Boston, MA -- (ReleaseWire) -- 12/06/2012 -- The culture of consumerism is reasonably well entrenched in Malaysia given its relatively high consumption levels. As the lower and middle classes in Malaysia reap the benefits of the country's rapid economic development, the trend of premiumisation is expected to gather pace over the coming years. We expect stronger growth prospects in the higher-value food categories such as confectionery and functional foods. The halal food sector is also expected to achieve particularly robust dynamism as more companies expand their product offerings beyond non-halal products to capture burgeoning domestic and export opportunities.
Headline Industry Data (local currency)
- 2013 food consumption = +2.9%; compound annual growth rate (CAGR) forecast to 2017 = +3.1%
- 2013 soft drinks value sales = +4.7%; CAGR forecast to 2017 = +5.1%
- 2013 alcoholic drinks value sales = +3.7%; CAGR forecast to 2017 = +4.9%
- 2013 mass grocery retail sales = +9.0%; CAGR forecast to 2017 = +8.1%
Key Industry Trends
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Heineken Seals Control Of APB: In September 2012, brewing giant Heineken secured full control of Asia Pacific Breweries after the shareholders of Fraser and Neave voted in favour of the firm's SGD5.6bn (US$4.5bn) bid. Heineken has been forced to pay a hefty premium for the business, at 17X earnings before interest tax and amortisation. However, the firm's CEO has stressed that it was 'worth every dollar' owing to the firm's tremendous exposure to some of Asia's most promising beer markets, including Malaysia.
Malaysia Could Emerge As Key Growth Area For Tesco: Tesco's Asian expansion over its most recent financial year points to the firm's strategy and priorities. In the 12 months to the end of February 2012, the firm had a net gain of 415 stores in the region, of which 43 were hypermarkets, 352 were supermarkets or convenience stores and 20 were franchise stores. These figures do not include the disposal of its Japanese operations, which included 121 outlets. Of interest is the pattern of investment, with Tesco investing heavily in Thailand and South Korea but progressing relatively slowly in China despite its position as one of the region's most exciting consumer markets. With the firm facing headwinds in China and South Korea, we believe Malaysia and Thailand are likely to be the target for major investment in the short-to-medium term.
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