4.5

3.5 3.0

3.5 2.9

3.5 2.9

3.4 2.8

3.4 2.7

2.7

2.7

2.7

2.6

2.4

2.0 1.9 1.9 1.4 1.3

2.1 1.9 1.9 1.6 1.3

2.2 2.1 2.1 1.7 1.3

2.2 2.1 2.1 1.7 1.3

2.3 2.2 2.1 1.7 1.2

0.6 1.1 0.8 0.6 0.6

0.6 1.1 0.8 0.6 0.6

0.6 1.1 0.9 0.6 0.6

0.7 1.1 0.9 0.6 0.6

1.1 1.1 0.9 0.7 0.6

0.6 0.6 0.5

0.6 0.6 0.2 0.5

0.6 0.6 0.3 0.5

0.6 0.6 0.5 0.5

0.6 0.6 0.5 0.5

0.3 1.0

0.4 0.8

0.4 0.7

0.4 0.7

0.4 0.4

0.4 0.3

0.4 0.3

0.3 0.3

0.3 0.3

0.3 0.3

0.3 0.2 0.5 4.1

0.3 0.2 0.3 4.0

0.3 0.2 0.1 4.0

0.3 0.2 3.9

0.3 0.2 3.9

28


Others Total Source:

12.5 100.0

12.2 100.0

12.2 100.0

12.1 100.0

LBN Brand Shares of Nutrition/Staples: % Value 2011-2014

% retail value rsp Brand

Company

Minola Lucky Me Alaska Baguio Bear Brand Milo Lactum

San Pablo Mfg Corp Monde Nissin Corp Alaska Milk Corp International Oil Factory Nestlé Philippines Inc Nestlé Philippines Inc Mead Johnson Philippines Inc Nestlé Philippines Inc SM Retail Inc Universal Robina Corp Yakult Philippines Inc San Miguel Pure Foods Co Inc Gardenia Philippines Inc San Miguel Pure Foods Co Inc Kraft Foods (Philippines) Inc Fonterra Brands (Phils) Inc Mead Johnson Philippines Inc Nestlé Philippines Inc Nestlé Philippines Inc UFC Philippines Inc Wyeth Philippines Inc Nestlé Philippines Inc Goldilocks Bake Shop Inc Fonterra Brands (Phils) Inc Mead Johnson Philippines Inc Wyeth Philippines Inc Mead Johnson Philippines Inc Nestlé Philippines Inc Alaska Milk Corp Abbott Laboratories (Phils) Inc

Nido SM Bonus Payless Yakult Magnolia Gardenia Star Kraft Anchor Enfalac Nestlé Nan UFC Promil Nestogen Goldilocks Anlene Alacta S-26 Enfagrow Chuckie Carnation Ensure Artisanal Others Total

Table 31

12.5 100.0


Table 30

Source:

Passport

2011

2012

2013

2014

6.8 6.5 7.0 5.8 5.7 3.8 3.5

7.0 6.7 6.6 5.9 5.7 3.8 3.4

7.1 6.8 6.5 5.9 5.6 3.8 3.5

7.3 6.9 6.4 6.0 5.5 3.8 3.7

2.4 2.1 1.8 1.9 2.1

2.4 2.2 2.0 2.1 2.1

2.5 2.2 2.1 2.1 2.1

2.6 2.3 2.2 2.1 2.0

1.6 1.7

1.7 1.7

1.7 1.7

1.7 1.7

1.7

1.7

1.7

1.6

1.8

1.8

1.7

1.6

1.4

1.4

1.4

1.3

1.1 1.1 1.1 1.0 1.0 0.8 0.9

1.2 1.1 1.1 1.0 1.0 0.9 0.9

1.2 1.1 1.1 1.0 1.0 0.9 0.9

1.1 1.1 1.1 0.9 0.9 0.9 0.9

0.9

0.9

0.8

0.8

0.8 0.4

0.8 0.4

0.8 0.7

0.8 0.7

0.7 0.8 0.5

0.7 0.8 0.6

0.7 0.7 0.6

0.7 0.7 0.7

4.0 27.2 100.0

4.0 26.8 100.0

3.9 26.1 100.0

3.9 26.1 100.0


Forecast Sales of Nutrition/Staples by Category: Volume 2014-2019


29


Passport

'000 tonnes


2014

2015

2016

2017

2018

2019

145.0 15.8 399.3 1.3 564.7 55.5 13.0 41.9 220.6 101.7 1,558.8

147.7 16.4 409.3 1.4 583.7 56.6 13.2 44.1 230.1 105.4 1,608.0

150.2 17.1 418.4 1.4 601.4 57.6 13.5 46.5 239.2 109.4 1,654.7

152.8 17.8 427.3 1.5 619.6 58.9 13.8 49.0 248.5 113.4 1,702.6

155.6 18.6 435.5 1.5 638.0 60.2 14.1 51.5 258.3 117.4 1,750.7

158.5 19.4 443.1 1.6 656.5 61.7 14.5 54.0 268.5 121.5 1,799.2


Table 32

Forecast Sales of Nutrition/Staples by Category: Value 2014-2019

PHP million


2014

2015

2016

2017

2018

2019

18,493.2 4,332.9 79,096.2 2,630.0 54,299.0 35,546.4 3,825.2 3,928.0 27,211.2 5,302.7 234,664.8

18,990.8 4,482.7 80,714.0 2,742.5 55,668.0 36,419.6 3,825.2 4,153.7 28,142.0 5,477.2 240,615.6

19,499.4 4,642.5 82,395.3 2,868.4 57,039.4 37,272.2 3,834.0 4,399.3 29,019.7 5,675.1 246,645.4

20,054.9 4,824.0 84,299.1 3,009.3 58,529.5 38,231.2 3,865.3 4,648.3 29,914.8 5,866.9 253,243.3

20,658.1 5,023.4 86,379.0 3,165.3 60,132.7 39,264.4 3,916.6 4,905.4 30,810.6 6,063.9 260,319.5

21,310.9 5,239.8 88,609.9 3,335.7 61,848.1 40,397.4 3,984.9 5,163.0 31,739.7 6,267.5 267,896.9


Table 33

Forecast Sales of Nutrition/Staples by Category: % Volume Growth 20142019

% volume growth


2014/15

2014-19 CAGR

2014/19 Total

1.9 4.3 1.7 4.2 2.9 2.4 2.6 4.9 4.0 3.5 2.8

1.8 4.2 2.1 4.0 3.1 2.1 2.2 5.2 4.0 3.6 2.9

9.3 23.1 11.0 21.8 16.3 11.0 11.7 28.8 21.7 19.5 15.4



30


Table 34

Passport

Forecast Sales of Nutrition/Staples by Category: % Value Growth 2014-2019



2014/2015

2014-19 CAGR

2014/19 TOTAL

3.2 4.3 2.6 5.4 2.9 2.9 1.7 5.3 3.0 3.4 2.9

2.9 3.9 2.3 4.9 2.6 2.6 0.8 5.6 3.1 3.4 2.7

15.2 20.9 12.0 26.8 13.9 13.6 4.2 31.4 16.6 18.2 14.2


MARKET DATA Table 35

Sales of Packaged Food by Category: Volume 2009-2014

'000 tonnes

Baby Food Bakery Canned/Preserved Food Chilled Processed Food Confectionery Dairy Dried Processed Food Frozen Processed Food Ice Cream Meal Replacement Noodles Oils and Fats Pasta Ready Meals Sauces, Dressings and Condiments Snack Bars Soup Spreads Sweet and Savoury Snacks Impulse and Indulgence Products Nutrition/Staples Meal Solutions Packaged Food Source: Note:

2009

2010

2011

2012

2013

2014

53.3 336.7 223.0 82.8 88.0 340.6 292.1 102.1 42.8 1.2 168.7 467.3 31.7 11.6 187.7

53.5 344.9 234.5 86.5 89.3 351.2 306.1 105.7 43.9 1.3 178.4 486.5 34.6 12.0 195.8

53.6 355.8 245.6 89.8 87.7 362.7 319.9 111.9 45.8 1.2 189.4 506.3 35.6 12.6 203.7

54.0 367.7 256.6 92.9 87.9 376.4 335.2 116.1 47.9 1.2 200.1 525.0 37.8 13.1 210.7

54.5 379.2 267.5 96.0 90.7 388.9 350.8 119.8 48.8 1.3 210.8 545.2 39.8 13.8 217.2

55.5 391.2 277.8 99.0 93.4 399.3 365.9 123.2 49.7 1.3 220.6 564.7 41.9 14.4 223.0

0.0 3.9 14.3 118.9 442.6

0.0 4.0 14.4 123.6 456.0

0.0 4.2 13.6 128.8 468.3

0.0 4.3 12.7 137.5 486.9

0.0 4.5 12.7 150.3 511.5

0.0 4.6 13.0 159.8 533.5

1,311.1 611.5 2,350.9

1,356.9 639.0 2,437.0

1,405.4 668.1 2,526.5

1,456.9 694.2 2,621.9

1,509.1 719.1 2,722.9

1,558.8 742.5 2,817.1

Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources Sum of categories does not equal total packaged food because of double counting (eg canned soup is included in soups and canned foods)


31


Table 36

Passport

Sales of Packaged Food by Category: Value 2009-2014

PHP bn


2009

2010

2011

2012

2013

2014

30.5 51.6 26.9 14.3 28.8 60.6 26.4 24.5 8.2 1.5 19.3 39.5 2.4 2.6 20.2

31.6 54.4 28.8 15.1 29.7 67.2 28.2 25.9 8.5 1.8 20.6 42.0 2.8 2.8 21.2

32.3 57.7 31.0 15.9 29.7 70.0 30.1 28.1 8.9 1.9 22.1 45.0 2.9 3.0 22.4

33.0 61.5 33.3 16.8 30.4 73.0 32.3 30.2 9.4 2.2 23.6 48.0 3.3 3.2 23.7

34.1 65.4 35.5 17.9 31.9 76.1 34.5 32.0 9.8 2.4 25.2 50.9 3.6 3.4 25.0

35.5 69.6 38.3 19.2 33.5 79.1 37.3 34.3 10.2 2.6 27.2 54.3 3.9 3.8 26.6

0.0 1.2 3.7 30.4 101.8

0.0 1.3 3.7 31.8 106.3

0.0 1.4 3.7 33.9 111.1

0.0 1.5 3.6 37.2 118.0

0.0 1.6 3.7 41.6 127.1

0.0 1.8 3.8 45.2 135.7

178.7 89.7 367.0

191.9 95.2 390.0

201.5 102.0 410.7

211.8 108.9 434.6

222.6 115.7 461.0

234.7 124.1 489.7


Table 37

Sales of Packaged Food by Category: % Volume Growth 2009-2014

% volume growth

Baby Food Bakery Canned/Preserved Food Chilled Processed Food Confectionery Dairy Dried Processed Food Frozen Processed Food Ice Cream Meal Replacement Noodles Oils and Fats Pasta Ready Meals Sauces, Dressings and Condiments Snack Bars


2013/14

2009-14 CAGR

2009/14 Total

1.8 3.2 3.9 3.1 3.1 2.7 4.3 2.8 1.9 2.9 4.7 3.6 5.1 5.0 2.7 -6.3

0.8 3.0 4.5 3.6 1.2 3.2 4.6 3.8 3.1 2.2 5.5 3.9 5.7 4.6 3.5 -48.0

4.2 16.2 24.6 19.6 6.2 17.2 25.3 20.6 16.3 11.4 30.8 20.8 32.1 25.0 18.8 -96.2

32


Passport

Soup Spreads Sweet and Savoury Snacks Impulse and Indulgence Products Nutrition/Staples Meal Solutions Packaged Food Source: Note:

3.9 1.8 6.4 4.3 3.3 3.2 3.5

3.4 -1.9 6.1 3.8 3.5 4.0 3.7

18.0 -9.3 34.5 20.5 18.9 21.4 19.8


Table 38

Sales of Packaged Food by Category: % Value Growth 2009-2014



2013/14

2009-14 CAGR

2009/14 Total

4.1 6.5 7.8 7.3 4.9 3.9 8.1 7.2 4.3 8.8 8.0 6.8 9.7 9.2 6.3 -8.0 7.9 3.1 8.7 6.8 5.4 7.3 6.2

3.1 6.2 7.3 6.0 3.1 5.5 7.2 7.0 4.6 11.4 7.1 6.6 10.3 7.9 5.7 -43.4 7.7 0.8 8.3 5.9 5.6 6.7 5.9

16.7 34.9 42.5 33.8 16.2 30.6 41.4 40.4 25.3 71.3 41.0 37.3 63.1 46.2 32.0 -94.2 44.8 4.3 48.9 33.3 31.3 38.3 33.4


Table 39

GBO Company Shares of Packaged Food: % Value 2010-2014

% retail value rsp Company

2010

2011

2012

2013

2014

Nestlé SA JG Summit Holdings Inc San Miguel Corp Monde Nissin Corp San Pablo Mfg Corp Mead Johnson Nutrition Co Royal FrieslandCampina NV International Oil Factory

10.6 6.7 7.2 4.9 3.3 3.6 0.3 2.9

10.4 6.8 7.4 5.1 3.4 3.5 0.1 2.9

11.9 7.2 7.5 5.2 3.4 3.4 3.4 2.9

11.7 7.6 7.5 5.2 3.4 3.4 3.3 2.9

11.5 7.8 7.5 5.3 3.5 3.4 3.2 2.9


33


Unilever Group CDO Foodsphere Inc Century Canning Corp Republic Biscuit Corp Kraft Foods Group, Inc Liwayway Marketing Corp Pacific Meat Co Inc Del Monte Pacific Ltd Fonterra Co-operative Group Ltd Nutri-Asia Inc Yakult Honsha Co Ltd Mondelez International Inc Ajinomoto Co Inc QAF Ltd Food Industries Inc Goldilocks Bake Shop Inc Tobi Marketing Inc Liberty Gold Fruit Co Inc Mars Inc Abbott Laboratories Inc RFM Corp Columbia International Food Products Inc Artisanal Private Label Others Total Source:

Passport

2.8 1.6 1.7 1.7 1.2 0.9 0.9 1.3

2.8 1.7 1.7 1.7 1.2 0.9 0.9 1.3

2.8 1.8 1.7 1.7 1.7 1.3 1.4 1.0 1.3

2.7 1.8 1.8 1.7 1.7 1.3 1.3 1.0 1.2

2.5 1.9 1.8 1.7 1.6 1.4 1.3 1.3 1.2

1.0 0.9 -

1.0 0.9 -

1.0 1.0 1.0

1.0 1.0 1.0

1.0 1.0 1.0

1.0 0.7 0.7 0.7 0.7 0.6 0.8 0.6 0.7 0.6

1.0 0.8 0.7 0.7 0.7 0.6 0.7 0.6 0.8 0.6

1.0 0.8 0.7 0.7 0.7 0.6 0.6 0.7 0.3 0.6

0.9 0.8 0.7 0.7 0.7 0.6 0.6 0.6 0.3 0.6

0.9 0.8 0.8 0.8 0.7 0.6 0.6 0.6 0.6 0.6

3.9 1.8 33.6 100.0

3.8 1.8 33.4 100.0

3.7 1.9 25.2 100.0

3.6 1.9 25.2 100.0

3.5 1.9 24.9 100.0


Table 40

NBO Company Shares of Packaged Food: % Value 2010-2014

% retail value rsp Company Nestlé Philippines Inc Universal Robina Corp Monde Nissin Corp Purefoods-Hormel Co Inc, The Alaska Milk Corp San Pablo Mfg Corp Mead Johnson Philippines Inc International Oil Factory San Miguel Pure Foods Co Inc CDO Foodsphere Inc Century Canning Corp SM Retail Inc Kraft Foods (Philippines) Inc Wyeth Philippines Inc Unilever Foods Philippines (CMC) Liwayway Marketing Corp Pacific Meat Co Inc


2010

2011

2012

2013

2014

10.4 6.7 4.9 4.8

10.2 6.8 5.1 5.0

10.0 7.2 5.2 5.1

9.9 7.6 5.2 5.1

9.8 7.8 5.3 5.2

3.9 3.3 3.6

3.8 3.4 3.5

3.7 3.4 3.4

3.6 3.4 3.4

3.5 3.5 3.4

2.9 2.4

2.9 2.4

2.9 2.4

2.9 2.4

2.9 2.3

1.6 1.7 1.5 2.9

1.7 1.7 1.6 2.8

1.8 1.7 1.6 2.7

1.8 1.8 1.7 1.7

1.9 1.8 1.7 1.7

1.7 1.7

1.7 1.7

1.7 1.7

1.6 1.7

1.6 1.5

1.2 0.9

1.2 0.9

1.3 1.4

1.3 1.3

1.4 1.3

34


Fonterra Brands (Phils) Inc Del Monte Philippines Inc Unilever RFM Ice Cream Inc Yakult Philippines Inc Mondelez Philippines Inc Ajinomoto Philippines Corp Gardenia Philippines Inc Food Industries Inc UFC Philippines Inc Goldilocks Bake Shop Inc Tobi Marketing Inc Republic Biscuit Corp A Tung Chingco Trading Artisanal Others Total Source:

Passport

1.3

1.3

1.3

1.2

1.2

1.0 1.0

1.0 1.0

1.0 1.0

1.0 1.0

1.1 1.0

0.9 1.0

0.9 1.0

1.0 1.0

1.0 0.9 0.9

1.0 0.9 0.9

0.7 0.7 0.7 0.7 0.7 0.6 0.6 3.9 29.9 100.0

0.8 0.7 0.8 0.7 0.7 0.6 0.6 3.8 29.7 100.0

0.8 0.7 0.8 0.7 0.7 0.6 0.6 3.7 28.9 100.0

0.8 0.7 0.8 0.7 0.7 0.6 0.6 3.6 28.7 100.0

0.8 0.8 0.8 0.8 0.7 0.6 0.6 3.5 28.8 100.0


Table 41

LBN Brand Shares of Packaged Food: % Value 2011-2014

% retail value rsp Brand Jack 'n' Jill Purefoods Minola Lucky Me Alaska Baguio Bear Brand CDO Milo Lactum SM Bonus Nido Magnolia Oishi Sky Flakes Payless Yakult Kraft Nestlé 555 Selecta Del Monte Ajinomoto Argentina Gardenia Century Star


Company Universal Robina Corp Purefoods-Hormel Co Inc, The San Pablo Mfg Corp Monde Nissin Corp Alaska Milk Corp International Oil Factory Nestlé Philippines Inc CDO Foodsphere Inc Nestlé Philippines Inc Mead Johnson Philippines Inc SM Retail Inc Nestlé Philippines Inc San Miguel Pure Foods Co Inc Liwayway Marketing Corp Monde Nissin Corp Universal Robina Corp Yakult Philippines Inc Kraft Foods (Philippines) Inc Nestlé Philippines Inc Century Canning Corp Unilever RFM Ice Cream Inc Del Monte Philippines Inc Ajinomoto Philippines Corp Pacific Meat Co Inc Gardenia Philippines Inc Century Canning Corp San Miguel Pure Foods Co Inc

2011

2012

2013

2014

4.9 4.9

5.2 5.0

5.5 5.1

5.8 5.2

3.4 3.2 3.4 2.9 2.8 1.7 1.9 1.7

3.4 3.2 3.2 2.9 2.8 1.8 1.9 1.7

3.4 3.3 3.2 2.9 2.7 1.8 1.8 1.7

3.5 3.3 3.1 2.9 2.6 1.9 1.8 1.8

1.6 1.2 1.2

1.6 1.2 1.2

1.7 1.2 1.2

1.7 1.2 1.1

1.0 1.0 0.9 0.9 1.1

1.0 1.0 1.0 1.0 1.0

1.1 1.0 1.0 1.0 1.0

1.1 1.0 1.0 1.0 1.0

1.0 0.9 0.9 0.9 0.9 0.9 0.8 0.8 0.8

1.0 0.9 0.9 0.9 0.9 0.9 0.8 0.8 0.8

1.0 0.9 0.9 0.9 0.9 0.9 0.8 0.8 0.8

1.0 1.0 0.9 0.9 0.9 0.9 0.8 0.8 0.8

35


Nagaraya Anchor

Food Industries Inc Fonterra Brands (Phils) Inc Goldilocks Bake Shop Inc

Goldilocks Artisanal Others Total Source:

Passport

0.7 0.9

0.7 0.9

0.7 0.8

0.8 0.8

0.7 3.8 46.4 100.0

0.7 3.7 45.9 100.0

0.7 3.6 45.5 100.0

0.8 3.5 45.3 100.0


Table 42

Penetration of Private Label by Category: % Value 2009-2014

% retail value rsp

Bakery Chilled Processed Food Dried Processed Food Frozen Processed Food Meal Solutions Noodles Nutrition/Staples Oils and Fats Packaged Food Sauces, Dressings and Condiments Source:

2009

2010

2011

2012

2013

2014

0.5 2.0 4.9 8.0 2.7 0.4 2.3 6.2 1.7 0.7

0.6 2.0 4.8 8.3 2.7 0.4 2.3 6.3 1.8 0.7

0.5 2.1 4.8 8.1 2.7 0.4 2.3 6.5 1.8 0.7

0.5 2.2 4.9 8.0 2.7 0.4 2.4 6.7 1.9 0.7

0.5 2.3 4.9 8.1 2.8 0.4 2.5 6.8 1.9 0.8

0.5 2.4 5.0 8.2 2.8 0.4 2.6 7.0 1.9 0.8


Table 43

Distribution of Packaged Food by Format: % Value 2009-2014

% retail value rsp

Store-Based Retailing - Grocery Retailers -- Modern Grocery Retailers --- Convenience Stores --- Discounters --- Forecourt Retailers --- Hypermarkets --- Supermarkets -- Traditional Grocery Retailers --- Food/drink/tobacco specialists --- Independent Small Grocers --- Other Grocery Retailers - Non-Grocery Retailers -- Health and Beauty Retailers -- Mixed Retailers -- Other Non-Grocery Retailers


2009

2010

2011

2012

2013

2014

99.9 95.4 49.2

99.8 95.5 49.6

99.8 95.6 49.9

99.8 95.7 50.3

99.8 95.8 50.6

99.8 95.8 51.0

1.3 0.1 4.9 42.8 46.2

1.3 0.2 5.5 42.6 45.9

1.3 0.2 5.9 42.5 45.7

1.4 0.2 6.1 42.6 45.4

1.4 0.2 6.3 42.7 45.1

1.4 0.2 6.4 43.0 44.8

4.2

4.1

4.1

4.1

4.0

4.0

11.7

11.0

10.5

10.3

10.1

9.9

30.3

30.7

31.1

31.0

31.0

30.9

4.4 4.4

4.4 4.3

4.2 4.2

4.1 4.1

4.1 4.0

4.0 4.0

0.0 0.0

0.0 0.0

0.0 0.0

0.0 0.0

0.0 0.0

0.0 0.0

36


Non-Store Retailing - Vending - Homeshopping - Internet Retailing - Direct Selling Total Source:

Passport

0.1 0.0 0.0 0.1 100.0

0.2 0.0 0.0 0.2 100.0

0.2 0.0 0.0 0.2 100.0

0.2 0.0 0.0 0.2 100.0

0.2 0.0 0.0 0.2 100.0

0.2 0.0 0.0 0.2 100.0


Table 44

Distribution of Packaged Food by Format and Category: % Value 2014

% retail value rsp

Store-Based Retailing - Grocery Retailers -- Modern Grocery Retailers --- Convenience Stores --- Discounters --- Forecourt Retailers --- Hypermarkets --- Supermarkets -- Traditional Grocery Retailers --- Food/drink/tobacco specialists --- Independent Small Grocers --- Other Grocery Retailers - Non-Grocery Retailers -- Health and Beauty Retailers -- Mixed Retailers -- Other Non-Grocery Retailers Non-Store Retailing - Vending - Homeshopping - Internet Retailing - Direct Selling Total

Store-Based Retailing - Grocery Retailers -- Modern Grocery Retailers --- Convenience Stores --- Discounters --- Forecourt Retailers --- Hypermarkets --- Supermarkets -- Traditional Grocery Retailers --- Food/drink/tobacco specialists


BF

B

CPF

CHP

C

D

100.0 58.0 47.3

100.0 98.5 31.0

100.0 100.0 61.3

100.0 100.0 59.3

99.8 94.1 46.2

99.7 99.7 53.4

1.1 0.0 0.0 6.2 40.0 10.6

0.5 0.0 0.2 4.0 26.3 67.6

1.4 0.0 0.3 7.3 52.4 38.7

1.6 0.0 0.0 7.2 50.5 40.7

4.3 0.0 0.6 5.9 35.4 47.9

1.6 0.0 0.1 6.8 44.9 46.4

0.0

26.1

0.0

0.0

4.0

0.0

10.6

5.0

15.4

5.5

7.9

10.8

0.0

36.5

23.2

35.2

36.0

35.5

42.0 42.0

1.5 1.5

0.0 0.0

0.0 0.0

5.8 5.7

0.0 0.0

0.0 0.0

0.0 0.0

0.0 0.0

0.0 0.0

0.0 0.0

0.0 0.0

0.0 0.0 0.0 0.0 0.0 100.0

0.0 0.0 0.0 0.0 0.0 100.0

0.0 0.0 0.0 0.0 0.0 100.0

0.0 0.0 0.0 0.0 0.0 100.0

0.2 0.0 0.0 0.2 0.0 100.0

0.3 0.0 0.0 0.0 0.3 100.0

DPF

FPF

IC

MR

NOO

OF

100.0 100.0 53.2

99.9 99.9 75.2

100.0 100.0 81.7

78.9 38.4 23.5

100.0 100.0 47.3

100.0 99.9 59.4

2.4 0.0 0.2 6.7 44.0 46.8

1.2 0.0 0.0 10.0 64.0 24.7

2.0 0.0 0.3 10.8 68.6 18.3

0.0 0.0 0.0 3.0 20.5 14.9

2.3 0.0 0.2 5.9 38.9 52.7

0.1 0.0 0.0 7.3 52.0 40.6

0.0

0.0

0.1

0.0

0.0

0.0

37


--- Independent Small Grocers --- Other Grocery Retailers - Non-Grocery Retailers -- Health and Beauty Retailers -- Mixed Retailers -- Other Non-Grocery Retailers Non-Store Retailing - Vending - Homeshopping - Internet Retailing - Direct Selling Total

Store-Based Retailing - Grocery Retailers -- Modern Grocery Retailers --- Convenience Stores --- Discounters --- Forecourt Retailers --- Hypermarkets --- Supermarkets -- Traditional Grocery Retailers --- Food/drink/tobacco specialists --- Independent Small Grocers --- Other Grocery Retailers - Non-Grocery Retailers -- Health and Beauty Retailers -- Mixed Retailers -- Other Non-Grocery Retailers Non-Store Retailing - Vending - Homeshopping - Internet Retailing - Direct Selling Total

Passport

11.9

11.5

14.7

14.9

10.2

7.0

34.9

13.2

3.6

0.0

42.5

33.6

0.0 0.0

0.0 0.0

0.0 0.0

40.6 40.6

0.0 0.0

0.1 0.0

0.0 0.0

0.0 0.0

0.0 0.0

0.0 0.0

0.0 0.0

0.0 0.1

0.0 0.0 0.0 0.0 0.0 100.0

0.1 0.0 0.0 0.1 0.0 100.0

0.0 0.0 0.0 0.0 0.0 100.0

21.1 0.0 0.0 0.0 21.1 100.0

0.0 0.0 0.0 0.0 0.0 100.0

0.0 0.0 0.0 0.0 0.0 100.0

P

RM

SDC

SB

SOU

SPR

100.0 100.0 58.6

100.0 100.0 81.4

100.0 100.0 45.7

100.0 95.6 95.6

100.0 100.0 67.0

100.0 100.0 60.2

2.3 0.0 0.0 7.0 49.3 41.4

5.4 0.0 2.8 8.7 64.5 18.6

1.0 0.0 0.2 5.5 39.0 54.2

3.0 0.0 1.0 12.0 79.6 0.0

5.9 0.0 2.0 7.4 51.7 33.1

1.0 0.0 0.9 7.5 50.8 39.8

0.0

0.0

0.0

0.0

0.0

0.0

13.8

14.0

5.4

0.0

15.5

16.2

27.6

4.6

48.8

0.0

17.5

23.6

0.0 0.0

0.0 0.0

0.0 0.0

4.4 0.5

0.0 0.0

0.0 0.0

0.0 0.0

0.0 0.0

0.0 0.0

0.0 3.9

0.0 0.0

0.0 0.0

0.0 0.0 0.0 0.0 0.0 100.0

0.0 0.0 0.0 0.0 0.0 100.0

0.0 0.0 0.0 0.0 0.0 100.0

0.0 0.0 0.0 0.0 0.0 100.0

0.0 0.0 0.0 0.0 0.0 100.0

0.0 0.0 0.0 0.0 0.0 100.0

SSS Store-Based Retailing - Grocery Retailers -- Modern Grocery Retailers --- Convenience Stores --- Discounters --- Forecourt Retailers --- Hypermarkets --- Supermarkets -- Traditional Grocery


100.0 98.7 38.4 1.5 0.0 0.2 5.0 31.7 60.3

38


Retailers --- Food/drink/tobacco specialists --- Independent Small Grocers --- Other Grocery Retailers - Non-Grocery Retailers -- Health and Beauty Retailers -- Mixed Retailers -- Other Non-Grocery Retailers Non-Store Retailing - Vending - Homeshopping - Internet Retailing - Direct Selling Total Source: Key:

Passport

0.0 15.2 45.2 1.2 1.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 100.0

Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources BF = baby food; B = bakery; CPF = canned/preserved food; CHP = chilled processed food; C = confectionery; D = dairy; DPF = dried processed food; FPF = f rozen processed food; IC = ice cream; MR = meal replacement; NOO = noodles; OF = oils and fats; P = pasta; RM = ready meals; SDC = sauces, dressings and condiments; SB = snack bars; SOU = soup; SPR = spreads; SSS = sweet and savoury snacks

Table 45

Forecast Sales of Packaged Food by Category: Volume 2014-2019

'000 tonnes


2014

2015

2016

2017

2018

2019

55.5 391.2 277.8 99.0 93.4 399.3 365.9 123.2 49.7 1.3 220.6 564.7 41.9 14.4 223.0

56.6 403.3 287.9 101.9 96.3 409.3 381.4 126.3 50.7 1.4 230.1 583.7 44.1 15.2 228.2

57.6 414.9 297.6 104.6 99.2 418.4 396.9 129.1 51.7 1.4 239.2 601.4 46.5 16.0 232.6

58.9 427.7 307.8 107.7 102.2 427.3 412.7 132.1 52.9 1.5 248.5 619.6 49.0 16.8 237.5

60.2 441.4 318.6 111.2 105.3 435.5 429.0 135.5 54.4 1.5 258.3 638.0 51.5 17.6 242.9

61.7 455.9 330.2 115.1 108.5 443.1 445.9 139.1 56.1 1.6 268.5 656.5 54.0 18.6 248.7

0.0 4.6 13.0 159.8 533.5

0.0 4.8 13.2 169.5 555.7

0.0 5.0 13.5 179.4 577.9

0.0 5.2 13.8 189.4 601.5

0.0 5.4 14.1 199.6 626.5

0.0 5.6 14.5 209.9 652.5

1,558.8 742.5 2,817.1

1,608.0 764.9 2,910.0

1,654.7 785.2 2,998.3

1,702.6 807.6 3,091.3

1,750.7 831.8 3,187.5

1,799.2 857.8 3,287.0



39


Note:

Passport

Sum of categories does not equal total packaged food because of double counting (eg canned soup is included in soups and canned foods)

Table 46

Forecast Sales of Packaged Food by Category: Value 2014-2019

PHP bn


2014

2015

2016

2017

2018

2019

35.5 69.6 38.3 19.2 33.5 79.1 37.3 34.3 10.2 2.6 27.2 54.3 3.9 3.8 26.6

36.4 71.7 39.5 19.7 34.2 80.7 38.7 35.2 10.5 2.7 28.1 55.7 4.2 3.9 27.1

37.3 73.7 40.7 20.2 34.9 82.4 40.0 36.0 10.7 2.9 29.0 57.0 4.4 4.1 27.4

38.2 76.0 42.0 20.7 35.6 84.3 41.4 36.9 11.1 3.0 29.9 58.5 4.6 4.3 27.8

39.3 78.6 43.3 21.3 36.4 86.4 42.8 37.9 11.4 3.2 30.8 60.1 4.9 4.6 28.3

40.4 81.3 44.8 22.0 37.2 88.6 44.2 39.0 11.9 3.3 31.7 61.8 5.2 4.8 28.8

0.0 1.8 3.8 45.2 135.7

0.0 1.8 3.8 47.8 140.7

0.0 1.9 3.8 50.4 145.7

0.0 1.9 3.9 53.0 150.9

0.0 2.0 3.9 55.6 156.4

0.0 2.1 4.0 58.1 161.9

234.7 124.1 489.7

240.6 127.4 503.7

246.6 130.5 517.6

253.2 133.9 532.6

260.3 137.6 548.6

267.9 141.6 565.4

Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources Sum of categories does not equal total packaged food because of double counting (eg canned soup is included in soups and canned foods)

Table 47

Forecast Sales of Packaged Food by Category: % Volume Growth 2014-2019

% volume growth

Baby Food Bakery Canned/Preserved Food Chilled Processed Food Confectionery Dairy Dried Processed Food Frozen Processed Food Ice Cream Meal Replacement Noodles Oils and Fats Pasta Ready Meals Sauces, Dressings and Condiments


2014/15

2014-19 CAGR

2014/19 Total

2.4 3.3 3.6 3.4 3.1 1.7 3.9 2.7 3.1 4.2 4.0 2.9 4.9 5.3 2.4

2.1 3.1 3.5 3.1 3.0 2.1 4.0 2.5 2.4 4.0 4.0 3.1 5.2 5.2 2.2

11.0 16.5 18.8 16.3 16.1 11.0 21.8 12.9 12.8 21.8 21.7 16.3 28.8 28.6 11.5

40


Passport

Snack Bars Soup Spreads Sweet and Savoury Snacks Impulse and Indulgence Products Nutrition/Staples Meal Solutions Packaged Food Source: Note:

-3.3 3.7 2.6 5.2 4.2 2.8 3.1 3.1

-4.4 3.8 2.2 5.6 4.1 2.9 2.9 3.1

-20.0 20.3 11.7 31.4 22.3 15.4 15.5 16.7


Table 48

Forecast Sales of Packaged Food by Category: % Value Growth 2014-2019

% constant value growth 2014/2015

2014-19 CAGR

2014/19 TOTAL

2.9 3.5 3.3 3.1 2.3 2.6 3.3 2.8 3.7 5.4 3.0 2.9 5.3 5.2 1.8 -2.5 3.4 1.7 4.5 3.6 2.9 2.9 3.1

2.6 3.2 3.2 2.8 2.1 2.3 3.4 2.6 3.0 4.9 3.1 2.6 5.6 5.0 1.6 -3.6 3.2 0.8 5.1 3.6 2.7 2.7 2.9

13.6 16.8 16.9 14.6 11.2 12.0 18.3 13.6 15.7 26.8 16.6 13.9 31.4 27.5 8.3 -16.8 17.2 4.2 28.5 19.3 14.2 14.1 15.5



DEFINITIONS Explanations of words and/or terminology used in this report are as follows: Sari-sari stores - local traditional independent ‘mom and pop’ shops 

SOURCES Sources used during the research included the following: Summary 1

Research Sources


41

Packaged Food in the Philippines

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