New Market Research Report: Zimbabwe Food & Drink Report 2014

From: Fast Market Research, Inc.
Published: Tue Jan 21 2014

We believe private consumption will be an important engine of growth in the years ahead. Although the relative stasis of the manufacturing industry has constrained job creation, consumption in Zimbabwe has continued to be supported by massive remittance inflows from a large diaspora population, and this is unlikely to change. Consumption will therefore be supported even in the absence of an improvement in domestic productivity.

Private consumption will be one of the more resilient components of GDP, supported by large remittance inflows from the many Zimbabweans living abroad. Furthermore, one of the upsides of the tight liquidity conditions is that inflation will remain low - price growth came in at 0.9% in September 2013 and we are forecasting that it will remain below 4.0% in 2014. These low levels of inflation will boost consumers' purchasing power. Any attempt to prematurely reintroduce a domestic currency would pose the biggest risk to private consumption growth.

Full Report Details at

Key Industry Trends

Nestle Zimbabwe Expansion: The world's largest producer of dairy goods, Nestle, announced plans in November 2013 to dramatically expand its production facilities in Zimbabwe. This follows French company Danone's announcement in October that it was to purchase a 49% stake in West Africa's largest maker of frozen dairy products, Fan Milk International.

BMI holds the view that favourable demographic trends and rising incomes will lead to ballooning dairy consumption in Sub-Saharan Africa (SSA). Although emerging Asia remains the world's largest growth region in terms of volume sales of dairy consumption, multinational dairy companies are facing an increasingly difficult time in China, the region's largest market. Earlier this year, Chinese authorities boosted domestic dairy firms with multi-million dollar subsidies, and such activity goes some way to explain a hurried turn to Africa.

Retail Attracting Interest In Zimbabwe: We estimate formal food retail stores to account for about 25% of sales in Zimbabwe. To provide some context, this compares with about 5% in Kenya, which is considered to be among the region's most developed organised retail markets after South Africa, Botswana and Namibia. Mass grocery retailers such as South Africa's Pick n Pay are believed to be keen to increase their exposure to Zimbabwe. Given that Pick n Pay increased its stake in domestic retailer Meikles-owned TM to 49% during 2012, the retailer is now better positioned to expand in the country. In summer 2012 Pick n Pay opened its first store in Harare, Zimbabwe, after acquiring the stake in TM. The outlet includes a supermarket, a liquor store and a clothing store as part of the refurbished Kamfinsa shopping centre, and will devote at least 40% of its floor space to fresh produce and deli goods. Pick n Pay has said that the rebranding exercise of TM stores will take at least three years to complete.

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