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Serbia Food and Drink Report Q3 2011

Serbia Food and Drink Report Q3 2011

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Price $530.00
Meta Description While large foreign retailers and manufacturers from further afield in Europe have been expressing interest in the Serbian
Publisher Business Monitor International
Date of Report Oct 6, 2011
Quick Overview
While large foreign retailers and manufacturers from further afield in Europe have been expressing interest in the Serbian market, high inflation rates and the weak dinar is hampering growth in food and drink, MGR values and company performance in the short term, with recovery dependent on wider economic conditions and an improvement in consumer confidence. Although the fundamental drivers of Serbia's economic recovery remain firmly in place with buoyant exports continuing to underpin growth in 2011, we caution that private consumption will likely remain the weak link in the country's economic recovery for the bulk of the year, as high inflation and a weak labour market undermines consumer spending.
Headline Industry Data (local currency)
?? 2011 per capita food consumption: +2.56%; forecast to 2015: +8.57%
?? 2011 alcoholic drinks sales: +2.29%; forecast to 2015: +7.44%
?? 2011 soft drinks sales: +2.74%; forecast to 2015: +9.77%
?? 2011 mass grocery retail sales: +4.1%; forecast to 2015: +19.35%
Key Company Trends
Delhaize Moves into Serbia – Belgian MGR Delhaize is to buy Delta Maxi for EUR932.5mn. The acquisition sees Delhaize take control of around 450 stores in Serbia, Bulgaria, Bosnia and Herzegovina, Montenegro and Albania. The retailer has said that its operations in south-eastern Europe are expected to generate revenues totalling approximately EUR3.4bn in 2011. MGR penetration across the Balkans remains relatively weak, with strong multinational investment not as widespread as in Central Europe. Acquiring a major retailer such as Delta gives Delhaize pan-regional exposure, which will be particularly useful given that most of the region's markets remain relatively small.
Investment in Organic Foods – In early 2011, the Serbian agricultural ministry started a campaign aimed at promoting high quality food production and encouraging manufacturers to join the programme. The minister in charge stressed that there is the potential for some 600,000 hectares of land in Serbia to be used for organic foods, with emphasis being laid on organic production as the food of the future.
Key Risks to Outlook
Inflation as the Main Risk – Inflation remains a core risk to Serbia's economic growth profile. Inflation continues to shoot higher, with the consumer price index (CPI) registering a rise of 14.1% year-on-year (y-o-y) in March 2011, up from the 12.6% gain seen in February, and is showing few signs of easing. We therefore see inflation continuing to be a concern in Serbia, and currently expect it to average 12.8% over the course of 2011 as international commodity prices remain elevated and planned regulated price hikes are introduced.
Table of Contents
BMI Industry View ........................................................................................................................................... 7
SWOT Analysis ................................................................................................................................................ 9
Serbia Food Industry SWOT ................................................................................................................................................................................. 9
Serbia Drink Industry SWOT .............................................................................................................................................................................. 10
Serbia Mass Grocery Retail Industry SWOT ....................................................................................................................................................... 11
Business Environment ................................................................................................................................. 12
BMI’s Core Global Industry Views .......................................................................................................................................................................... 12
Table: BMI Food & Drink Core Views ............................................................................................................................................................... 18
CEE Business Environment Regional Overview ...................................................................................................................................................... 19
Table Central And Eastern Europe Food & Drink Risk/Reward Ratings Q311 ................................................................................................... 22
Serbia’s Food And Drink Business Environment Rating .......................................................................................................................................... 23
Macroeconomic Outlook .......................................................................................................................................................................................... 24
Table: Serbia -- Economic Activity ..................................................................................................................................................................... 27
Industry Forecast Scenario ........................................................................................................................... 28
Serbia’s Consumer Outlook ..................................................................................................................................................................................... 28
Food......................................................................................................................................................................................................................... 30
Food Consumption .............................................................................................................................................................................................. 30
Table: Serbia Food Consumption Indicators – Historical Data And Forecasts ................................................................................................... 31
Confectionery...................................................................................................................................................................................................... 31
Table: Value Sales Of Serbia's Confectionery Sector – Historical Data And Forecasts ...................................................................................... 32
Canned Food ...................................................................................................................................................................................................... 33
Table: Value/Volume Sales of Serbia's Canned Food Sector – Historical Data And Forecasts ........................................................................... 33
Trade .................................................................................................................................................................................................................. 34
Table: Serbia Sectoral Trade Indicators - Export, Import and Balance Value - Historical Data and Forecasts ................................................. 34
Drink ........................................................................................................................................................................................................................ 35
Alcoholic Drinks ................................................................................................................................................................................................. 35
Table: Serbia Alcoholic Drinks Sector – Value/Volume Sales – Historical Data And Forecasts ......................................................................... 36
Soft Drinks .......................................................................................................................................................................................................... 36
Table: Serbia Soft Drinks Sector – Value/Volume Sales – Historical Data And Forecasts .................................................................................. 37
Hot Drinks .......................................................................................................................................................................................................... 38
Table: Serbia Hot Drinks Sector – Value Sales – Historical Data And Forecasts ............................................................................................... 38
Mass Grocery Retail ................................................................................................................................................................................................ 39
Table: Serbia – Sales Breakdown by Retail Format Type (As % Of Total) .......................................................................................................... 41
Food ................................................................................................................................................................ 42
Key Industry Trends and Developments ................................................................................................................................................................... 42
Some Room for Investment Growth ..................................................................................................................................................................... 42
Serbia Pushes Organic Food Development ........................................................................................................................................................ 44
Serbian Confectionery Market to Struggle in 2011 ............................................................................................................................................. 44
Market Overview ..................................................................................................................................................................................................... 45
Food Consumption .............................................................................................................................................................................................. 45
Food Production ................................................................................................................................................................................................. 45
Leading Players .................................................................................................................................................................................................. 46
Confectionery...................................................................................................................................................................................................... 48
Canned Food ...................................................................................................................................................................................................... 49
Trade .................................................................................................................................................................................................................. 49
Agriculture .......................................................................................................................................................................................................... 50
Dairy Production ................................................................................................................................................................................................ 51
Sugar Production ................................................................................................................................................................................................ 51
Organic Agriculture ............................................................................................................................................................................................ 52
Drink ............................................................................................................................................................... 54
Key Industry Trends and Developments ................................................................................................................................................................... 54
Beer Industry Aiming to Attract Investment ........................................................................................................................................................ 54
Beverage Producers to Use Serbia As a Base for Exports .................................................................................................................................. 54
Market Overview ..................................................................................................................................................................................................... 55
Alcoholic Drinks ................................................................................................................................................................................................. 55
Beer .................................................................................................................................................................................................................... 55
Spirits.................................................................................................................................................................................................................. 57
Wine .................................................................................................................................................................................................................... 57
Soft Drinks .......................................................................................................................................................................................................... 58
Hot Drinks .......................................................................................................................................................................................................... 60
Mass Grocery Retail ...................................................................................................................................... 62
Key Industry Trends and Developments ................................................................................................................................................................... 62
Serbia as New Expansion Frontier… .................................................................................................................................................................. 62
…While Local Companies Looking to Expand Regionally .................................................................................................................................. 64
Hypermarkets and Private Label on the Rise in Serbia ....................................................................................................................................... 64
Market Overview ..................................................................................................................................................................................................... 65
Leading Players .................................................................................................................................................................................................. 66
Table: Mercator – Private Label As % Of Product Sales In Foreign Markets ..................................................................................................... 68
Table: Structure Of Serbia's Mass Grocery Retail Market By Estimated Number Of Outlets, 2002-2010 ........................................................... 69
Table Structure Of Serbia's Mass Grocery Retail Market – Sales Value By Retail Format ................................................................................. 69
Table: Value Sales Per Outlet, 2010 estimate ..................................................................................................................................................... 70
Competitive Landscape ................................................................................................................................ 71
Table: Key Players in Serbia's Food & Drink Sector (2010) ............................................................................................................................... 71
Table: Key Players in Serbia's Mass Grocery Retail Sector (2010) ..................................................................................................................... 73
Company Analysis ........................................................................................................................................ 74
Food......................................................................................................................................................................................................................... 74
Bambi.................................................................................................................................................................................................................. 74
Mondi Serbia ...................................................................................................................................................................................................... 76
Mladost-Sid ......................................................................................................................................................................................................... 77
Sunoko ................................................................................................................................................................................................................ 78
Drink ........................................................................................................................................................................................................................ 79
Coca-Cola/IBP Beograd AD ............................................................................................................................................................................... 79
Beogradska Industrija Piva (BIP) ....................................................................................................................................................................... 80
Carlsberg Serbia/Pivara Celarevo...................................................................................................................................................................... 81
Apatinska Pivara (formerly AB InBev) ............................................................................................................................................................... 82
Arteska International Company .......................................................................................................................................................................... 83
BB Minaqua ........................................................................................................................................................................................................ 84
Knjaz Miloš ......................................................................................................................................................................................................... 85
Mass Grocery Retail ................................................................................................................................................................................................ 86
Mercator ............................................................................................................................................................................................................. 86
Veropoulos .......................................................................................................................................................................................................... 88
Delta Holding ..................................................................................................................................................................................................... 89
Metro .................................................................................................................................................................................................................. 91
BMI Methodology .......................................................................................................................................... 92
Food And Drink Business Environment Ratings ...................................................................................................................................................... 92
Ratings Methodology .......................................................................................................................................................................................... 92
Ratings Overview ................................................................................................................................................................................................ 92
Ratings System .................................................................................................................................................................................................... 92
Indicators ............................................................................................................................................................................................................ 92
Table: Limits Of Potential Returns ..................................................................................................................................................................... 93
Table: Risks To Realisation Of Potential Returns ............................................................................................................................................... 94
Weighting ............................................................................................................................................................................................................ 95
Table: Weighting ................................................................................................................................................................................................ 95
BMI Food And Drink Industry Glossary .................................................................................................................................................................. 96
Food And Drink .................................................................................................................................................................................................. 96
Mass Grocery Retail ........................................................................................................................................................................................... 96
BMI Forecasting ...................................................................................................................................................................................................... 98
How We Generate Our Industry Forecasts ......................................................................................................................................................... 98
Sourcing .............................................................................................................................................................................................................. 99




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