PETpla.net Insider 06 / 2012

BOTTLING / FILLING 34 PET planet insider Vol. 13 No. 06/12 www.petpla.net Rabobank’s Global Beverage Outlook 2012 sees volatility, divergence and convergence in a market inf uenced by f ve megatrends* Global beverage markets Rabobank International, the Dutch financial ser- vices company specialis- ing in food, agribusiness and related activities, sees the global beverage market in 2012 and beyond as far from unified. It identifies five ‘megatrends’ that will influ- ence the market in 2012 and beyond – and the common element is change. Differ- ent markets are behaving in different ways, and within regions, the mature areas of Europe and North America in particular, individual sec- tors are seeing erosion of the middle ground. Rabobank headlined its report ‘The Best of Times, the Worst of Times’, the opening lines of Charles Dickens’‘A Tale of Two Cities’, which was set in a period of turmoil, when old certainties were overturned and settled social structures were trans- formed. The company believes that the worst of the economic storm has passed although – as it points out – there are opposing forces, includ- ing consumer trends and commod- ity costs, that illustrate the conflicts facing the industry. The megatrends that Rabobank identifies are: volatility and rising commodity costs; emerging market growth; divergence – or ‘bifur- cation’, as the company describes it; strategic sourcing; and convergence across segments. Five megatrends Volatility and commodity cost rises are on an unprecedented scale, leading to swings in prices of ‘soft’ commodities, including sugar, coffee and citrus. Growth in emerging market growth is led by spreading consum- erism in BRIC (Brazil, Russia, India and China) markets. Bifurcation is the divergence of consumer demand; beverage consumers are drawn either by low prices and affordable quality, or by more expensive, premium brand positioning. Strategic sourcing reflects the need to establish and maintain more cost-effective global supply chains. Convergence cross segments sees soft drinks players moving into dairy; beer distributors acquiring wine and spirits businesses; and brewer- ies buying soft drinks brands. It brings economies of scale across supply chains. Effects Not all segments experience the impact of these trends in the same way. CSD companies are less vulner- able to raw material price volatility than fruit juice producers; bifurcation is most apparent and influential in wine, although it is also apparent in beers. Convergence has just begun in the USA, while it is well-established in China, although American players are involved. The five megatrends have been evident across the global food and beverage industry for several years but their impact is modified in the wake and context of the global eco- nomic crisis and subsequent recovery. The rapidly-growing disparity between the ‘established’ economies and the fast-growing emerging markets ampli- fies their effect. Across the board, vol- atility will continue to be a risk factor. In the wine industry, for example, with fluctuating grape supplies and curren- cies, mitigating volatility across the supply chain will continue to be a key challenge. sensitive BEVERAGES