France. Food and Beverages Country-Sector Fact Sheet. 1. Sector Overview

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1 France Food and Beverages Country-Sector Fact Sheet 1. Sector Overview According to FDI.net (2012), the food and beverage processing sector refers to the manufacturing, processing and preservation of meat, fish, fruit, vegetables, oils and fats; manufacture of dairy products; manufacture of grain mill products, starches and starch products and prepared animals feeds; manufacture of other food products (e.g. bread, sugar, chocolate, pasta, coffee, nuts and spices); and the manufacture of bottled and canned soft drinks, fruit juices, beer, and wines. According to BMI (2012), France s total food consumption increased slightly in 2010 after the decline in Consumption grew in and is estimated to increase until Total food consumption is expected to grow by 7.5 in local currency terms over the same time period, reaching EUR142bn (excluding alcoholic beverages) in The per capita consumption is estimated to increase by 4.9 between and 2016, to reaching EUR2,195. Depicted in the graph below is France s food sales in by category and it can be seen that meal solutions accounted for the largest amount of sales followed by bakery foods and frozen processed foods. It is clear that French consumers have convenience as an influencing factor in their consumption of food. FRANCE'S FOOD SALES, ('000 TONNES) Confectionery, Sweet and Sour Snacks Spreads Ready Meals Pasta Sauces, Dressings and Condiments Dried Processed Food Canned or Preserved Food Chilled Processed Food Oils and Fats Frozen Processed Food Bakery Meal Solutions Sales ('000 Tonnes) Source: Euromonitor, 2012 Depicted in the table below are France s beverages sales in by category and here it can be seen that alcoholic beverage sales far exceed non-alcoholic sales. According to data from Business Monitor International (2012), wine and spirits were the largest contributor to drinks sales of alcoholic beverages. Carbonated drinks and bottled water were the largest contributors to non-alcoholic beverage sales in. 1

2 DRINKS SALES BY CATEGORY, SOFT DRINKS HOT DRINKS ALCOHOLIC DRINKS CATEGORY (EURm) CATEGORY (EURm) CATEGORY (EURm) Bottled Water Coffee Beer Carbonates Tea Cider Concentrates Other Hot Drinks RTDs/High Strength Premixes Fruit/ Vegetable Juices Spirits RTD Coffee 9.2 Wine RTD Tea Sports and Energy Drinks TOTAL SOFT DRINKS SALES TOTAL HOT DRINKS SALES TOTAL ALCOHOLIC DRINKS SALES Source: BMI, 2012 SWOT ANALYSIS OF FRANCE S FOOD AND BEVERAGES SECTOR STRENGTHS WEAKNESSES Key French companies have a strong reputation for technological sophistication and high research and development spending. Branded products are threatened by cheaper private-label offerings that are not subject to the complicated laws governing A highly sophisticated food culture keeps spending on food the relationship between suppliers and retailers. products high. There is still uncertainty about the government s agricultural Changing lifestyle patterns are increasing demand for easy-toprepare reform policy. foods. Microwaveable and ready-to-eat foods are likely to see a boost in volume sales. The premiumisation trend has been put on hold in the wake of the current economic downturn. Consumer concern over health issues will lead to increased sales of health food and organic food products. Food consumption has only registered marginal growth in recent years, partly due to intense price competition. France has one of world s most advanced dairy industries. OPPORTUNTIES THREATS According to the French organic food association, Agence Bio, consumers are becoming more susceptible to organic produce. A trend for a number of industrial activities to migrate away from France to lower-cost areas inside the EU or elsewhere remains a The Baromètre CSA shows that 4 in every 10 consumers threat. purchase organic products at least once a month, 23 at least once a week and 7 every day. France has fallen into recession, and consumers have become more price conscious, benefiting some food products at the The proposed changes to retail outlet openings and price expense of others. negotiations have the potential to revitalize sales of food through lower prices Growing interest in reducing healthcare expenditure and the prevalence of obesity, diabetes and similar conditions will likely result in lower sales of certain food groups and products that are high in fat, sugar and salt. Source: BMI, France s Global Trade France has consistently held a positive trade balance in its international trade of food and beverages between 2002 and. Trade in this sector increased from ZAR258.6bn in 2002 to ZAR385.3bn in, while the trade surplus increased from ZAR66.1bn in 2002 to ZAR81.6bn in. France is thus a net exporter of food and beverage products. In, total food and beverage exports from France reached ZAR233.5bn and imports reached ZAR151.8bn. Exports increased by an average of 4.1 over the ten years between 2002 and and increased by 15.3 in. France s imports of food and beverages increased by an average of 5.2 between 2002 and and increased by 14.3 in. 2

3 Value FRANCE'S GLOBAL TRADE IN FOOD AND BEVERAGES, , , , , ,000 50,000 Source: TradeMap, Exports 162, , , , , , , , , ,498 Imports 96,269 84,648 82,618 82,907 93, , , , , ,870 Trade Balance 66,127 56,867 49,854 50,849 65,012 73,382 82,459 61,592 69,710 81,629 In, the top food and beverages export from France was wine of fresh grapes valued at ZAR71.1bn. Other top exports were spirits, liqueurs, other spirit beverages, alcoholic preparations (ZAR32.2bn); bread, biscuits, wafers, cakes and pastries (ZAR12.8bn); cane or beet sugar and chemically pure sucrose, in solid form (ZAR12.7bn); malt extract; food preparations of flour, meal, starch or malt extract (ZAR11.9bn); and food preparations (ZAR11.5bn). The top food and beverages imported by France in were bread, biscuits, wafers, cakes and pastries valued at ZAR14.9bn. Other top imports were of chocolate and other food preparations containing cocoa (ZAR13.9bn); spirits, liqueurs, other spirit beverages, alcoholic preparations (ZAR10.9bn); fruit & vegetable juices, unfermented (ZAR9.4bn); food preparations (ZAR7.4bn); and prepared/preserved fish and caviar (ZAR7.1bn). RANK FRANCE S TOP 10 FOOD AND BEVERAGES EXPORTS, FRANCE S TOP 10 FOOD AND BEVERAGES IMPORTS, HS CODE GROWTH 2010 RANK HS CODE Wine of fresh grapes Spirits, liqueurs, other spirit beverages, alcoholic preparations Bread, biscuits, wafers, cakes and pastries Cane or beet sugar and chemically pure sucrose, in solid form Malt extract; food preparations of flour, meal, starch or malt extract Bread, biscuits, wafers, cakes and pastries Chocolate and other food preparations containing cocoa Spirits, liqueurs, other spirit beverages, alcoholic preparations Fruit & vegetable juices, unfermented GROWTH Food preparations Food preparations Prepared/preserved fish & caviar Chocolate and other food preparations containing cocoa Preserved fruits Ethyl alcohol & other spirits Wine of fresh grapes Mineral & aerated waters Non-alcoholic beverages (excl. water, fruit or vegetable juices) Prepared or preserved vegetables (excl. frozen) Non-alcoholic beverages (excl. water, fruit or vegetable juices and mi TOTAL FOOD AND BEVERAGES EXPORTS TOTAL FOOD AND BEVERAGES IMPORTS Source: TradeMap, 2012 The United Kingdom was the largest destination market for food and beverages exported by the France accounting for 12.3 of exports. Other top destination markets were Germany (11.9 share of exports), Belgium (10.4), United States (8.5), and Spain (5.9). In terms of growth, exports to China were the fastest growing food and beverages exports with 63.2 followed by Singapore (26.6) and Italy (22.3). 3

4 TOP 10 DESTINATION MARKETS FOR EXPORTS OF FOOD AND BEVERAGES TO FRANCE, RANK DESTINATION MARKET GROWTH SHARE 1 United Kingdom Germany Belgium United States Spain Italy Netherlands China Switzerland Singapore TOTAL EXPORTS Source: TradeMap, 2012 In, the top source market for food and beverages imported by France was Germany, accounting for 15.3 of food and beverages imports. Other top import markets were Belgium, Italy, Netherlands, and Spain. In terms of growth, imports from Brazil were the fastest growing food and beverages imports at 39.1 followed by Switzerland (26.4) and Portugal (25.6). TOP 10 SOURCE MARKETS FOR EXPORTS OF FOOD AND BEVERAGES FROM FRANCE, RANK SOURCE MARKET GROWTH SHARE 1 Germany Belgium Italy Netherlands Spain United Kingdom Switzerland Côte d'ivoire Portugal Brazil TOTAL IMPORTS Source: TradeMap, South Africa s Food and Beverages Trade with France In, food and beverages trade between France and South Africa was worth ZAR643.6m comprising of exports valued at ZAR146.4m and imports from France worth ZAR497. Between 2002 and, there was a trade deficit indicating that South Africa was a net importer of food and beverage products. Trade in food and beverages between the two countries significantly increased since 2006 as a result of a robust increase in imports while exports only slightly increased. 4

5 Value SOUTH AFRICA'S TRADE IN FOOD AND BEVERAGES WITH FRANCE, (200) (400) (600) Exports Imports Trade Balance (2.75) (15.67) (21.37) (45.47) (92.65) (216.24) (479.45) (361.81) (246.44) (350.69) The top exports from South Africa to France in were grape wines (ZAR81.6m); fruit, nut, edible plant parts, prepared/preserved (ZAR19.4m); liqueur, spirits and undenatured ethyl alcohol (ZAR16.1m); waters, non-alcoholic sweetened or flavoured beverages (ZAR8.5m); and solid cane or beet sugar and chemically pure sucrose (ZAR4.8m). The top import products were grape wines (ZAR116.6m); liqueur, spirits and under natured ethyl alcohol (ZAR101.9m); food preparations (ZAR77.4m); cereal food (ZAR44.3m); and chocolate and other foods containing cocoa (ZAR25.4m). RANK SOUTH AFRICA S TOP 10 EXPORTS TO FRANCE, SOUTH AFRICA S TOP 10 IMPORTS FROM FRANCE, RANK 1 H2204: Grape wines H2204: Grape wines H2008: Fruit, nut, edible plant parts, prepared/preserved H2208: Liqueur, spirits and undenatured ethyl alcohol H2208: Liqueur, spirits and undenatured ethyl alcohol H2106: Food preparations H2202: Waters, non-alcoholic sweetened or flavoured beverages H1701: Solid cane or beet sugar and chemically pure sucrose H1904: Cereal food H1806: Chocolate and other foods containing cocoa H1604: Prepared or preserved fish, fish eggs, caviar H1901: Malt extract, flour, dairy preparations, low cocoa H2009: Fruit and vegetable juices, not fermented or spirited H1702: Sugars, lactose, fructose, glucose, maple syrup H2106: Food preparations H2102: Yeast, dead unicellular organisms, baking powders H1704: Sugar confectionery, non-cocoa, white chocolate H2004: Vegetables, prepared, frozen H1806: Chocolate and other foods containing cocoa H2007: Jams, jellies, marmalades, fruit, nut pastes, purees 7.96 TOTAL EXPORTS TOTAL IMPORTS The figures below show the growth performance of the top 10 food and beverage products traded between South Africa and France. Food preparations were the fastest growing export product in, growing at 406. Prepared or preserved fish, fish eggs, caviar and sugar confectionery, non-cocoa, white chocolate were ranked the second and third fastest growing export products in growing at 195 and 120 respectively. Imports of yeast, dead unicellular organisms, baking powders grew by 85.5 followed by jams, jellies, marmalades, fruit, nut pastes, purees and food preparations were the fastest growing imports with import growth of 51.4 and 40.2 respectively, in. 5

6 Value GROWTH PERFOMANCE OF THE TOP 10 EXPORTS S, GROWTH PERFOMANCE OF THE TOP 10 IMPORT S, Chocolate and other foods containing cocoa Sugar confectionery, non-cocoa, white chocolate Jams, jellies, marmalades, fruit, nut pastes, purees Vegetables, prepared, frozen Food preparations Fruit and vegetable juices, not fermented or spirited Yeast, dead unicellular organisms nes, baking powders Sugars, lactose, fructose, glucose, maple syrup Prepared or preserved fish, fish eggs, caviar Malt extract, flour, dairy preparations, low cocoa Solid cane or beet sugar and chemically pure sucrose -1 Chocolate and other foods containing cocoa Waters, non-alcoholic sweetened or flavoured beverages Liqueur, spirits and undenatured ethyl alcohol Fruit, nut, edible plant parts prepared/preserved Grape wines Growth (2002-) Growth (2010-) Cereal food Food preparations Liqueur, spirits and undenatured ethyl alcohol Grape wines Growth (2002-) Growth (2010-) 2.3 Western Cape s Food and Beverages Trade with France The Western Cape accounted for 36.6 of South Africa s food and beverages trade with France in. In, food and beverages trade between France and Western Cape was worth ZAR235.5m comprising of exports valued at ZAR122.1m and import with a value of ZAR113.3m. WESTERN CAPE TRADE IN FOOD AND BEVERAGES WITH FRANCE, (100) (200) (300) (400) Exports Imports Trade Balalce ( ( ( In, the Western Cape s top exports to France were grape wines (ZAR78.6m) and fruit, nut, edible plant parts, prepared/preserved (ZAR17.1m). The import products were food preparations; fruit, nut, edible plant parts; liqueur, spirits and undenatured ethyl alcohol and grape wines. 6

7 RANK WESTERN CAPE S TOP 10 EXPORTS TO FRANCE, WESTERN CAPE S TOP 10 IMPORTS FROM FRANCE, RANK 1 H2204: Grape wines H2208: Liqueur, spirits and undenatured ethyl alcohol H2008: Fruit, nut, edible plant parts, prepared/preserved H2204: Grape wines H2208: Liqueur, spirits and undenatured ethyl alcohol H1806: Chocolate and other foods containing cocoa H1604: Prepared or preserved fish, fish eggs, caviar H2102: Yeast, dead unicellular organisms, baking powders H2009: Fruit and vegetable juices, not fermented or spirited H2007: Jams, jellies, marmalades, fruit, nut pastes, purees H1704: Sugar confectionery, non-cocoa, white chocolate H2005: Vegetables, prepared/preserved, not frozen/vinegar H1806: Chocolate and other foods containing cocoa H1905: Baked bread, pastry, wafers, rice paper, biscuits H2103: Sauce, condiments, mixed seasoning and mustard H2201: Unsweetened beverage waters, ice and snow H2202: Waters, non-alcoholic sweetened or flavoured beverages H1901: Malt extract, flour, dairy preparations, low cocoa H2101: Extracts, essences, concentrates of tea, coffee, mate H2103: Sauce, condiments, mixed seasoning and mustard 1.74 TOTAL EXPORTS TOTAL IMPORTS The figures below show the growth performance of the top 10 food and beverage products traded between Western Cape and the France. Extracts, essences, concentrates of tea, coffee, mate was the fastest growing export product in, growing at 378. Waters, non-alcoholic sweetened or flavoured beverages grew by 355 and prepared or preserved fish, fish eggs, and caviar by 172. Imports of yeast, dead unicellular organisms, baking powders grew by 206 and grape wines grew by 99 in. GROWTH PERFORMANCE OF THE TOP 10 EXPORTS S, GROWTH PERFORMANCE OF THE TOP 10 IMPORT S, Extracts, essences, concentrates of tea, coffee, mate Sauce, condiments, mixed seasoning and mustard Waters, non-alcoholic sweetened or flavoured beverages Malt extract, flour, dairy preparations, low cocoa 5.2 Sauce, condiments, mixed seasoning and mustard Unsweetened beverage waters, ice and snow Chocolate and other foods containing cocoa Baked bread, pastry, wafers, rice paper, biscuits, etc Sugar confectionery, non-cocoa, white chocolate Fruit and vegetable juices, not fermented or spirited Vegetables, prepared/preserved, not frozen/vinegar Jams, jellies, marmalades, fruit, nut pastes, purees Prepared or preserved fish, fish eggs, caviar Yeast, dead unicellular organisms, baking powders Liqueur, spirits and undenatured ethyl alcohol Chocolate and other foods containing cocoa Fruit, nut, edible plant parts nes, prepared/preserved Grape wines Grape wines Liqueur, spirits and undenatured ethyl alcohol Growth (2002-) Growth (2010-) Growth (2002-) Growth (2010-) 7

8 Value 3. FDI 3.1 Inward FDI The figure below shows inward FDI into France food and beverage sector. Between January 2003 and August 2012 a total of 188 FDI projects were attracted. These projects valued at ZAR34.6bn. During the period, a total of 10,432 jobs were created. GLOBAL INWARD FDI INTO THE FOOD & BEVERAGES SECTOR IN FRANCE, AUGUST , , , , , , Number of Projects 1, Jan - Aug 2012 Capex , , , , , , , ,413.7 Projects The table below shows France s global source markets for FDI into the food and beverage sector in terms of projects for the period January 2003 to August Germany was the leading source market with 50 investment projects representing a capital investment of ZAR9.04bn followed by the United States with 36 investment projects valued at ZAR8.7bn. FRANCE S GLOBAL FDI SOURCE MARKETS FOR FOOD & BEVERAGES, JAN AUGUST 2012 RANK SOURCE MARKETS PROJECTS PROJECTS CAPEX CAPEX COMPANIES COMPANIES 1 Germany United States Switzerland United Kingdom Netherlands Belgium Spain Japan Italy Brazil Other countries TOTAL

9 Value The top 10 global companies investing in the food and beverages sector in France are depicted in the table below. TOP 10 GLOBAL COMPANIES INVESTING IN THE SECTOR, 2003 AUGUST 2012 INVESTING COMPANY CAPEX Lidl Morpol Nestle KFC Cinquieme Saison Mars Coca-Cola Heineken Synutra International Cargill Outward FDI The figure below shows France outward FDI into the global food and beverage sector. Between January 2003 and August 2012 a total of 748 FDI projects were invested in by France, representing a total capital investment of ZAR299.1bn. During the period, a total of 275,086 jobs were created. OUTWARD FDI IN FOOD AND BEVERAGES FROM FRANCE, AUGUST , , ,000 30,000 20, Number of Projects 10, Capex 21, , , , , , , , , ,555.4 Projects The table below shows France s global outward FDI into the beverage and food and tobacco sector for the period January 2003 to August China was the largest destination market for France s food and beverage FDI with 89 investment projects, followed by Spain and Romania with 76 projects and 56 projects respectively. 9

10 FRANCE S GLOBAL FDI DESTINATION MARKETS FOR FOOD & BEVERAGES, JAN AUGUST 2012 RANK DESTINATION MARKETS PROJECTS PROJECTS CAPEX CAPEX COMPANIES COMPANIES 1 China Spain Romania Poland Russia Colombia United Kingdom Indonesia Argentina Brazil Other countries TOTAL The top 10 French companies investing in the food and beverages sector globally are depicted in the table below. TOP 10 FRENCH COMPANIES INVESTING IN THE SECTOR INVESTING COMPANY CAPEX Carrefour Carrefour Brazil Auchan Danone Carrefour Polska E.Leclerc Auchan Portugal Carrefour Columbia Geant Carrefour Romania France s FDI from South Africa For the period from January 2003 to August 2012 one FDI project was registered in the food and beverages sector from South Africa into France. The projects represent a total capital investment of ZAR28.9m, creating a total of 27 jobs. 10

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