Packaged Food in the Philippines

PACKAGED FOOD IN THE PHILIPPINES Euromonitor International April 2014

PACKAGED FOOD IN THE PHILIPPINES

LIST OF CONTENTS AND TABLES Executive Summary ................................................................................................................ ..... 1 Packaged Food Maintains Moderate Growth in 2013 .......................................................... ..... 1 Filipino Consumers Seek Variety in Food Choices .............................................................. ..... 1 Nestlé Philippines Maintains the Lead in Packaged Food ........................................................ 1 Modern Grocery Retailers Dominates the Distribution of Packaged Food ................................ 1 Packaged Food Set To Grow at A Slower Pace in the Medium Term ...................................... 1 Key Trends and Developments .................................................................................... ................ 2 Better Economic Performance in 2013 Boosts the Performance of Packaged Food ................ 2 Manufacturers Cash-in Cash-in on Filipinos‟ Faster -paced -paced Lifestyles.................................................... 2 New Product Developments Embody Filipinos‟ Filipinos‟ Increasing Interest in Product Variety ............. Variety ............. 3 Players Go Beyond Traditional Marketing Campaigns To Engage Consumers ........................ 4 Foodservice – Foodservice – Key Key Trends and Developments ............................................................. ................ 6 Headlines............................................................ ................................................................. ..... 6 Trends – Trends – Sales Sales To Foodservice ........................................................... ..................................... 6 Trends – Trends – Foodservice Foodservice ............................................................... ................................................ 6 Prospects............................................................ ................................................................. ..... 7 Category Data .......................................................................................................................... 7 Table 1 Table 2 Table 3 Table 4

Foodservice Sales of Packaged Food by Category: Volume 20082013 ............................................................. ................................................ 7 Foodservice Sales of Packaged Food by Category: % Volume Growth 2008-2013 ............................................................... ..................................... 8 Forecast Foodservice Sales of Packaged Food by Category: Volume 2013-2018 ............................................................... ..................................... 8 Forecast Foodservice Sales of Packaged Food by Category: % Volume Growth 2013-2018 .................................................................. ........ 9

Impulse and Ingulgence Products – Products – Key Key Trends and Developments ......................................... 10 Headlines............................................................ ................................................................. ... 10 Trends .................................................................................................................................... 10 Competitive Landscape .......................................................................................................... 11 Prospects............................................................ ................................................................. ... 12 Category Data ........................................................................................................................ 13 Table 5 Table 6 Table 7 Table 8 Table 9 Table 10 Table 11

Sales of Impulse and Indulgence Products by Category: Volume 2008-2013 ............................................................... ................................... 13 Sales of Impulse and Indulgence Products by Category: Value 2008 2013 ............................................................. .............................................. 13 Sales of Impulse and Indulgence Products by Category: % Volume Growth 2008-2013 .................................................................................. ... 13 Sales of Impulse and Indulgence Products by Category: % Value Growth 2008-2013 .................................................................................. ... 14 NBO Company Shares of Impulse and Indulgence Products: % Value 2009-2013 ............................................................... ................................... 14 LBN Brand Shares of Impulse and Indulgence Products: % Value 2010-2013 ............................................................... ................................... 15 Forecast Sales of Impulse and Indulgence Products by Category: Volume 2013-2018 ..................................................................................... 16

© Euromonitor International

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LIST OF CONTENTS AND TABLES Executive Summary ................................................................................................................ ..... 1 Packaged Food Maintains Moderate Growth in 2013 .......................................................... ..... 1 Filipino Consumers Seek Variety in Food Choices .............................................................. ..... 1 Nestlé Philippines Maintains the Lead in Packaged Food ........................................................ 1 Modern Grocery Retailers Dominates the Distribution of Packaged Food ................................ 1 Packaged Food Set To Grow at A Slower Pace in the Medium Term ...................................... 1 Key Trends and Developments .................................................................................... ................ 2 Better Economic Performance in 2013 Boosts the Performance of Packaged Food ................ 2 Manufacturers Cash-in Cash-in on Filipinos‟ Faster -paced -paced Lifestyles.................................................... 2 New Product Developments Embody Filipinos‟ Filipinos‟ Increasing Interest in Product Variety ............. Variety ............. 3 Players Go Beyond Traditional Marketing Campaigns To Engage Consumers ........................ 4 Foodservice – Foodservice – Key Key Trends and Developments ............................................................. ................ 6 Headlines............................................................ ................................................................. ..... 6 Trends – Trends – Sales Sales To Foodservice ........................................................... ..................................... 6 Trends – Trends – Foodservice Foodservice ............................................................... ................................................ 6 Prospects............................................................ ................................................................. ..... 7 Category Data .......................................................................................................................... 7 Table 1 Table 2 Table 3 Table 4

Foodservice Sales of Packaged Food by Category: Volume 20082013 ............................................................. ................................................ 7 Foodservice Sales of Packaged Food by Category: % Volume Growth 2008-2013 ............................................................... ..................................... 8 Forecast Foodservice Sales of Packaged Food by Category: Volume 2013-2018 ............................................................... ..................................... 8 Forecast Foodservice Sales of Packaged Food by Category: % Volume Growth 2013-2018 .................................................................. ........ 9

Impulse and Ingulgence Products – Products – Key Key Trends and Developments ......................................... 10 Headlines............................................................ ................................................................. ... 10 Trends .................................................................................................................................... 10 Competitive Landscape .......................................................................................................... 11 Prospects............................................................ ................................................................. ... 12 Category Data ........................................................................................................................ 13 Table 5 Table 6 Table 7 Table 8 Table 9 Table 10 Table 11

Sales of Impulse and Indulgence Products by Category: Volume 2008-2013 ............................................................... ................................... 13 Sales of Impulse and Indulgence Products by Category: Value 2008 2013 ............................................................. .............................................. 13 Sales of Impulse and Indulgence Products by Category: % Volume Growth 2008-2013 .................................................................................. ... 13 Sales of Impulse and Indulgence Products by Category: % Value Growth 2008-2013 .................................................................................. ... 14 NBO Company Shares of Impulse and Indulgence Products: % Value 2009-2013 ............................................................... ................................... 14 LBN Brand Shares of Impulse and Indulgence Products: % Value 2010-2013 ............................................................... ................................... 15 Forecast Sales of Impulse and Indulgence Products by Category: Volume 2013-2018 ..................................................................................... 16


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Table 12 Table 13 Table 14

Forecast Sales of Impulse and Indulgence Products by Category: Value 2013-2018 ............................................................... ......................... 16 Forecast Sales of Impulse and Indulgence Products by Category: % Volume Growth 2013-2018 .................................................................. ...... 16 Forecast Sales of Impulse and Indulgence Products by Category: % Value Growth 2013-2018 ............................................................. .............. 17

Meal Solutions – Solutions – Key Key Trends and Developments......................................................... .............. 17 Headlines............................................................ ................................................................. ... 17 Trends .................................................................................................................................... 17 Competitive Landscape .......................................................................................................... 18 Prospects............................................................ ................................................................. ... 19 Category Data ........................................................................................................................ 20 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 2008-2013 ......................... 20 Sales of Meal Solutions by Category: Value 2008 -2013 ............................ 20 Sales of Meal Solutions by Category: % Volume Growth 2008-2013 ......... 20 Sales of Meal Solutions by Category: % Value Growth 2008-2013 ............ 21 NBO Company Shares of Meal Solutions: % Value 2009 -2013 ................. 21 LBN Brand Shares of Meal Solutions: % Value 2010-2013 ........................ 22 Forecast Sales of Meal Solutions by Category: Volume 2013-2018 .......... 23 Forecast Sales of Meal Solutions by Category: Value 2013 -2018 ............. 23 Forecast Sales of Meal Solutions by Category: % Volume Growth 2013-2018 ............................................................... ................................... 23 Forecast Sales of Meal Solutions by Category: % Value Growth 20132018 ............................................................. .............................................. 24

Nutrition/staples – Nutrition/staples – Key Key Trends and Developments....................................................... .............. 24 Headlines............................................................ ................................................................. ... 24 Trends .................................................................................................................................... 24 Competitive Landscape .......................................................................................................... 25 Prospects............................................................ ................................................................. ... 26 Category Data ........................................................................................................................ 27 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 2008-2013 ....................... 27 Sales of Nutrition/Staples by Category: Value 2008-2013.......................... 2008-2013.......................... 27 Sales of Nutrition/Staples by Category: % Volume Growth 2008-2013 ...... 28 Sales of Nutrition/Staples by Category: % Value Growth 2008 -2013 ......... 28 NBO Company Shares of Nutrition/Staples: % Value 2009-2013 .............. 28 LBN Brand Shares of Nutrition/Staples: % Value 2010-2013 ..................... 29 Forecast Sales of Nutrition/Staples by Category: Volume 2013-2018 ........ 30 Forecast Sales of Nutrition/Staples by Category: Value 2013-2018 ........... 30 Forecast Sales of Nutrition/Staples by Category: % Volume Growth 2013-2018 ............................................................... ................................... 31 Forecast Sales of Nutrition/Staples by Category: % Value Growth 2013-2018 ............................................................... ................................... 31

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

Sales of Packaged Food by Category: Volume 2008-2013 ........................ 31 Sales of Packaged Food by Category: Value 2008-2013 ........................... 32 Sales of Packaged Food by Category: % Volume Growth 2008 -2013 ....... 33 Sales of Packaged Food by Category: % Value Growth 2008-2013 .......... 33 GBO Company Shares of Packaged Food: % Value 2009-2013 ............... 34 NBO Company Shares of Packaged Food: % Value 2009-2013 2009 -2013 ............... 34


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

LBN Brand Shares o f Packaged Food: % Value 2010-2013 ...................... 35 Penetration of Private Label by Category: % Value 2008-2013 ................. 36 Distribution of Packaged Food by Format: % Value 2008-2013 ................. 36 Distribution of Packaged Food by Format and Category: % Value 2013 ............................................................. .............................................. 37 Forecast Sales of Packaged Food by Category: Volume 2013-2018 ......... 39 Forecast Sales of Packaged Food by Category: Value 2013 -2018 ............ 40 Forecast Sales of Packaged Food by Category: % Volume Growth 2013-2018 ............................................................... ................................... 40 Forecast Sales of Packaged Food by Category: % Value Growth 2013-2018 ............................................................... ................................... 41

Definitions............................................................... ................................................................. ... 42 Sources ....................................................... ................................................................. .............. 42 Summary 1

Research Sources ............................................................. ......................... 42


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PACKAGED FOOD IN THE PHILIPPINES EXECUTIVE SUMMARY

Packaged Food Maintains Moderate Growth in 2013 The local packaged food market is expected to remain vibrant in 2013, reporting current value growth of 5%. The dynamic economic performance in the Philippines helped to boost incomes, which led to higher purchasing power. Meanwhile, consumers‟ confidence also increased, and encouraged spending amongst all income groups. Filipinos‟ consumption of packaged food was also encouraged by manufacturers‟ efforts to push their products via traditional means such as tri-media campaigns and price promotions. 2013, however, saw more manufacturers venturing into more innovative means of engaging consumers, such as a presence in social media and the organisation of health-related events and activities.

Filipino Consumers Seek Variety in Food Choices Packaged food manufacturers responded to Filipino consumers‟ increasing demand for variety through the introduction of products which offered new flavours, convenience and health benefits. Increasing incomes amongst urban dwellers encouraged the creation of impulse and indulgence products to satisfy the craving for something new and different. Filipi nos also increasingly looked for convenience products to keep up with their faster-paced lifestyles. Meanwhile, there was an emerging group of health -conscious consumers looking for healthier alternatives.

Nestlé Philippines Maintains the Lead in Packaged Food The local arm of Nestlé SA, Nestlé Philippines Inc, accounts for the highest share in the local packaged food market, maintaining its lead in dairy a nd baby food. During 2013 the company continued to strengthen its product portfolio, whilst building and cementing its relationship with consumers through its marketing campaigns. Nestlé Philippines continued to emphasise its commitment to bring wellness via its launch of products which have a health positioning.

Modern Grocery Retailers Dominates the Distribution of Packaged Food During 2013, modern grocery retailers is expected to continue eating into the share of traditional channels and emerge as the most important distribution channel for packaged food. Channels such as hypermarkets, supermarkets, convenience stores and forecourt retailers are expected to account for more than half of overall value sales of packaged food in 2013. The recent expansion strategy of chained players such as SM Investments Corp, Puregold Price Club and Philippine Seven Corp, amongst others, largely c ontributed to the increase of modern grocery retailers in packaged food.

Packaged Food Set To Grow at A Slower Pace in the Medium Term Over the forecast period the packaged food market in the Philippines is expected to continue to grow. The expected revitalisation of the Philippine economy will play a significant role in stimulating consumption. Economic growth will continue to improve levels of income and the


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propensity to spend. However, growth will be mitigated by the increasing maturity of major categories including dairy, oils and fats and bakery.

KEY TRENDS AND DEVELOPMENTS

Better Economic Performance in 2013 Boosts the Performance of Packaged Food The Philippine economy stood out from its Asian peers, as it reported higher than expected gross domestic product (GDP) growth of 8% during the first quarter of 2013. This uptick in economic performance was contributed by the strong spending of the government, the influx of remittances from OFW (overseas Filipino workers) and investment in construction. In the year as a whole, the Philippine economy is projected to grow by 6%, which is slightly slower than t he 7% recorded in 2012. The strong economic performance in 2013 enabled the packaged food market to maintain its moderate growth. Total revenue is set to increase by 5% in current terms, which is on a par with the 2012 growth rate. Improving incomes, especially amongst urban dwellers and families of OFW, stimulated consumption. Strong consumer confidence in the economy translated into better spending. Furthermore, the purchase of packaged food was encouraged by low infl ation, which kept the unit prices of major commodities at bay. Despite the growth in the economy, the highly skewed distribution of incomes in the Philippines limited the growth to some categories, whilst bringing contraction to others. Generally, impulse and indulgence products, which appeal to more affluent consumers, is expected to continue to accelerate in 2013, whilst nutrition/staples, which is more geared towards the mass-market, is expected to slightly decelerate. Outlook Economic experts agree that the Philippines is entering a phase of rapid economic growth, as fiscal reforms and other recent developments are coming to fruition. Euromonitor International projects that the local economy‟s real GDP will see moderate annual growth of 5.5% from 2014 to 2018, which is slightly lower than the 6.0% target set by the Philippine government. Economic growth will be seen on the back of greater spending on infrastructure and the improving business climate. Key growth drivers such as remittances from OFW, exports and business process outsourcing will remain robust in the next five years. Packaged food will continue to benefit from the projected dynamic economic growth over the forecast period. It should be noted that spending on packaged food will continue to depend on Filipino consumers‟ level of income and purchasing power. The constant value CAGR for packaged food over the forecast period is expected to h it 3%. Middle-income Filipinos are likely to experience the biggest improvement in incomes, as job opportunities will remain concentrated in urban areas. This trend will offer good prospects for impulse and indulgence products, as well as categories which are still small, such as meal replacement, snack bars, soy milk, olive oil and fresh/pasteurised milk. Meanwhile, faster-paced lifestyles amongst consumers in the metropolis could stimulate demand for meal solutions, especially ready meals.

Manufacturers Cash-in on Filipinos‟ Faster -paced Lifestyles Filipinos‟ lifestyles are i ncreasingly becoming faster -paced, as more consumers join the workforce. The opening up of business process outsourcing in key cities nationwide further increased the number of Filipinos working irregular working hours. Furthermore, the increasing


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number of dual-income families challenges Filipino households in terms of food preparation and spending time with their family. Manufacturers continued to respond to Filipinos‟ growing demand for convenient products through the launch of brands which kept up with their busier lifestyles. In 2012, Hunt-Universal Robina Corp launched its new variant of Hunt‟s Pork „n Beans called Hunt‟s Chili „n Beans in stand-up pouches. Aside from focusing on its new flavour, the manufacturer also emphasised the ease of serving the product, as it can be heated in its pouch. On the other hand, Nestlé Philippines launched Maggi Magic Meals; this allows busy consumers to cook rice and ulam at the same time. Aside from the introduction of new products, companies also tried to instil a work-life balance through the positioning of their brands. Selecta continued to encourage families to bond at the weekend, and reminded parents that “every weekend counts”. The leader in noodles, Lucky Me, emphasised the importance of sharing meals with the family through its annual “Famealy Day” event. During 2013 Oreo positioned itself as the favourite bonding cookie amongst families, and encouraged parents to log-in Oreo Time, or time that they spend with their families, with a goal of collecting one million Oreo Time. Milo R2 is geared to reminding workers to pursue other activities outside work by supplying them with more energy. It should be noted that manufacturers are tapping into Filipinos‟ close family ties and regard for their families. Outlook The good economic prospects in the Philippines will help to create more jobs, especially in urban areas. The expansion of business processing hubs in more provincial cities will continue to boost employment in these locations. Because of these developments, Filipinos will continue to live faster-paced lifestyles. With more women joining the workforce, the number of dualincome families will also increase. This could lead to greater concern and a greater challenge of preparing daily meals and spending time with the family. With these expectations, manufacturers are expected to come up with more products which will respond to consumers‟ increasing need for convenience. This trend also offers good opportunities to meal solutions such as ready meals, canned/preserved food, sauces, dressings and condiments and other nutrition/staples products, such as children‟s breakfast cereals and packaged/industrial bread. Filipino workers are expected to choose products which will allow them to save time. Thus, product features such as quick cooking, complete solutions and microwaveability could emerge to serve the need for convenience. Aside from new product introductions, companies will remain aggressive in encouraging consumers to spend more time with their families. Appealing to Fili pinos‟ values, family-oriented campaigns are expected to strengthen the positioning of brands and help to cement customer loyalty. The focus on spending time with the family is seen to get good support from Filipinos, especially amongst urban dwellers. Although impulse and indulgence products are more aggressive in this regard at the moment, it is expected that more players will jump onto the bandwagon.

New Product Developments Embody Filipinos‟ Increasing Interest in Product Variety Rising incomes in the Philippines, together with Filipinos‟ exposure to foreign products through travelling abroad and internet technology, stirred interest in new products and increased the demand for variety. Young professionals and more affluent customers are increasingly becoming more interested in “gourmet” and higher -quality products. Meanwhile, aspirational middle- and lower-income consumers are also becoming more adventurous and willing to try out new products, especially those which generate a strong buzz.


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The phenomenal success of Magnum ice cream in 2011 signalled the presence of a consumer segment willing to try out premium products. This led to a number of high-priced ice cream brands which are positioned to offer new experiences to consumers. An example of this is Nestlé Crunch, which capitalises on Filipinos‟ love of chocolate. Nestlé Crunch is singleportion dairy ice cream which is made up of three layers of chocolate – crispy and crunchy chocolate outer shell, chocolate fudge filling in the centre and creamy chocolate ice cream sandwiched in between. Another interesting launch for Nestlé was its first fl avoured coffee whitener, Coffee-mate Creamy Caramel. Manufacturers also responded to consumers‟ preference for new products through the launch of more innovative flavours. Some products preferred to stick with flavours which are considered classic and well-loved. Universal Robina Corp launched its newest Pancit ni Mang Juan noodle brand, which features familiar Filipino dishes such as abodo and sweet and spicy barbecue. It should be noted that this move veered away from the recent popularity of Chinese, Japanese and Korean flavours in noodles. Star margarine laun ched its newest flavours, chocolate and vanilla, rivalling other spreads brands. Monde Nissin Corp‟s Sky Flakes introduced new biscuits filled with condensed milk and chocolate. Nestlé Philippines offered two n ew flavours of its Nido Fortified powder milk (chocolate and melon). Outlook Increasing incomes amongst young professionals in the Philippines will continue to increase the demand for better product variety. Filipinos‟ exposure to wider cuisine outside their homes will raise their standards and make them more adventurous in terms of the food that they consume at home. This could continue to encourage manufacturers to improve their offerings and widen their product portfolios to include more flavour innovations. Amongst middle- and lower-income consumers, variety is needed to sustain consumers‟ interest in brands. The number of alternatives present in the market could also facilitate more frequent consumption, as consumers are given more choice. Gourmet products are expected to become more prominent in categories targeting more affluent consumers and young professionals. Indulgence products such as ice cream, chocolate confectionery, cakes and pastries would strongly benefit from a premium positioning. The use of higher-quality ingredients, especially those which are sourced abroad, could help to create an upscale image. Another opportunity in the medium term is the launch of products which are popular in consumer foodservice. For instance, companies could take advantage of the growing prominence of Mexican, Korean and Japanese full-service restaurants by launching ready meals and canned/preserved food which feature dishes from these cuisines. Flavour innovation will continue to be a popular strategy in order to maintain the interest of the mass-market. As in 2013, manufacturers are expected to launch flavours which are familiar to and well-loved by Filipinos in order to minimise risk. Chocolate flavour will continue to be very popular in ice cream, confectionery, bakery and dairy. Filipino dishes will d ominate canned/preserved food, sauces, dressings and condiments and ready meals, but Asian dishes are also expected to emerge.

Players Go Beyond Traditional Marketing Campaigns To Engage Consumers Traditionally, manufacturers in the local packaged food market utilised tri-media advertising campaigns to inform consumers about new product launches and to build their brand image. Meanwhile, in-store promotions such as free tasting events were also carried out to encourage trial purchases. Promotional pricing, including bundling and discount offers, were also carried out to compete head-on with competitors and emphasise value for money. Whilst these


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strategies remain popular in the Philippines, players are resorting to more engaging campaigns which necessitate the participation and direct contribution of consumers. Packaged food manufacturers jumped onto the bandwagon, following players which had established a presence on social networking sites. Companies‟ fan pages serve as a means to communicate directly with their target market. Consumers are informed of new la unches, company news and promotional campaigns in real time. In addition, exclusive online promotions are made available to fans. In 2013, companies continued to use social media in order to complement their traditional strategies. Starting in 2012, Selecta was aggressive in the promotion of the new use for its Selecta Super Thick Ice Cream variant. Consumers were encouraged to make their own ice cream cake and post pictures on the company‟s Facebook page. Snickers launched its own Facebook page to support its “You‟re Not You W hen You‟re Hungry” promotion. Meanwhile, Nestlé Philippines‟s “Break Movement” for Kit Kat also found a home on Facebook. Gardenia Philippines‟s Health and Wellness Campaign also reflected in the health-related posts it made on Facebook. Interestingly, television advertisements from packaged food manufacturers encouraged consumers to check out their Facebook pages for additional information and join promotions. Maggi went a step further by posting a series of celebrity cooking videos which feature its brands in sauces, dressings and condiments. Aside from social media, companies also tapped into the increasing health and wellness concerns in the Philippines. Nestlé Philippines launched its W ellness Expo to cement its image as a healthy company. Meanwhile, brands such as Alaska, Ensure, Yakult and NutriBar sponsored running events and other sports activities, emphasising their commitment to help Filipinos to live a healthier lifestyle. Outlook Manufacturers will continue to align their marketing campaigns with emerging trends in the local landscape. Even though tri-media campaigns and other traditional advertising efforts are expected to remain popular in the medium term, manufacturers of packaged food will increasingly use new schemes in order to reach consumers. The use of social media is expected, especially for mid-priced and premium brands, which are geared towards the high end of the market. Filipinos‟ improved access to the internet via cheaper subscription plans, wider coverage and the availability of cheaper smartphones and tablets will all contribute to the popularity of social networking sites and the use o f the internet in purchasing decisions. Social networking sites such as Facebook and Twitter are expected to be seen from more manufacturers in the medium term. Manufacturers will continue to refer buyers to their fan pages, and will even use their traditional advertising campaigns to inform consumers about their online presence. Using social networks will facilitate direct interaction between companies and consumers. By posting relevant posts and helpful tips, companies can strengthen their brand image whilst they deepen their relationship and involvement with customers. An online presence is also seen to be a lower-cost alternative than television advertising, and could be used especially when tapping small consumer groups. Meanwhile, companies are also expected to work on aligning their marketing campaigns to serve the growing interests of the Filipino population. As consumers are becoming more informed about health and nutrition, marketing campaigns are expected to involve more experts, and studies about the health benefits of products. This is especially true amongst middle-income consumers. The use of sporting activities as a means to engage and capture the interest of health-conscious Filipinos will also be popular in the medium term. Aside from organising fun runs, manufacturers are expected to be more creative, and could support oth er fitness activities, such as marathons, cycling, swimming and others.


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FOODSERVICE – KEY TRENDS AND DEVELOPMENTS

Headlines 

Foodservice volume demand continues to improve, on the back of the dynamic performance of consumer foodservice

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Frozen processed poultry is the fastest volume growth with 7% in 2013

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Other RTE cereals contracts by 6% in volume terms in 2013

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The total number of consumer foodservice outlets inches up by 1% in 2012

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Foodservice faces bright prospects

Trends – Sales To Foodservice 

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There remained strong demand for packaged food from consumer foodservice in 2013. This was driven by the dynamic eating-out trend in the Philippines as the economy improved. The emergence of high-income young professionals maintained the growth in fa st food and fullservice restaurants. This significantly improved demand amongst chained consumer foodservice players for packaged food. Frozen processed food is expected to be among the fastest growth in 2013, with volume sales jumping by 5%. It should be noted that frozen processed poultry reported a stellar performance during recent years, as consumer foodservice giant Jollibee Foods Corp introduced its chicken nugget meal in the market. Catering to children, these products continued to experience strong demand in 2013. In addition, breakfast meals are gaining popularity in the market, thereby contributing to t he strong demand for well-loved p rocessed food including hot dogs, longganisa and tocino, amongst others. The demand for other RTE cereals continued to decline, with volume sales expected to contract by 6% in 2013. For breakfast, Filipinos continue to prefer rice and ulam, which is usually frozen processed meat products. Other RTE cereals declined in both retail and foodservice volumes due to consumers‟ preference for children‟s breakfast cereals. Local manufacturers Universal Robina Corp and San Miguel Pure Foods are amongst the largest players in consumer foodservice. Aside from serving chained consumer foodservice brands, these two companies also serve the needs of smaller independent players, especially bakeries and carinderias. On the other hand, Unilever Foods Philippines (CMC), Del Monte Pacific and Southeast Asia Foods are amongst the biggest suppliers of sauces, dressings and condiments to consumer foodservice players.

Trends – Foodservice 

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During 2012, consumer foodservice in the Philippines was accelerating, benefiting from the dynamic performance of the Philippine economy. Eating-out amongst urban households has become more frequent, whilst the expansion of chained fast food and full -service restaurants in key cities nationwide has also generated d emand from middle-income consumers in these locations. In 2012 the number of consumer foodservice outlets increased by 1%. In terms of foodservice sales, a volume increase of 5% is e xpected in 2013. Eating-out is still a favourite family bonding activity amongst Filipino households. For young professionals, eating-out is a form of relaxation and indulgence. The faster pace of life in the country encourages consumers to spend on eating-out and o ther leisure activities. This trend is supported by the increasing level of income amongst urban workers.


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Despite the increasing frequency of eating out, most Filipinos still eat at home most of the time. Most Filipino households consider eating out as a weekly affair, whilst busy professionals eat out more often. Thus, there i s not yet much interplay between packaged food and consumer foodservice. In recent years, packaged food manufacturers tried to l aunch flavours from popular consumer foodservice cuisine. For instance, manufacturers of noodles cashed-in on the popularity of Chinese and Korean cuisine in consumer foodservice by launching Chinese and Korean flavours.

Prospects 

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The packaged food market will continue to benefit from the bright prospects for consumer foodservice in the Philippines. As consumer foodservice players eye untapped p rovincial locations, the demand for packaged food is expected to expand in order to serve their needs. Meanwhile, the niche of more affluent consumers in Metro Manila could lead to the opening of high-end consumer foodservice brands, and offers opportunities to imported and premium packaged food products. Foodservice volumes in the Philippines are expected to continue to experience growth over the forecast period. With the expansion of more international or local chained consumer foodservices players in the Philippines expected in the forecast period, demand for foodservice is likely to grow. The growing incomes of c onsumers and the higher demand for convenience are likely to drive this growth. Compared with the review period, foodservice volume sales are expected to be slower as the market matures. There is an opportunity to increase the frequency of e ating-out in the country, but this will be limited to Metro Manila and other key cities. Furthermore, newly opened outlets in the provinces will not yield the same level of transactions generated by citybased outlets. Thus, despite the opening of more outlets, the transactions per outlet could decline. Manufacturers of packaged food catering to foodservice companies will continue to keep themselves competitive via keeping their unit prices stable. It should be noted that price will remain a primary consideration of foodservice players. However, customisability of products, good customer service and stable supply will also affect the purchasing decision. Strategic partnerships between customers and suppliers will be strengthened through the use of technology which connects the operations between these two players, allowing both to be more efficient and responsive to needs which arise.

Category Data Table 1

Foodservice Sales of Packaged Food by Category: Volume 2008-2013

'000 tonnes

Baby Food Bakery Canned/Preserved Food Chilled Processed Food Confectionery Dairy Dried Processed Food Frozen Processed Food Ice Cream Meal Replacement


2008

2009

2010

2011

2012

2013

102.6 31.4 15.6 2.8 49.1 47.3 57.8 3.0 -

103.2 33.3 16.6 2.9 49.8 49.8 66.3 3.0 -

104.8 35.3 17.5 2.9 50.6 52.8 74.5 3.1 -

106.5 37.2 18.4 3.0 51.4 54.7 78.9 3.1 -

108.3 39.1 19.3 3.1 52.3 56.7 83.2 3.1 -

110.3 41.0 20.2 3.1 53.1 58.3 87.6 3.2 -

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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:

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13.7 114.5 14.9 0.3 47.8

14.3 120.1 16.4 0.3 49.9

14.8 126.6 18.3 0.3 51.8

15.4 132.2 19.1 0.3 53.7

15.9 138.0 20.1 0.3 55.4

16.4 144.2 20.7 0.3 57.1

0.3 3.6 17.8 59.0

0.4 3.6 18.4 60.0

0.4 3.6 19.0 61.3

0.4 3.7 19.5 62.7

0.4 3.7 20.0 64.0

0.4 3.8 20.4 65.4

281.6 153.3 493.4

290.7 166.7 516.9

302.1 179.8 542.6

311.3 188.9 562.3

321.2 197.8 582.4

330.9 206.7 602.4

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 20082013

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

2012/13

2008-13 CAGR

2008/13 Total

1.8 4.7 4.8 2.0 1.6 2.7 5.2 1.6 3.2 4.5 3.0 2.6 3.0 4.4 1.6 2.2 2.1 3.0 4.5 3.4

1.5 5.4 5.3 2.0 1.6 4.3 8.7 1.4 3.7 4.7 6.9 3.0 3.6 4.0 1.1 2.8 2.1 3.3 6.2 4.1

7.5 30.3 29.6 10.4 8.3 23.2 51.4 7.1 19.8 25.9 39.3 16.0 19.5 21.5 5.6 15.0 10.8 17.5 34.8 22.1


Table 3

Forecast Foodservice Sales of Packaged Food by Category: Volume 20132018

'000 tonnes

Baby Food


2013

2014

2015

2016

2017

2018

-

-

-

-

-

-

8


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:

Passport

110.3 41.0 20.2 3.1 53.1 58.3 87.6 3.2 16.4 144.2 20.7 0.3 57.1

112.4 42.8 21.2 3.2 54.0 59.7 91.9 3.3 16.9 150.9 21.3 0.3 58.7

114.7 44.7 22.1 3.3 54.9 61.0 95.7 3.3 17.4 158.0 21.8 0.3 60.3

117.1 46.5 22.9 3.3 55.8 62.3 99.6 3.4 17.9 165.6 22.3 0.3 61.8

119.7 48.4 23.8 3.4 56.8 63.4 103.4 3.4 18.3 173.8 22.8 0.3 63.3

122.5 50.2 24.7 3.5 57.8 64.4 107.0 3.5 18.7 182.6 23.2 0.3 64.7

0.4 3.8 20.4 65.4

0.4 3.9 20.8 66.8

0.5 3.9 21.2 68.2

0.5 4.0 21.5 69.6

0.5 4.0 21.7 71.1

0.5 4.1 21.9 72.6

330.9 206.7 602.4

341.2 215.4 622.7

352.0 223.6 643.0

363.3 231.7 663.9

375.1 239.8 685.2

387.6 247.5 706.9

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

Table 4

Forecast Foodservice Sales of Packaged Food by Category: % Volume Growth 2013-2018

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

2017/18

2013-18 CAGR

2013/18 Total

2.3 3.7 3.5 2.4 1.7 1.6 3.6 2.4 2.2 5.0 1.8 1.7 2.2 6.2 1.5 1.0 2.1 3.3 3.2 3.2

2.1 4.2 4.0 2.3 1.7 2.0 4.1 2.0 2.6 4.8 2.3 2.0 2.5 5.3 1.6 1.4 2.1 3.2 3.7 3.3

11.0 22.6 21.8 11.8 8.8 10.5 22.2 10.4 13.8 26.6 11.9 10.6 13.2 29.5 8.1 7.4 10.9 17.1 19.8 17.4



9


IMPULSE AND INGULGENCE PRODUCTS – KEY TRENDS AND DEVELOPMENTS

Headlines 

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Impulse and indulgence products increases by 5% in current value terms to reach Ps124.0 billion in 2013 Improving incomes in the Philippines help to boost demand Biscuits sees the most dynamic performance, with sales increasing by 7% in current value terms in 2013

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Unit prices increase in all categories except snack bars

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Universal Robina Corp accounts for the highest value share of 22% i n 2013

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Impulse and indulgence products is expected to see a constant value CAGR of 3% in the forecast period

Trends 

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Impulse and indulgence products is expected to increase by 5% in current value terms in 2013, supported by increasing purchasing power amongst Filipino consumers. The better performance of the Philippine economy allowed incomes to rise, especially amongst urban dwellers. Impulse and indulgence products offer convenience and relaxation to consumers with a faster pace of life. Being readily consumable and available, these products can be convenient as snacks. Products such as ice cream, chocolate confectionery and cakes serve as a treat after a long day‟s work. Compared with 2012, when impulse and indulgence products increased by 5% in current value terms, 2013 is expected to see a slightly better performance. This is due to the aboveexpected performance of the Philippine economy and the l ocal elections, which brought more job opportunities. Smaller categories such as cakes, ice cream and pastries also remained dynamic as the market e xpanded. Biscuits is expected to see the strongest growth in impulse and indulgence products in 2013. Sales of biscuits are expected to increase by 7% in current value terms, as manufacturers‟ aggressive marketing campaigns came to fruition. Leading players such as Republic Biscuit Corp, Monde Nissin Corp and Mondelez Philippines all heavily invested in tri-media campaigns which were aimed at generating better demand amongst school children. The emphasis on health benefits via the p roducts‟ nutritional content was successful in making biscuit brands from these companies the number one choice as school snacks. Snack bars is expected to remain the smallest and slowest growing category in i mpulse and indulgence products in 2013. There are only a few of brands available, and availability remains limited. The dominance of higher-priced imported products makes unit prices prohibitive. Furthermore, snack bars are n ot commonly consumed as snacks, but as a supplement for health-conscious and active consumers. In 2013 current value sales of these products are expected to decline by 1%, whilst volume sales are expected to recover by 4%. The increasing demand for lower-priced local brand NutriBar facilitated th is contrasting trend in volume and value terms. Proximity is one of the most important considerations when consumers purchase impulse and indulgence and products. Although modern grocery retail channels such as supermarkets and convenience stores continue to increase their contribution, traditional ou tlets such as sari-sari


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stores remain the key distribution channels for these products. Located in neighbourhoods, Filipinos often buy sweet and savoury snacks, biscuits and confectionery from these channels. 

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There were no significant changes in the packaging of impulse and indulgence products in 2013. Most impulse and indulgence categories saw 2-3% price increases in 2013. These slight price increases were due to the increasing prominence of mid -priced and upscale brands in urban areas. Even though price is still a very important factor in the purchasing decision, middle income consumers, especially young professionals, are willing to pay a premium for comfort products such as ice cream, sweet and savoury snacks, chocolate confectionery and cakes.

Competitive Landscape 

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As the leader in biscuits, confectionery and sweet and savoury snacks, Universal Robina Corp accounts for the highest value share in impulse and indulgence products. The local manufacturer is expected to account for a 22% share of value sales in 2013. The company‟s largest brands include Jack „n‟ Jill in sweet and savoury snacks and Maxx in medicated confectionery. Universal Robina Corp‟s thrust in creating products which suit the taste profile and purchasing power of local consumers helped it to gain loyalty amongst consumers. Impulse and indulgence products is dominated by domestic players. Following Universal Robina Corp are Monde Nissin Corp and Liwayway Marketing Corp. The top three companies in impulse and indulgence products are e xpected to account for a 33% share of sales in 2013, whilst producers of artisanal offerings will account for another 7%. In 2013, it is estimated that local brands accounted for 60% of total sales in impulse and indulgence products. The dominance of local brands in the Philippines is largely attributable to their more competitive pricing compared with multinationals. Impulse and indulgence products are usually consumed as snacks in the Philippines. Filipinos often have two snack sessions, one in the morning and one in the afternoon. Most Filipinos choose more affordable products. Local players‟ aggressive marketing campaigns also enabled th em to maintain consumers‟ loyalty and interest in their brands. Multinational companies focus on serving categories where the presence of local players is limited or weak, including snack bars and ice cream. Another strategy employed by foreign companies is tapping into middle-income and more affluent consumers. Multinational companies are able to push their brands by positioning them as better-quality, thereby warranting the higher price. In bi scuits and confectionery, Mondelez Philippines positions its products for middle-income consumers to generate demand. The leader Universal Robina Corp continued to beef -up its impulse snacks through the launch of Jack „n‟ Jill Nova Vegie Good Yogurt and Onion. The newly launched b rand taps into the growing number of health-conscious consumers in the Philippines. Made solely from vegetable ingredients (primarily peas), this new brand takes advantage o f the strong health positioning of Nova as a multigrain snack. The use of yoghurt flavours also emphasises its health positioning, as yoghurt is perceived to be a health food in the Philippines. Nestlé Philippines took advantage of the increasing affluence of urban Filipino consumers through the launch of Nestlé Ice Cream Temptations Flavours of the World. Available in three western flavours, namely Belgian Chocolate Praline, French Salted Caramel and Italian Coffee Affogato, this new product taps into young professionals, who are very interested in new and indulgent ice cream flavours. Nestlé Ice Cream Temptations Flavours of the World stirred the interest of its target market through its promotional campaigns, which included the


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use of ice cream trucks which provide free ice cream at business hubs, and the launch of the Flavours of the Ice Cream Festival, which featured musical performances. 

Marketing campaigns were essential in strengthening the positioning of brands in the local market. Although tri-media advertising campaigns remained the most popular way of reaching the mass-market, manufacturers also continued to look i nto newer and more innovative ways of engaging consumers and gaining their loyalty. Chocolate confectionery brands Kit Kat and Snickers both encouraged workers to take a break, relax and satisfy their hunger through their “Break Movement” and “You‟re Not You When You‟re Hungry” campaigns. Although these campaigns were highly advertised in print and on television, these campaigns were also strongly supported by social media. Ice cream brand Selecta and filled biscuits brand Oreo emphasise the Filipino value of family togetherness.

Prospects 

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Impulse and indulgence products are expected to experience a CAGR value growth of 3% in constant terms over the forecast period. The increasing population in the country, coupled with the expected dynamic economic growth, will provide a good environment for th e growth of impulse and indulgence products. As a result, the growth over the f orecast period is expected to outpace the CAGR growth rate experienced during the historic period which grew by 1% CAGR in constant value. Biscuits will remain a bright spot in impulse and indulgence products, with a constant value CAGR of 4%. The strategy of players of positioning their brands as healthy snacks for children, creating the perception that biscuits are more filling and healthier, could help to sustain healthy growth in the forecast period. The wide array of innovation possibilities in terms of flavours and packaging sizes could be used by manufacturers to expand their consumer base. In retail volume, snack bars is expected to e xperience a recovery over the forecast period at 5% CAGR. After experiencing heavy losses during the review period as a result o f strong competition from cheaper alternatives such as biscuits and confectionery, snack bars growth is expected to normalise as consumers seek healthier alternatives. Over the forecast period, it is expected that the base of health conscious consumers is expected to increase. Manufacturers will cash-in on the growing affluence in t he urban areas through the launch of indulgence products. Young professionals are expected to increase their spending on indulgence products, and will be willing to pay a premium for exciting launches and higherquality brands. Thus, the launch of more expensive and high-end brands in ice cream and chocolate confectionery is expected. Social media will be increasingly used in the marketing mix of manufacturers, especially those which cater to teenagers and middle-aged consumers. It is projected that social networking sites such as Facebook and Twitter will continue to be popular amongst these age groups. Wider internet access through smartphones and tablets could facilitate more frequent usage amongst these demographics. As such, manufacturers are expected to establish and strengthen their presence online in order to connect directly with consumers. Products positioned as high-end are also expected to benefit from social media buzz. Jack „n‟ Jill Nova Vegie Good and Nestlé Temptations Flavours of the World are both expected to see limited success in the market. Whilst Jack „n‟ Jill Nova Vegie Good‟s launch coincided with the increasing health-consciousness in the country, its appeal will be limited to a few consumers who are also willing to pay a higher price. The availability of other extruded snacks brands, such as Marty‟s, which are also marketed as healthy, will be a challenge. Nestlé Temptations Flavours of the World‟s high pricing strategy is prohibitive, and will limit sales to only a fe w more affluent consumers.


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Passport


Sales of Impulse and Indulgence Products by Category: Volume 2008-2013

tonnes

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

2008

2009

2010

2011

2012

2013

87,033.6 43,649.3 30,177.4 114,047.0 42,061.2 116,604.8 19.6 433,592.8

88,018.8 43,624.1 30,085.5 119,204.4 42,755.1 121,230.0 16.8 444,934.7

89,274.7 44,203.1 30,358.2 124,693.4 43,851.7 125,971.5 16.1 458,368.7

87,689.9 44,919.6 30,629.4 130,516.6 45,770.9 131,247.7 8.4 470,782.6

87,251.8 45,692.6 30,901.1 136,919.0 47,880.6 136,541.3 0.7 485,187.2

88,591.0 46,525.9 31,206.2 143,418.1 48,817.9 141,908.0 0.8 500,467.9


Table 6

Sales of Impulse and Indulgence Products by Category: Value 2008-2013

Ps million


2008

2009

2010

2011

2012

2013

28,018.1 5,827.8 8,067.5 18,891.4 7,889.8 29,601.8 14.8 98,311.1

28,808.9 6,093.4 8,302.0 20,038.5 8,176.7 31,896.2 12.6 103,328.2

29,676.7 6,382.2 8,578.2 21,355.2 8,547.8 33,340.0 12.2 107,892.4

29,725.4 6,720.2 8,896.0 22,906.4 8,914.2 35,394.4 6.6 112,563.1

30,054.4 7,103.6 9,202.5 24,735.7 9,414.2 37,682.2 0.9 118,193.6

30,896.5 7,536.0 9,490.9 26,569.2 9,830.2 40,149.2 0.9 124,472.9


Table 7

Sales of Impulse and Indulgence Products by Category: % Volume Growth 2008-2013

% volume growth


2012/13

2008-13 CAGR

2008/13 Total

1.5 1.8 1.0 4.7 2.0 3.9 3.9 3.1

0.4 1.3 0.7 4.7 3.0 4.0 -47.8 2.9

1.8 6.6 3.4 25.8 16.1 21.7 -96.1 15.4



13


Table 8

Passport

Sales of Impulse and Indulgence Products by Category: % Value Growth 2008-2013

% current value growth


2012/13

2008-13 CAGR

2008/13 Total

2.8 6.1 3.1 7.4 4.4 6.5 -0.7 5.3

2.0 5.3 3.3 7.1 4.5 6.3 -43.3 4.8

10.3 29.3 17.6 40.6 24.6 35.6 -94.1 26.6


Table 9

NBO Company Shares of Impulse and Indulgence Products: % Value 20092013

% 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 SPI Corp Regent Foods Corp Wrigley Philippines Inc Goldilocks Bake Shop Inc Leslie Corp Hershey Philippines Inc Procter & Gamble Philippines Inc Mars Philippines Inc Big E Food Products Suncrest Foods Inc Red Ribbon Bake Shop Inc Frito-Lay Co San Miguel Pure Foods Co Inc Grand Alphatech International Corp Martinez & Co Inc,


2009

2010

2011

2012

2013

20.6 6.3 4.0 3.5

21.0 6.6 4.0 3.7

21.5 6.8 4.1 3.7

22.0 7.0 4.2 3.9

22.3 7.2 4.3 3.9

4.0 2.7 2.4 2.1 2.1

3.5 2.7 2.4 2.2 2.1

3.4 2.7 2.4 2.2 2.1

3.4 2.7 2.5 2.3 2.1

3.4 3.3 2.8 2.5 2.3 2.1

1.6 1.5

1.6 1.5

1.7 1.5

1.7 1.6

1.7 1.6

1.7

1.7

1.6

1.6

1.6

1.4 1.7 1.4 1.6 0.9 0.9 1.2 0.8

1.4 1.7 1.4 1.6 1.0 1.0 1.1 0.8

1.5 1.6 1.4 1.4 1.0 1.0 1.0 0.9

1.5 1.5 1.5 1.3 1.1 1.0 1.0 0.9

1.5 1.5 1.4 1.2 1.1 1.1 0.9 0.9

0.9 0.8 0.7 0.6 0.6 0.7

0.9 0.8 0.7 0.7 0.6 0.7

0.9 0.8 0.7 0.7 0.7 0.7

0.9 0.8 0.7 0.7 0.7 0.7

0.8 0.8 0.7 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

14


Felicisimo Ferrero Group Cadbury Adams Philippines Inc First Choice Food Corp Artisanal Others Total Source:

Passport

0.5 2.1

0.5 -

0.5 -

0.5 -

0.5 -

0.5 6.8 21.9 100.0

6.7 24.1 100.0

6.6 23.6 100.0

6.5 22.8 100.0

6.2 19.1 100.0


Table 10

LBN Brand Shares of Impulse and Indulgence Products: % Value 2010-2013

% retail value rsp Brand Jack 'n' Jill Sky Flakes Oishi Selecta Nagaraya Tobi Maxx Rebisco Happy Nestlé Growers Goldilocks Leslie's Mentos Goya Eggnog Pringles Bingo Regent Fita Lemon Square Granny Goose Doublemint Red Ribbon Oreo Magnolia Chips Delight Knick Knacks Tempura La Pacita Oreo Artisanal Others Total


Company 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 Nestlé Philippines Inc GFI Enterprises Inc Goldilocks Bake Shop Inc Leslie Corp Perfetti Van Melle Philippines Inc Delfi Foods Philippines Inc Monde Nissin Corp Procter & Gamble Philippines Inc Monde Nissin Corp Regent Foods Corp Monde Nissin Corp Big E Food Products Universal Robina Corp Wrigley Philippines Inc Red Ribbon Bake Shop Inc Mondelez Philippines Inc San Miguel Pure Foods Co Inc Grand Alphatech International Corp Delfi Foods Philippines Inc Regent Foods Corp Martinez & Co Inc, Felicisimo Kraft Foods (Philippines) Inc

2010

2011

2012

2013

17.4 3.4 3.2 3.3 2.7 2.3 2.4 1.7 1.6 1.5 1.4 1.0 1.0 1.1

17.9 3.6 3.3 3.3 2.7 2.3 2.3 1.8 1.7 1.5 1.5 1.0 1.0 1.0

18.3 3.7 3.3 3.4 2.7 2.3 2.2 1.8 1.7 1.6 1.5 1.1 1.0 1.0

18.7 3.8 3.4 3.4 2.8 2.3 2.2 1.8 1.7 1.6 1.5 1.1 1.1 1.0

0.9

0.9

1.0

1.0

0.9 0.8

0.9 0.9

0.9 0.9

0.9 0.9

0.7 0.9 0.7 0.8 0.7 0.7 0.7 0.7

0.8 0.9 0.7 0.8 0.7 0.7 0.7 0.7

0.8 0.9 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

0.6

0.6

0.6

0.5

0.5

0.6

0.6

0.5 0.6

0.5 0.6

0.6 0.6

0.6 0.5

0.6

0.6

0.6

-

6.7 38.0 100.0

6.6 37.1 100.0

6.5 35.9 100.0

6.2 35.4 100.0

15


Source:

Passport


Table 11

Forecast Sales of Impulse and Indulgence Products by Category: Volume 2013-2018

tonnes


2013

2014

2015

2016

2017

2018

88,591.0 46,525.9 31,206.2 143,418.1 48,817.9 141,908.0 0.8 500,467.9

90,313.1 47,562.9 31,589.6 150,131.6 49,814.1 146,927.4 0.8 516,339.4

92,236.3 48,660.3 31,978.1 157,027.4 50,751.1 151,719.5 0.8 532,373.6

94,394.7 49,902.3 32,452.6 164,215.6 51,904.6 157,054.8 0.9 549,925.4

96,744.0 51,247.4 33,018.0 171,859.2 53,232.8 162,843.6 0.9 568,946.0

99,275.5 52,666.5 33,643.7 179,835.1 54,693.6 169,029.2 1.0 589,144.6


Table 12

Forecast Sales of Impulse and Indulgence Products by Category: Value 20132018

Ps million


2013

2014

2015

2016

2017

2018

30,896.5 7,536.0 9,490.9 26,569.2 9,830.2 40,149.2 0.9 124,472.9

31,040.5 7,649.1 9,590.7 27,648.7 10,075.8 41,471.1 0.8 127,476.8

31,319.8 7,761.9 9,683.7 28,752.7 10,312.2 42,677.4 0.8 130,508.6

31,698.9 7,892.2 9,823.7 29,906.2 10,597.3 44,043.8 0.8 133,962.9

32,162.9 8,035.3 9,992.7 31,143.4 10,922.2 45,549.0 0.8 137,806.3

32,691.1 8,191.6 10,185.0 32,432.6 11,278.4 47,128.8 0.8 141,908.3


Table 13

Forecast Sales of Impulse and Indulgence Products by Category: % Volume Growth 2013-2018

% volume growth


2017/18

2013-18 CAGR

2013/18 Total

2.6 2.8 1.9 4.6 2.7 3.8 5.0 3.6

2.3 2.5 1.5 4.6 2.3 3.6 4.7 3.3

12.1 13.2 7.8 25.4 12.0 19.1 25.9 17.7



16


Table 14

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Forecast Sales of Impulse and Indulgence Products by Category: % Value Growth 2013-2018

% constant value growth 2013-18 CAGR

2013/18 TOTAL

1.1 1.7 1.4 4.1 2.8 3.3 -2.4 2.7

5.8 8.7 7.3 22.1 14.7 17.4 -11.2 14.0



MEAL SOLUTIONS – KEY TRENDS AND DEVELOPMENTS

Headlines 

Meal solutions sees strong 6% current value growth in 2013, with sales reaching Ps115.0 billion

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Increasing demand for convenience maintains growth in meal solutions



Ready meals surpasses all other categories, with current value growth of 7%

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The average unit price of meal solutions increases by 3% in 2013

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The Purefoods-Hormel Co leads meal solutions with a value share of 22% in 2013

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Meal solutions is expected to see a constant value CAGR of 3% over the forecast period

Trends 

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2013 saw rapid economic growth in the Philippines, which brought about stronger consumer confidence. This economic trend was helpful in sustaining the moderate growth i n meal solutions in 2013. Meal solutions is expected to increase by 6% in current value terms, which is on a par with the 7% growth in 2012. By 2013, it is estimated that sales will reach Ps115.0 billion. Faster-paced lifestyles, especially amongst urban consumers, stimulated demand for convenience products such as ready meals, frozen and chilled processed food and canned/preserved food. Meal solutions offer easy and convenient alternatives for college students and workers. The growing number of flavours available in the market offers a wide choice to consumers, whilst the availability of sachet and p ouch packaging makes these products affordable to all income levels. Ready meals is expected to see the fastest growth in meal solutions in 2013. Contributing sales of Ps3.4 billion to the overall sales of Ps115.0 billion in meal solutions, ready meals is still at a dynamic stage, with huge room for growth. In 2013, manufacturers continued to beefup their portfolios, and offered new flavours and dishes to consumers. These new alternatives stimulated consumers‟ interest and added to the available choices.


17


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As the biggest category, sauces, dressings and condiments is expected to see the slowest growth in sales, increasing by 6% in current value terms. This still moderate performance reflects Filipino households‟ growing use of readily available p roducts in home meal preparations. During recent years manufacturers were keen to launch products which allowed consumers to prepare a wider range of dishes at home more conveniently. The emphasis on cost and time efficiency in using sauces, dressings and condiments stimulated demand from both rural and urban dwellers. The distribution of meal solutions is largely undertaken by supermarkets and traditional channels such as sari-sari stores. The share of supermarkets is on an upwards trend, as chained players such as SaveMore and Puregold Jr open up more neighbourhood supermarkets in Metro Manila and in key cities nationwide. Other modern grocery channels, such as hypermarkets and convenience stores, are a lso becoming more significant channels for sales of meal solutions, because of the growth in outlet numbers and proximity to highincome locations. The average unit price of meal solutions is expected to increase by 3% in 2013. This price increase was mainly due to the increase in tin prices in the global market, which also pushed up the cost of canned/preserved food. Price is a very important factor in the purchasing decisions of Filipino consumers. Filipinos remain value-conscious, value being attributed to the affordability of a product. As such, manufacturers continue to find ways to bring down the costs and prices of their products. Stand-up pouch packaging gained popularity in recent years. Brands such as Mega Sardines, Fresca Tuna, Del Monte Pineapple, Del Monte Fruit Snacks and Hunt‟s Pork „n Beans are all available in pouch packaging.


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The Purefoods-Hormel Co is the largest manufacturer of meal solutions in th e Philippines. The company‟s flagship brand Purefoods is strong in canned/preserved meat and meat products, chilled processed meat, frozen processed red meat and frozen processed poultry. In 2013 the company is expected to account for a 22% share of value sales in meal solutions. The leadership of the company is attributable to the strong loyalty of consumers to its products, which is sustained with exciting product launches and aggressive marketing campaigns. Despite the company‟s higher pricing strategy, its products are pe rceived as higher quality than other b rands. Domestic players lead meal solutions, with players such as CDO Foodsphere and Century Canning Corp following the leader. It is estimated that local companies accounted for a 70% share of overall sales in meal solutions in 2013. Whilst multinationals dominate in smaller categories such as sauces, dressings and condiments, soup and dessert mixes, local players excel in categories in which logistics limit the operation of multinationals. These categories include canned/preserved food, chilled processed food and frozen processed food. The success of a product in meal solutions is often highly dependent on th e marketing campaign launched to support the introduction and growth of the brand. New brands in the market often benefit from high-profile endorsements which generate a buzz and curiosity from consumers. Innovation is a very important part of players‟ strategies, as consumersare increasingly demanding variety. Filipinos are brand-conscious and are loyal to their favourite brands. However, they can be encouraged to try other brands through promotional pricing and even advertising schemes. During 2013, manufacturers continued to invest in advertising campaigns to increase consumers‟ awareness of new product launches. CDO Foodsphere launched tri-media campaigns to strengthen the position of i ts CDO Idol Cheesedog brand and its newly launched CDO Karne Norte Afritada and Kaldereta. Meanwhile, the leader The Purefoods-


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Hormel Co remained aggressive in differentiating its Purefoods Tender Juicy Hotdog brand from other lower-priced alternatives in the market. The company continued its long -running “Kids Can Tell” campaign, which emphasises the well-loved taste of its p roduct. 

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One of the most exciting launches in meal solutions was Maggi Magic Meals. Appealing to busy mothers, workers and college students, Maggi Magic Meals is an innovative product that cuts cooking time by allowing the consumer to cook t heir favourite ulam together with rice. Maggi Magic Meals is a powdered recipe mix with a plastic bag, into which the user can put meat, vegetables and the recipe mix. The plastic bag containing the ingredients is placed in the rice cooker, and cooks whilst the rice cooks. Hunt-Universal Robina Corp tried to bring excitement to the market through the launch of its Hunt‟s Chili Beef and Beans in November 2012. This new product is available in a stand-up pouch, allowing it to be priced at Ps13.80 per 100g. The new packaging boosts of ease in opening and reheating, making it suitable for people on-the-go. Standard products dominate meal solutions. Filipinos‟ loyalty to standard brands cements the dominance of these products. There are a number of imported premium brands available, although their shares remain very small. Economy brands are gaining prominence, with the popularity of smaller single-serve packaging and stand-up pouches.

Prospects 

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







Meal solutions will benefit from the upwards trend in incomes, as the Philippine economy is expected to enter a rapid growth phase in the medium term. The creation of more jobs in the country does not only lead to higher disposable incomes, but also increases demand for convenient products. Filipino consumers‟ confidence will also remain strong amidst these developments, thereby furthering the demand for meal solutions. Meal solutions is expected to see a constant value CAGR of 3% over the forecast period. Growth is expected to remain stable due to the better economic prospects expected in the future. Growth for meal solutions will be driven by the continued demand for convenience as more consumers have less time to cook and prepare meals. Rising health-consciousness in the Philippines threatens to limit purchases amongst middleincome consumers. It should be noted that educated consumers are becoming increasingly wary of consuming processed products, especially those which are laden with preservatives. However, the number of these buyers remains small compared with the overall consumer base. Furthermore, the availability of brands which are marketed as healthy alternatives is small. Better for you products and fortified products are perceived as generally healthy. Manufacturers are expected to focus on expanding their product lines to offer more flavours. Consumers‟ demand for variety will be met through the availability of products which feature Filipino dishes, although there is the opportunity of launching new Asian flavours, recognising the popularity of Japanese and Korean cuisine in the Filipino market. Tri-media campaigns will remain the most popular for advertisements, although manufacturers are expected to increasingly tap into social media and social networking sites to advertise their products. This is e specially true as meal solutions are geared towards busy individuals who typically frequently access and update their Facebook and Twitter accounts. The use of Facebook fan pages and Twitter allows for direct communication between consumers and manufacturers, and could allow the establishment of a rapport between brands and buyers. Ready meals is expected to continue to see the fastest growth in meal solutions, with a constant value CAGR of 5% over the next five years. Consumers are expected to be increasingly interested in ready meals brands which contain both meat and vegetables.


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Stand-up pouch packaging could also increase the consumer base of ready meals, to include lower-income consumers. 

The average unit price of meal solutions might decline in the medium term, due to the popularity of pouch packaging. The increasing popularity of economy brands, especially in canned/preserved food, frozen processed food and chilled processed food, is also expected to bring unit prices down in the next five years.


Sales of Meal Solutions by Category: Volume 2008-2013

'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:

2008

2009

2010

2011

2012

2013

11.2 212.9 99.1 0.3 80.0 178.9

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

13.8 267.4 119.9 0.4 96.0 217.3

3.8 586.2

3.9 611.5

4.0 639.0

4.2 668.1

4.3 694.2

4.5 719.2


Table 16

Sales of Meal Solutions by Category: Value 2008-2013

Ps million


2008

2009

2010

2011

2012

2013

2,438.2 25,078.2 22,943.7 117.2 13,785.4 19,062.9

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

3,440.9 35,483.7 32,005.3 149.6 17,853.1 25,001.7

1,123.0 84,548.4

1,220.3 89,733.1

1,317.1 95,219.4

1,423.7 101,951.8

1,540.4 108,884.0

1,635.5 115,569.8


Table 17

Sales of Meal Solutions by Category: % Volume Growth 2008-2013

% volume growth

Ready Meals Canned/Preserved Food Frozen Processed Food Dessert Mixes


2012/13

2008-13 CAGR

2008/13 Total

4.6 4.2 3.3 3.4

4.2 4.7 3.9 3.0

22.7 25.6 21.0 15.8

20


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

3.3 3.1 3.5 3.6

3.7 4.0 3.3 4.2

20.0 21.5 17.4 22.7


Table 18

Sales of Meal Solutions by Category: % Value Growth 2008-2013



2012/13

2008-13 CAGR

2008/13 Total

7.4 6.7 5.9 5.0 6.1 5.5 6.2 6.1

7.1 7.2 6.9 5.0 5.3 5.6 7.8 6.5

41.1 41.5 39.5 27.7 29.5 31.2 45.6 36.7


Table 19

NBO Company Shares of Meal Solutions: % Value 2009-2013

% retail value rsp Company Purefoods-Hormel Co Inc, The CDO Foodsphere Inc Century Canning Corp Unilever Foods Philippines (CMC) Del Monte Philippines Inc Ajinomoto Philippines Corp Pacific Meat Co Inc A Tung Chingco Trading SM Retail Inc RFM Corp 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 UFC Philippines Inc Silver Swan Mfg Corp Inc Sara Lee Corp


2009

2010

2011

2012

2013

22.3

21.7

21.9

22.2

22.3

6.3 6.8 5.1

6.8 7.0 5.2

7.1 7.0 5.2

7.3 7.0 5.2

7.4 7.0 5.2

3.6 4.3

3.7 4.2

3.8 4.0

3.8 3.9

3.8 3.8

3.7 2.4 2.2 1.9 1.6

3.8 2.4 2.3 1.9 1.6

3.9 2.4 2.3 1.9 1.7

3.7 2.4 2.3 2.0 1.7

3.6 2.5 2.3 2.0 1.8

1.7 1.6 1.5 1.3

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

1.0 1.4

1.1 1.2

1.1 1.2

1.1 1.2

1.2 1.1

1.0 0.9 0.9 1.0

1.0 0.9 0.9 1.0

1.0 1.0 0.9 1.0

1.0 1.0 0.9 0.9

1.0 1.0 1.0 0.9

21


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

Passport

0.8 0.7 0.7

0.9 0.8 0.7

0.9 0.8 0.7

0.9 0.8 0.8

0.8 0.8 0.8

0.7 0.6

0.7 0.7

0.7 0.7

0.7 0.7

0.7 0.7

0.5 0.7 0.7 0.5

0.6 0.6 0.7 0.5

0.6 0.6 0.6 0.5

0.6 0.6 0.5 0.5

0.6 0.6 0.5 0.5

21.5 100.0

21.2 100.0

20.8 100.0

20.5 100.0

20.1 100.0


Table 20

LBN Brand Shares of Meal Solutions: % Value 2010-2013

% 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 Sara Lee Silver Swan Datu Puti Kraft Bambi Sarangani Bay Del Monte Mother's Best Master Bestfoods Mama Sita


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 RFM Corp 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 Sara Lee Corp Silver Swan Mfg Corp Inc Southeast Asia Food Inc Kraft Foods (Philippines) Inc Bambi Foods Mfg Corp Alson's Aqua Technologies Inc Del Monte Foods Co HDR Foods Corp Bagumbuhay Industrial Corp Unilever Foods Philippines (CMC) Marigold Commodities Corp

2010

2011

2012

2013

21.5

21.7

22.0

22.2

6.8 3.8 3.8 3.9 3.2 3.1 2.8

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

2.4 2.3 1.8 1.6

2.4 2.3 1.8 1.7

2.4 2.3 1.9 1.7

2.5 2.3 1.9 1.8

1.7 1.6

1.6 1.6

1.6 1.6

1.6 1.6

1.4 1.1 1.2

1.4 1.1 1.2

1.4 1.1 1.2

1.3 1.2 1.1

1.2 1.0 0.9 0.9 0.8

1.1 1.0 0.9 0.9 0.8

1.1 0.9 0.9 0.9 0.8

1.1 0.9 0.9 0.9 0.9

0.9 0.7

0.9 0.7

0.9 0.8

0.8 0.8

0.8 0.7 0.7 0.7

0.8 0.7 0.7 0.7

0.8 0.7 0.7 0.7

0.8 0.7 0.7 0.7

0.6

0.6

0.6

0.6

22


Maling Others Total Source:

Passport

B2 Maling Foods Corp

0.6 25.6 100.0

0.6 25.2 100.0

0.6 24.8 100.0

0.6 24.4 100.0


Table 21

Forecast Sales of Meal Solutions by Category: Volume 2013-2018

'000 tonnes


2013

2014

2015

2016

2017

2018

13.8 267.4 119.9 0.4 96.0 217.3

14.4 277.7 123.2 0.4 99.0 222.9

15.2 287.1 126.0 0.4 101.9 227.8

15.9 296.8 129.0 0.4 105.0 232.9

16.8 307.4 132.2 0.5 108.2 238.1

17.6 318.4 135.5 0.5 111.6 243.2

4.5 719.2

4.6 742.3

4.8 763.2

5.0 785.0

5.2 808.2

5.4 832.2


Table 22

Forecast Sales of Meal Solutions by Category: Value 2013-2018

Ps million


2013

2014

2015

2016

2017

2018

3,440.9 35,483.7 32,005.3 149.6 17,853.1 25,001.7

3,598.3 36,691.9 32,866.1 152.7 18,370.9 25,486.9

3,763.6 37,778.1 33,622.9 156.1 18,848.5 25,902.4

3,946.4 38,914.6 34,464.9 159.7 19,357.4 26,331.0

4,147.4 40,139.6 35,362.4 163.5 19,899.4 26,767.0

4,361.0 41,434.5 36,316.2 167.6 20,456.6 27,204.6

1,635.5 115,569.8

1,692.8 118,859.6

1,747.4 121,819.0

1,800.7 124,974.7

1,860.0 128,339.2

1,920.6 131,861.1


Table 23

Forecast Sales of Meal Solutions by Category: % Volume Growth 2013-2018

% volume growth

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


2017/18

2013-18 CAGR

2013/18 Total

5.2 3.6 2.5 3.9 3.1 2.2 3.8

5.1 3.5 2.5 3.7 3.1 2.3 3.8

28.1 19.1 13.1 19.9 16.3 12.0 20.6

23


Meal Solutions Source:

Passport

3.0

3.0

15.7


Table 24

Forecast Sales of Meal Solutions by Category: % Value Growth 2013-2018

% constant value growth


2013-18 CAGR

2013/18 TOTAL

4.9 3.1 2.6 2.3 2.8 1.7 3.3 2.7

26.7 16.8 13.5 12.0 14.6 8.8 17.4 14.1


NUTRITION/STAPLES – KEY TRENDS AND DEVELOPMENTS

Headlines 

Nutrition/staples sees 5% current value growth to reach Ps225.0 billion in 2013



Health-consciousness in the Philippines influences new product launches



Packaged/industrial bread sees the fastest growth in 2013, with a 10% current value increase



The average unit price in nutrition/staples sees a minimal increase in 2013



Nestlé Philippines leads nutrition/staples with a value share of 18% in 2013



Nutrition/staples is expected to see a constant value CAGR of 3 % in the forecast period

Trends 





Nutrition/staples benefited from population growth and the good economic performance of the Philippines in 2013. It is expected to see growth of 5% in current value terms, which is on a par with the 5% growth seen in 2012. Filipino consumers tend to improve their consumption of nutrition/staples as their incomes improve. The demand for these products remains largely contributed by middle-income consumers who buy from supermarkets. It should be noted that products such as rice, oils and fats, pl ain noodles and pasta are often sold loose in wet markets. Middle-income Filipino consumers are becoming more health-conscious. There i s an emerging consumer segment interested in purchasing and consuming products which are positioned as healthier alternatives. This health-consciousness led to the lau nch of better for you and fortified/functional products. Another effect was the increasing interest in products such as olive oil, brown rice, whole wheat bread and fresh/pasteurised milk, which are all marketed as being healthier than their counterparts. Packaged/industrial bread is expected to surpass all other categories in nutrition/staples in 2013, with sales jumping by 10%. This performance was buoyed by the faster pace of li fe amongst consumers, which strengthened the demand for convenient and easy to prepare


24


products. It should be noted that Filipinos are mainly rice eaters, but many urban dwellers are choosing to eat bread at meal times because of its ease of preparation. T he marketing campaign by the leader in packaged/industrial bread, Gardenia, was also very effective in stimulating demand for these products. 







Dairy is expected to see the slowest growth in 2013, with a current value increase of 3%. Dairy is already at a mature stage, although some categories, such as flavoured milk drinks and yoghurt, are still seeing rapid growth. The largest category in dairy, powder milk, was also adversely affected by the increase in age bands f or some toddler powder baby milk brands. The availability of baby food products which cater to the specific needs of different age groups led to strong competition with powder milk b rands for children. Supermarkets is the main distribution channel for nutrition/staples in the Philippines. Most middle-income consumers shop in supermarkets, where a wide array of brands and products is available. Traditional retailers such as sari -sari stores and health and beauty retailers also account for sizeable shares, and cater to mostly rural dwellers. In 201 3 the share of modern grocery retailers is expected to continue to rise, as chained brands expanded their outlet networks to cover more developing cities and municipalities nationwide. The average unit price in nutrition/staples is expected to see a minimal i ncrease in 2013. Manufacturers limited price increases in order to maintain robust demand. Smaller packaging is being launched in order to encourage more frequent consumption of products. Processed spreadable cheese brand Chiz Whiz launched its Ps20 squeezable pack, which stimulated demand from middle - and lower-income consumers. Meanwhile, pasta brand Del Monte introduced its single-serve merienda pack with pasta sauce, encouraging consumers to prepare pasta as a snack for their children.








Nestlé Philippines Inc, the local arm of Nestlé SA, is the largest manufacturer of nutrition/staples in the Philippines. The company dominates key categories such as dairy and baby food. In 2013 Nestlé Philippines‟s share is expected to reach 18%. The company continued to capitalise on strong consumer loyalty to its b rands, brought about by its long standing presence in the country. The company‟s health and wellness campaigns enabled it to position itself as an authority in nutrition. Multinational and local players have an eq ual footing in nutrition/staples. Whilst multinational brands lead in dairy, b aby food, breakfast cereals, meal replacement and spreads, domestic companies take the lion‟s share in oils and fats, rice, pasta and noodles. Itshould be noted that multinationals are stronger in t erms of research into intensive nutrition products, whilst local players lead in staples. Following Nestlé Philippines is local player Alaska Milk Corp, which is expected to see a share of 8% in 2 013, solely derived from dairy. Alaska dominates condensed/evaporated milk and is strong in powder milk through its wide array of well-loved brands. Meanwhile, the third largest player, San Pablo Manufacturing Corp, generates all its sales from oils and fats, an d is the undisputed leader in vegetable and seed oil. Other important players include Mead Johnson Philippines, which has a significant share in baby food, and Monde Nissin Corp, the leader in noodles. Despite increasing incomes in the Philippines, Filipino consumers remain generally priceconscious, and opt for value for money. Smaller packaging has successfully made products more affordable to lower- income consumers, as these smaller products enable brands to be distributed in traditional retailers such as sari-sari stores. During recent years smaller packaging allowed manufacturers to widen their consumer base and deepen their penetration.


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Another key success factor in nutrition/staples is intensive marketing campaigns which inform consumers about product benefits. Investment in tri-media campaigns, especially those featuring high-profile celebrities, is essential, especially in categories such as dairy, baby food and pasta. 





In 2013 Nestlé Philippines continued to widen its dairy product portfolio with brands specifically geared for adults. Milo R2 was its n ewest brand, which boasts of nutrients that reenergise and refuel consumers even after a long day‟s work. Milo R2 claims to give consumers all the energy that they need to accomplish work-related tasks, whilst giving them enough of a boost to tackle physical activities such as sports. This new brand capitalises on the positioning of Milo as energy-giving. In a bid to compete head-on with the l eading brand Lucky Me, Universal Robina Corp launched its Pancit ni Mang Juan b rand in instant noodles. This new product features flavours of well-loved Filipino dishes such as adobo and sweet and spicy barbecue. Advertising campaigns are used by manufacturers to increase consumers‟ awareness of new brands and strengthen brand positioning. Nestlé Philippines continues to l everage its strong financial muscle to finance high-profile advertising campaigns which feature influential celebrities. The company continues to promote more frequent consumption of milk in the Philippines by informing consumers about their calcium needs. Meanwhile, Alaska Milk Corp eagerly shared new uses for its evaporated/condensed milk, whilst encouraging entrepreneurship amongst consumers. Gardenia Philippines took a step further and visited business hubs to conduct free medical check-ups and consultations in order to strengthen the positioning of Gardenia as a healthy product.

Prospects 







Growth in nutrition/staples will be supported by an increase in the Philippine population and a dynamic economic performance in the forecast period. It should be noted that the consumption of nutrition/staples is dependent on income and population level. The positive trends in these macroeconomic factors are expected to create growth opportunities for nutrition/staples in the forecast period. Nutrition/staples is expected to see a constant value CAGR of 3% in the forecast period. Growth is expected to come from middle- and lo wer-income consumers, who will be able to afford to buy more such products. Amongst lower- and middle-income consumers, the consumption of nutrition/staples remains stable as these are products seen as daily necessities. With levels of income improving, these consumer groups can now afford to buy more of these products. Pasta is expected to be the brightest spot in nutrition/staples, with a projected constant value CAGR of 6%. The demand for pasta will be driven by more frequent consumption amongst Filipino consumers. Aside from being a celebration food, manufacturers will continue to market this product as a daily snack and a convenient baon for children. The availability of smaller packaging in pasta and pasta sauce could help to make consumption more frequent and more affordable for consumers. Despite the overall slowdown in nutrition/staples, manufacturers will be looking at highpotential niches in order to boost sales. Another strategy by manufacturers will be to encourage better consumption from lower-income consumers by the introduction of smaller packaging. Smaller packaging does not only make products more affordable, but enables players to distribute their products in traditional grocery retailers such as sari-sari stores. On the other hand, manufacturers could bank on the health and wellness trend in order to tap into the middle-income consumer group. Fortification of products with vitamins, minerals and fibre, positioning products as healthy alternatives and the introduction of better for you variants are


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26


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all expected to appeal to middle-income consumers who are pursuing healthier and more active lifestyles. 



Pancit ni Mang Juan‟s higher pricing strategy could discourage demand from the massmarket. Although Filipino flavours appeal to the general market, more adventurous consumers are gravitating towards Japanese and Korean flavours, which were very successful recently. Thus, the success of the brand is expected to be limited. The failure of Nestlé Philippines‟s Milo for Adults in the past shows that Filipino adults might not be ready for another flavoured milk drink brand, limiting the performance of Milo R2. The product could appeal to a few consumers, as its positioning as a healthy drink for workers who are also engaged in sport sits well with the increasingly active lifestyles amongst people in urban areas. However, its price is still high compared with other products, such as 3-i n-1 coffee, which is po pular amongst consumers.


Sales of Nutrition/Staples by Category: Volume 2008-2013

'000 tonnes

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

2008

2009

2010

2011

2012

2013

131.0 12.8 336.7 1.1 449.1 53.6 14.5 29.4 164.9 89.3 1,282.2

130.6 13.2 339.4 1.2 467.3 53.3 14.3 31.7 168.7 90.2 1,309.8

132.0 13.6 349.4 1.3 486.5 53.5 14.4 34.6 178.4 91.5 1,355.1

135.6 14.1 356.4 1.3 506.3 53.6 13.6 35.6 189.4 93.4 1,399.3

139.5 14.6 364.3 1.4 525.0 54.0 12.7 37.8 200.1 95.7 1,445.0

144.1 15.2 369.2 1.4 545.0 54.5 12.7 39.7 210.6 98.4 1,490.9


Table 26

Sales of Nutrition/Staples by Category: Value 2008-2013

Ps million


2008

2009

2010

2011

2012

2013

13,272.7 3,072.7 57,325.1 1,431.6 36,987.2 29,564.2 3,628.4 2,140.9 18,488.2 3,910.8 169,821.8

13,908.3 3,237.1 60,485.6 1,535.0 39,536.2 30,459.7 3,667.1 2,408.5 19,299.8 4,047.7 178,585.0

14,649.2 3,393.3 67,077.9 1,800.4 41,952.2 31,648.5 3,727.3 2,805.9 20,567.6 4,169.2 191,791.4

15,566.6 3,585.3 69,553.1 1,937.8 44,996.4 32,287.4 3,671.0 2,946.2 22,061.6 4,398.5 201,003.8

16,618.8 3,810.6 72,080.9 2,054.6 48,032.6 32,988.1 3,598.2 3,285.0 23,602.4 4,662.4 210,733.6

17,774.8 4,056.7 74,054.6 2,160.2 50,854.6 34,276.5 3,714.2 3,547.8 25,190.4 4,920.5 220,550.3



27


Table 27

Passport

Sales of Nutrition/Staples by Category: % Volume Growth 2008-2013

% volume growth


2012/13

2008-13 CAGR

2008/13 Total

3.3 3.8 1.3 2.7 3.8 1.1 0.6 5.0 5.2 2.8 3.2

1.9 3.5 1.9 5.1 3.9 0.4 -2.5 6.2 5.0 2.0 3.1

10.0 18.6 9.7 28.4 21.4 1.9 -12.1 35.1 27.7 10.2 16.3


Table 28

Sales of Nutrition/Staples by Category: % Value Growth 2008-2013



2012/13

2008-13 CAGR

2008/13 Total

7.0 6.5 2.7 5.1 5.9 3.9 3.2 8.0 6.7 5.5 4.7

6.0 5.7 5.3 8.6 6.6 3.0 0.5 10.6 6.4 4.7 5.4

33.9 32.0 29.2 50.9 37.5 15.9 2.4 65.7 36.3 25.8 29.9


Table 29

NBO Company Shares of Nutrition/Staples: % Value 2009-2013

% 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


2009

2010

2011

2012

2013

18.6 7.2 6.7 7.6

18.7 8.0 6.7 7.4

18.7 7.8 6.9 7.2

18.5 7.7 7.1 7.1

18.2 7.6 7.2 7.1

6.2 6.0 4.5

6.3 5.8 4.5

6.5 5.8 4.6

6.7 5.9 4.6

6.8 6.0 4.5

3.7 3.0

3.5 3.0

3.5 3.0

3.5 2.9

3.4 2.9

2.5

2.7

2.7

2.7

2.7

28


Universal Robina Corp Yakult Philippines Inc Gardenia Philippines Inc Supervalue Inc Abbott Laboratories (Phils) Inc UFC Philippines Inc Goldilocks Bake Shop Inc Unilever Foods Philippines (CMC) RFM Corp SM Retail Inc Agana Circle Enterprises Nissin-Universal Robina Corp MLM Foods Inc Quaker Oats Asia Inc Malabon Soap & Oil Industrial Co Inc Poms Venture Corp New Zealand Creamery Inc AD Gothong Mfg Corp AB Food & Beverages Philippines Inc Bongrain SA Royal Friesland Foods NV Artisanal Others Total Source:

Passport

1.9 2.0 1.4 1.4 1.3

1.9 1.9 1.4 1.4 1.3

1.9 1.9 1.6 1.4 1.3

2.1 2.1 1.7 1.5 1.3

2.2 2.1 1.8 1.6 1.3

1.1 0.8 1.0

1.1 0.8 1.0

1.1 0.8 0.8

1.1 0.9 0.7

1.1 0.9 0.7

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 0.6 0.6

0.7 0.7 0.7 0.6

0.6 0.6 0.5

0.6 0.6 0.5

0.6 0.6 0.5

0.6 0.6 0.5

0.6 0.6 0.5

0.3 0.4 0.4 0.4

0.3 0.4 0.3 0.3

0.4 0.4 0.3 0.3

0.4 0.3 0.3 0.3

0.4 0.3 0.3 0.3

0.2 0.6 4.2 12.6 100.0

0.2 0.5 4.1 12.5 100.0

0.2 0.3 4.0 12.5 100.0

0.2 0.1 4.0 12.2 100.0

0.2 4.0 12.2 100.0


Table 30

LBN Brand Shares of Nutrition/Staples: % Value 2010-2013

% retail value rsp Brand Minola Lucky Me Alaska Baguio Bear Brand Milo Lactum Nido Magnolia Payless Yakult Anchor Gardenia Star Kraft SM Bonus Enfalac


Company 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 San Miguel Pure Foods Co Inc Universal Robina Corp Yakult Philippines Inc Fonterra Brands (Phils) Inc Gardenia Philippines Inc San Miguel Pure Foods Co Inc Kraft Foods (Philippines) Inc Supervalue Inc Mead Johnson

2010

2011

2012

2013

6.7 6.3 7.2 5.8 5.6 3.9 3.6

6.9 6.5 7.0 5.8 5.7 3.9 3.5

7.1 6.7 6.7 5.9 5.7 3.8 3.5

7.2 6.8 6.6 6.0 5.6 3.7 3.5

2.4 2.2

2.4 2.3

2.5 2.2

2.5 2.2

1.8 1.9 1.8

1.8 1.9 1.8

2.0 2.1 1.8

2.1 2.1 1.8

1.4 1.6

1.6 1.7

1.7 1.7

1.8 1.7

1.7

1.7

1.7

1.7

1.4 1.4

1.4 1.4

1.5 1.4

1.6 1.4

29


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 Alaska Milk Corp Nestlé Philippines Inc Wyeth Philippines Inc SM Retail Inc

Nestlé Nan UFC Promil Nestogen Goldilocks Anlene Alacta S-26 Carnation Chuckie Bonamil SM Bonus Artisanal Others Total Source:

Passport

1.1 1.1 1.1 1.0 1.0 0.8 0.9

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

0.9

0.9

0.9

0.9

0.8 0.8 0.7 0.7 0.6 4.1 27.8 100.0

0.8 0.8 0.7 0.7 0.6 4.0 27.1 100.0

0.8 0.8 0.7 0.7 0.6 4.0 26.5 100.0

0.8 0.8 0.7 0.7 0.7 4.0 26.3 100.0


Table 31

Forecast Sales of Nutrition/Staples by Category: Volume 2013-2018

'000 tonnes


2013

2014

2015

2016

2017

2018

144.1 15.2 369.2 1.4 545.0 54.5 12.7 39.7 210.6 98.4 1,490.9

147.4 15.8 375.4 1.4 564.4 55.5 13.0 41.7 220.6 101.6 1,536.9

149.9 16.4 381.7 1.5 583.1 56.7 13.2 44.0 230.1 105.2 1,581.9

152.5 17.1 388.2 1.6 601.4 58.0 13.5 46.3 239.5 109.0 1,627.0

155.2 17.8 394.6 1.6 620.3 59.2 13.9 48.7 249.0 112.9 1,673.2

158.2 18.6 400.8 1.7 639.2 60.5 14.2 51.1 258.7 117.0 1,720.0


Table 32

Forecast Sales of Nutrition/Staples by Category: Value 2013-2018

Ps million

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


2013

2014

2015

2016

2017

2018

17,774.8 4,056.7 74,054.6 2,160.2 50,854.6 34,276.5 3,714.2 3,547.8 25,190.4 4,920.5 220,550.3

18,349.1 4,185.5 74,964.4 2,229.6 52,116.3 35,069.8 3,711.1 3,750.0 26,086.3 5,073.0 225,535.1

18,827.7 4,320.9 76,218.0 2,321.2 53,395.8 36,023.6 3,718.2 3,967.5 26,985.0 5,235.4 231,013.3

19,347.8 4,475.2 77,754.6 2,433.6 54,718.0 37,023.7 3,743.5 4,189.7 27,852.3 5,413.4 236,951.8

19,910.8 4,651.8 79,426.0 2,569.5 56,167.2 37,992.6 3,777.4 4,424.3 28,722.4 5,592.0 243,234.1

20,528.9 4,843.6 81,257.7 2,718.7 57,716.8 38,942.1 3,819.4 4,672.1 29,573.8 5,787.7 249,860.9

30


Source:

Passport


Table 33

Forecast Sales of Nutrition/Staples by Category: % Volume Growth 20132018

% volume growth


2017/18

2013-18 CAGR

2013/18 Total

1.9 4.3 1.6 4.9 3.0 2.1 2.5 5.1 3.9 3.7 2.8

1.9 4.1 1.7 4.1 3.2 2.1 2.2 5.2 4.2 3.5 2.9

9.7 22.4 8.6 22.1 17.3 10.9 11.6 29.0 22.8 19.0 15.4


Table 34

Forecast Sales of Nutrition/Staples by Category: % Value Growth 2013-2018

% constant value growth 2013-18 CAGR

2013/18 TOTAL

2.9 3.6 1.9 4.7 2.6 2.6 0.6 5.7 3.3 3.3 2.5

15.5 19.4 9.7 25.9 13.5 13.6 2.8 31.7 17.4 17.6 13.3



MARKET DATA Table 35

Sales of Packaged Food by Category: Volume 2008-2013

'000 tonnes

Baby Food Bakery Canned/Preserved Food Chilled Processed Food Confectionery


2008

2009

2010

2011

2012

2013

53.6 331.7 212.9 80.0 87.0

53.3 336.7 223.0 82.8 88.0

53.5 344.9 234.5 86.5 89.3

53.6 355.8 245.6 89.8 87.7

54.0 367.6 256.6 92.9 87.3

54.5 380.5 267.4 96.0 88.6

31


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:

Passport

336.7 285.1 99.1 42.1 1.1 164.9 449.1 29.4 11.2 178.9

339.4 292.1 102.1 42.8 1.2 168.7 467.3 31.7 11.6 187.7

349.4 306.1 105.7 43.9 1.3 178.4 486.5 34.6 12.0 195.8

356.4 319.9 111.9 45.8 1.3 189.4 506.3 35.6 12.6 203.7

364.3 335.2 116.1 47.9 1.4 200.1 525.0 37.8 13.1 210.7

369.2 350.3 119.9 48.8 1.4 210.6 545.0 39.7 13.8 217.3

0.0 3.8 14.5 116.6 433.6

0.0 3.9 14.3 121.2 444.9

0.0 4.0 14.4 126.0 458.4

0.0 4.2 13.6 131.2 470.8

0.0 4.3 12.7 136.5 485.2

0.0 4.5 12.7 141.9 500.5

1,282.2 586.2 2,288.4

1,309.8 611.5 2,352.0

1,355.1 639.0 2,437.7

1,399.3 668.1 2,522.8

1,445.0 694.2 2,608.3

1,490.9 719.2 2,693.7

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

Table 36

Sales of Packaged Food by Category: Value 2008-2013

Ps million

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:

2008

2009

2010

2011

2012

2013

29,564.2 49,132.0 25,078.2 13,785.4 28,018.1 57,325.1 25,169.5 22,943.7 7,889.8 1,431.6 18,488.2 36,987.2 2,140.9 2,438.2 19,062.9

30,459.7 51,579.1 26,874.1 14,336.8 28,808.9 60,485.6 26,410.9 24,450.9 8,176.7 1,535.0 19,299.8 39,536.2 2,408.5 2,570.0 20,158.6

31,648.5 54,358.1 28,807.3 15,053.6 29,676.7 67,077.9 28,241.2 25,920.4 8,547.8 1,800.4 20,567.6 41,952.2 2,805.9 2,752.9 21,239.5

32,287.4 57,674.6 30,976.9 15,881.6 29,725.4 69,553.1 30,149.6 28,148.2 8,914.2 1,937.8 22,061.6 44,996.4 2,946.2 2,960.6 22,425.2

32,988.1 61,471.2 33,251.3 16,834.5 30,054.4 72,080.9 32,339.2 30,208.5 9,414.2 2,054.6 23,602.4 48,032.6 3,285.0 3,204.4 23,702.5

34,276.5 65,427.6 35,483.7 17,853.1 30,896.5 74,054.6 34,494.4 32,005.3 9,830.2 2,160.2 25,190.4 50,854.6 3,547.8 3,440.9 25,001.7

14.8 1,123.0 3,628.4 29,601.8 98,311.1

12.6 1,220.3 3,667.1 31,896.2 103,328.2

12.2 1,317.1 3,727.3 33,340.0 107,892.4

6.6 1,423.7 3,671.0 35,394.4 112,563.1

0.9 1,540.4 3,598.2 37,682.2 118,193.6

0.9 1,635.5 3,714.2 40,149.2 124,472.9

169,821.8 84,548.4 349,644.9

178,585.0 89,733.1 368,402.0

191,791.4 95,219.4 391,418.4

201,003.8 101,951.8 411,760.2

210,733.6 108,884.0 433,733.2

220,550.3 115,569.8 456,224.4



32


Table 37

Passport

Sales of Packaged Food by Category: % Volume Growth 2008-2013

% volume growth


Table 38

2012/13

2008-13 CAGR

2008/13 Total

1.1 3.5 4.2 3.3 1.5 1.3 4.5 3.3 2.0 2.7 5.2 3.8 5.0 4.6 3.1 3.9 3.5 0.6 3.9 3.1 3.2 3.6 3.3

0.4 2.8 4.7 3.7 0.4 1.9 4.2 3.9 3.0 5.1 5.0 3.9 6.2 4.2 4.0 -47.8 3.3 -2.5 4.0 2.9 3.1 4.2 3.3

1.9 14.7 25.6 20.0 1.8 9.7 22.9 21.0 16.1 28.4 27.7 21.4 35.1 22.7 21.5 -96.1 17.4 -12.1 21.7 15.4 16.3 22.7 17.7


Sales of Packaged Food by Category: % Value Growth 2008-2013


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


2012/13

2008-13 CAGR

2008/13 Total

3.9 6.4 6.7 6.1 2.8 2.7 6.7 5.9 4.4 5.1 6.7 5.9 8.0 7.4 5.5 -0.7 6.2 3.2

3.0 5.9 7.2 5.3 2.0 5.3 6.5 6.9 4.5 8.6 6.4 6.6 10.6 7.1 5.6 -43.3 7.8 0.5

15.9 33.2 41.5 29.5 10.3 29.2 37.0 39.5 24.6 50.9 36.3 37.5 65.7 41.1 31.2 -94.1 45.6 2.4

33


Passport

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

35.6 26.6 29.9 36.7 30.5

GBO Company Shares of Packaged Food: % Value 2009-2013

% retail value rsp Company Nestlé SA San Miguel Corp JG Summit Holdings Inc Monde Nissin Corp San Pablo Mfg Corp Mead Johnson Nutrition Co Royal FrieslandCampina NV International Oil Factory Unilever Group CDO Foodsphere Inc Century Canning Corp Kraft Foods Group, Inc Republic Biscuit Corp Fonterra Co-operative Group Liwayway Marketing Corp Nutri-Asia Inc Yakult Honsha Co Ltd Mondelez International Inc Del Monte Pacific Ltd Ajinomoto Co Inc Pacific Meat Co Inc QAF Ltd RFM Corp Food Industries Inc Goldilocks Bake Shop Inc Tobi Marketing Inc Liberty Gold Fruit Co Inc Abbott Laboratories Inc Mars Inc Columbia International Food Products Inc Artisanal Private Label Others Total

Table 40

6.3 4.8 5.4 6.5 5.5


Table 39

Source:

6.5 5.3 4.7 6.1 5.2

2009

2010

2011

2012

2013

10.5 7.4 6.7 4.8 3.2 3.7 0.3 2.9 2.8 1.5 1.7 1.7 1.2

10.6 7.2 6.7 4.9 3.3 3.6 0.3 2.8 2.8 1.6 1.7 1.7 1.3

10.4 7.4 6.8 5.0 3.3 3.5 0.1 2.8 2.8 1.7 1.7 1.7 1.3

11.9 7.5 7.0 5.2 3.4 3.4 3.4 2.9 2.8 1.8 1.7 1.7 1.7 1.3

11.7 7.5 7.1 5.3 3.5 3.4 3.3 2.9 2.8 1.8 1.8 1.7 1.7 1.3

1.2 1.0 0.9 -

1.2 1.0 0.9 -

1.2 1.0 0.9 -

1.2 1.0 1.0 1.0

1.2 1.0 1.0 1.0

0.9 1.1 0.9 0.7 0.7 0.8 0.7 0.7 0.6 0.6 0.7 0.6

0.9 1.0 0.9 0.7 0.7 0.7 0.7 0.7 0.6 0.6 0.7 0.6

0.9 1.0 0.9 0.8 0.8 0.7 0.7 0.7 0.6 0.6 0.7 0.6

1.0 1.0 0.9 0.8 0.8 0.7 0.7 0.7 0.6 0.6 0.6 0.6

1.0 1.0 0.9 0.9 0.8 0.8 0.7 0.7 0.6 0.6 0.6 0.6

4.0 1.7 34.0 100.0

3.8 1.8 33.9 100.0

3.8 1.8 33.6 100.0

3.7 1.9 25.4 100.0

3.6 1.9 25.3 100.0


NBO Company Shares of Packaged Food: % Value 2009-2013


34


% 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 Kraft Foods (Philippines) Inc Century Canning Corp Unilever Foods Philippines (CMC) Wyeth Philippines Inc Fonterra Brands (Phils) Inc Liwayway Marketing Corp Del Monte Philippines Inc Unilever RFM Ice Cream Inc Yakult Philippines Inc Ajinomoto Philippines Corp Mondelez Philippines Inc SM Retail Inc Pacific Meat Co Inc Gardenia Philippines Inc RFM Corp UFC Philippines Inc Food Industries Inc Supervalue Inc Goldilocks Bake Shop Inc Tobi Marketing Inc Artisanal Others Total Source:

Passport

2009

2010

2011

2012

2013

10.3 6.7 4.8 5.0

10.3 6.7 4.9 4.8

10.2 6.8 5.0 5.0

10.0 7.0 5.2 5.1

9.8 7.1 5.3 5.2

3.5 3.2 3.7

3.9 3.3 3.6

3.8 3.3 3.5

3.7 3.4 3.4

3.7 3.5 3.4

2.9 2.4

2.8 2.4

2.8 2.4

2.9 2.4

2.9 2.4

1.5 2.3

1.6 2.9

1.7 2.8

1.8 2.8

1.8 1.8

1.7 1.7

1.7 1.7

1.7 1.7

1.7 1.7

1.8 1.7

1.8 1.2

1.7 1.3

1.7 1.3

1.7 1.3

1.7 1.3

1.2 1.0 1.0

1.2 1.0 1.0

1.2 1.0 1.0

1.2 1.0 1.1

1.2 1.1 1.1

0.9 1.1

0.9 1.0

0.9 1.0

1.0 1.0

1.0 1.0

0.8 0.9 0.7 0.7 0.8 0.8 0.7 0.7 0.7 4.0 31.7 100.0

0.9 0.9 0.7 0.7 0.7 0.7 0.7 0.7 0.7 3.8 30.6 100.0

0.9 0.9 0.8 0.8 0.8 0.7 0.7 0.7 0.7 3.8 30.3 100.0

0.9 0.9 0.8 0.8 0.8 0.7 0.7 0.7 0.7 3.7 29.9 100.0

0.9 0.9 0.9 0.9 0.8 0.8 0.8 0.8 0.7 0.7 3.6 29.7 100.0


Table 41

LBN Brand Shares of Packaged Food: % Value 2010-2013

% retail value rsp Brand Purefoods Jack 'n' Jill Minola Lucky Me Alaska Baguio


Company Purefoods-Hormel Co Inc, The Universal Robina Corp San Pablo Mfg Corp Monde Nissin Corp Alaska Milk Corp International Oil Factory

2010

2011

2012

2013

4.8

4.9

5.0

5.1

4.8 3.3 3.1 3.5 2.8

4.9 3.3 3.2 3.4 2.8

5.0 3.4 3.2 3.2 2.9

5.1 3.5 3.3 3.2 2.9

35


Bear Brand CDO Milo Lactum

Nestlé Philippines Inc CDO Foodsphere Inc Nestlé Philippines Inc Mead Johnson Philippines Inc San Miguel Pure Foods Co Inc Nestlé Philippines Inc Kraft Foods (Philippines) Inc Monde Nissin Corp Universal Robina Corp Liwayway Marketing Corp Yakult Philippines Inc Nestlé Philippines Inc Century Canning Corp Unilever RFM Ice Cream Inc SM Retail Inc Del Monte Philippines Inc Ajinomoto Philippines Corp Pacific Meat Co Inc Fonterra Brands (Phils) Inc Gardenia Philippines Inc San Miguel Pure Foods Co Inc Century Canning Corp Food Industries Inc Supervalue Inc

Magnolia Nido Kraft Sky Flakes Payless Oishi Yakult Nestlé 555 Selecta SM Bonus Del Monte Ajinomoto Argentina Anchor Gardenia Star Century Nagaraya SM Bonus Artisanal Others Total Source:

Passport

2.7 1.6 1.9 1.8

2.8 1.7 1.9 1.7

2.8 1.8 1.9 1.7

2.7 1.8 1.8 1.7

1.3

1.3

1.3

1.3

1.2 1.1

1.2 1.1

1.2 1.0

1.2 1.0

0.9 0.9 0.9 0.9 1.0 0.9 0.9 0.9 0.9 1.0 0.9 0.9

1.0 0.9 1.0 0.9 1.0 0.9 0.9 0.9 0.9 0.9 0.9 0.9

1.0 1.0 1.0 1.0 1.0 0.9 0.9 0.9 0.9 0.9 0.9 0.9

1.0 1.0 1.0 1.0 1.0 1.0 0.9 0.9 0.9 0.9 0.9 0.9

0.7 0.8

0.8 0.8

0.8 0.8

0.9 0.8

0.8 0.7 0.7 3.8 47.8 100.0

0.8 0.7 0.7 3.8 47.2 100.0

0.8 0.7 0.7 3.7 46.6 100.0

0.8 0.8 0.8 3.6 46.4 100.0


Table 42

Penetration of Private Label by Category: % Value 2008-2013

% 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:

2008

2009

2010

2011

2012

2013

0.4 2.0 5.0 7.7 2.6 0.4 2.2 5.9 1.7 0.7

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 6.7 1.9 0.8


Table 43

Distribution of Packaged Food by Format: % Value 2008-2013

% retail value rsp


36


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 Source:

Passport

2008

2009

2010

2011

2012

2013

99.8 95.4 48.6

99.9 95.4 49.1

99.8 95.5 49.5

99.8 95.6 49.9

99.8 95.7 50.3

99.8 95.7 50.6

1.3 0.2 4.6 42.6 46.8

1.3 0.1 4.9 42.8 46.3

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 42.8 45.1

4.2

4.2

4.1

4.1

4.1

4.1

12.7

11.8

11.1

10.6

10.3

10.0

29.9

30.4

30.8

31.1

31.0

30.9

4.4 4.4

4.4 4.4

4.4 4.3

4.2 4.2

4.1 4.1

4.1 4.1

0.0 0.0

0.0 0.0

0.0 0.0

0.0 0.0

0.0 0.0

0.0 0.1

0.2 0.0 0.0 0.1 100.0

0.1 0.0 0.0 0.1 100.0

0.2 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


Table 44

Distribution of Packaged Food by Format and Category: % Value 2013

% 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


BF

B

CPF

CHP

C

D

100.0 57.8 47.2 1.1 0.0 0.0 6.0 40.0 10.6

100.0 98.5 30.7 0.4 0.0 0.2 3.9 26.3 67.8

100.0 100.0 61.0 1.3 0.0 0.3 7.2 52.1 39.0

100.0 100.0 58.7 1.6 0.0 0.0 7.1 50.0 41.3

99.8 93.9 45.5 4.2 0.0 0.6 5.7 34.9 48.4

99.7 99.7 53.3 1.8 0.0 0.1 6.5 44.9 46.4

0.0

26.5

0.0

0.0

4.1

0.0

10.6 0.0 42.3 42.3

5.0 36.3 1.5 1.5

15.9 23.1 0.0 0.0

5.8 35.5 0.0 0.0

8.1 36.2 5.9 5.9

10.9 35.5 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

37


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

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


Passport

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 52.7 2.4 0.0 0.2 6.5 43.7 47.3

99.9 99.9 74.1 1.1 0.0 0.0 9.5 63.5 25.8

100.0 100.0 80.9 2.1 0.0 0.4 10.5 67.9 19.1

76.2 36.7 22.4 0.0 0.0 0.0 2.8 19.6 14.4

100.0 100.0 46.9 2.2 0.0 0.2 5.8 38.7 53.1

100.0 99.5 58.2 0.1 0.0 0.0 7.1 51.0 41.3

0.0

0.0

0.1

0.0

0.0

0.0

12.3 35.0 0.0 0.0

12.0 13.8 0.0 0.0

15.3 3.8 0.0 0.0

14.4 0.0 39.5 39.5

10.5 42.6 0.0 0.0

6.8 34.5 0.5 0.0

0.0 0.0

0.0 0.0

0.0 0.0

0.0 0.0

0.0 0.0

0.0 0.5

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

23.8 0.0 0.0 0.0 23.8 100.0

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 58.5 2.4 0.0 0.0 6.9 49.2 41.5

100.0 100.0 80.0 5.3 0.0 2.7 8.5 63.5 20.0

100.0 100.0 45.5 1.1 0.0 0.2 5.4 38.8 54.5

100.0 95.4 95.4 3.1 0.0 1.2 11.7 79.4 0.0

100.0 100.0 66.7 5.9 0.0 2.0 7.3 51.5 33.3

100.0 100.0 59.9 1.1 0.0 0.9 7.3 50.6 40.1

0.0

0.0

0.0

0.0

0.0

0.0

14.0 27.5 0.0 0.0

15.0 5.0 0.0 0.0

5.6 48.9 0.0 0.0

0.0 0.0 4.6 0.5

15.4 17.9 0.0 0.0

16.3 23.8 0.0 0.0

0.0 0.0

0.0 0.0

0.0 0.0

0.0 4.1

0.0 0.0

0.0 0.0

0.0 0.0 0.0

0.0 0.0 0.0

0.0 0.0 0.0

0.0 0.0 0.0

0.0 0.0 0.0

0.0 0.0 0.0

38


Internet Retailing Direct Selling Total

Passport

0.0 0.0 100.0

0.0 0.0 100.0

0.0 0.0 100.0

0.0 0.0 100.0

0.0 0.0 100.0

0.0 0.0 100.0

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

100.0 98.7 38.2 1.5 0.0 0.2 4.9 31.6 60.5 0.0 15.3 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 2013-2018

'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


2013

2014

2015

2016

2017

2018

54.5 380.5 267.4 96.0 88.6 369.2 350.3 119.9 48.8 1.4 210.6 545.0 39.7 13.8 217.3

55.5 392.5 277.7 99.0 90.3 375.4 365.7 123.2 49.8 1.4 220.6 564.4 41.7 14.4 222.9

56.7 404.0 287.1 101.9 92.2 381.7 381.0 126.0 50.8 1.5 230.1 583.1 44.0 15.2 227.8

58.0 416.2 296.8 105.0 94.4 388.2 396.5 129.0 51.9 1.6 239.5 601.4 46.3 15.9 232.9

59.2 429.2 307.4 108.2 96.7 394.6 412.3 132.2 53.2 1.6 249.0 620.3 48.7 16.8 238.1

60.5 442.9 318.4 111.6 99.3 400.8 428.7 135.5 54.7 1.7 258.7 639.2 51.1 17.6 243.2

39


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

Passport

0.0 4.5 12.7 141.9 500.5

0.0 4.6 13.0 146.9 516.3

0.0 4.8 13.2 151.7 532.4

0.0 5.0 13.5 157.1 549.9

0.0 5.2 13.9 162.8 568.9

0.0 5.4 14.2 169.0 589.1

1,490.9 719.2 2,693.7

1,536.9 742.3 2,778.0

1,581.9 763.2 2,859.0

1,627.0 785.0 2,942.5

1,673.2 808.2 3,030.0

1,720.0 832.2 3,120.0

Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources Sum of sectors 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 2013-2018

Ps million


2013

2014

2015

2016

2017

2018

34,276.5 65,427.6 35,483.7 17,853.1 30,896.5 74,054.6 34,494.4 32,005.3 9,830.2 2,160.2 25,190.4 50,854.6 3,547.8 3,440.9 25,001.7

35,069.8 67,423.2 36,691.9 18,370.9 31,040.5 74,964.4 35,766.5 32,866.1 10,075.8 2,229.6 26,086.3 52,116.3 3,750.0 3,598.3 25,486.9

36,023.6 69,347.1 37,778.1 18,848.5 31,319.8 76,218.0 37,064.7 33,622.9 10,312.2 2,321.2 26,985.0 53,395.8 3,967.5 3,763.6 25,902.4

37,023.7 71,445.1 38,914.6 19,357.4 31,698.9 77,754.6 38,350.7 34,464.9 10,597.3 2,433.6 27,852.3 54,718.0 4,189.7 3,946.4 26,331.0

37,992.6 73,734.0 40,139.6 19,899.4 32,162.9 79,426.0 39,655.5 35,362.4 10,922.2 2,569.5 28,722.4 56,167.2 4,424.3 4,147.4 26,767.0

38,942.1 76,181.8 41,434.5 20,456.6 32,691.1 81,257.7 40,971.8 36,316.2 11,278.4 2,718.7 29,573.8 57,716.8 4,672.1 4,361.0 27,204.6

0.9 1,635.5 3,714.2 40,149.2 124,472.9

0.8 1,692.8 3,711.1 41,471.1 127,476.8

0.8 1,747.4 3,718.2 42,677.4 130,508.6

0.8 1,800.7 3,743.5 44,043.8 133,962.9

0.8 1,860.0 3,777.4 45,549.0 137,806.3

0.8 1,920.6 3,819.4 47,128.8 141,908.3

220,550.3 115,569.8 456,224.4

225,535.1 118,859.6 467,307.6

231,013.3 121,819.0 478,574.4

236,951.8 124,974.7 490,902.7

243,234.1 128,339.2 504,150.9

249,860.9 131,861.1 518,145.7


Table 47

Forecast Sales of Packaged Food by Category: % Volume Growth 2013-2018

% volume growth

Baby Food Bakery Canned/Preserved Food


2017/18

2013-18 CAGR

2013/18 Total

2.1 3.2 3.6

2.1 3.1 3.5

10.9 16.4 19.1

40


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:

Table 48

Passport

3.1 2.6 1.6 4.0 2.5 2.7 4.9 3.9 3.0 5.1 5.2 2.2 5.0 3.8 2.5 3.8 3.6 2.8 3.0 3.0

3.1 2.3 1.7 4.1 2.5 2.3 4.1 4.2 3.2 5.2 5.1 2.3 4.7 3.8 2.2 3.6 3.3 2.9 3.0 3.0

16.3 12.1 8.6 22.4 13.1 12.0 22.1 22.8 17.3 29.0 28.1 12.0 25.9 20.6 11.6 19.1 17.7 15.4 15.7 15.8


Forecast Sales of Packaged Food by Category: % Value Growth 2013-2018

% constant value growth


2013-18 CAGR

2013/18 TOTAL

2.6 3.1 3.1 2.8 1.1 1.9 3.5 2.6 2.8 4.7 3.3 2.6 5.7 4.9 1.7 -2.4 3.3 0.6 3.3 2.7 2.5 2.7 2.6

13.6 16.4 16.8 14.6 5.8 9.7 18.8 13.5 14.7 25.9 17.4 13.5 31.7 26.7 8.8 -11.2 17.4 2.8 17.4 14.0 13.3 14.1 13.6



41

Packaged Food in the Philippines

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