Cote d'Ivoire Food and Drink Report Q2 2012

Includes 3 FREE quarterly updates

BMI View: We have a very positive medium term outlook for the Ivoirian food, beverage and retail sectors. Our positive view hinges on our Country Risk team's expectations for economic growth in the country over our five-year forecast period, an impressive domestic demographic picture and the currently highly underdeveloped nature of the local market, which if nothing else leaves tremendous room for growth.

Key Forecasts:

Strong per capita food consumption growth forecast of 10.5% annually out to 2016 Mass grocery retail sales growth is forecast to average 14.0% annually over the five-year period Beer sales are forecast to increase by 8% in 2012, while over our forecast period to 2016, sales growth is expected to average 6.6% annually

Key Trends:

Population Growth: In line with the wider Sub-Saharan African region, a major part of West and Central Africa's appeal to investors is its favourable population dynamics. Obviously Nigeria, with its massive population, leads the pack in this regard. However, Cote D'Ivoire's population dynamics are also a major plus point for investors. The country's already attractive 20.6mn-strong population base will grow to 24.5mn by 2020 and by a massive 98% over our entire forecast period to stand at a very healthy 40.7mn in 2050. Most notable is the age profile of the population - in 2012, 51% of Cote D'Ivoire's population is under 20 and this provides immense long-term growth opportunities for regional investors.

Formalisation of Retailing: Right throughout the region, our forecasts for Mass Grocery Retail sales growth outstrip our forecasts for Food Consumption growth, although it should be noted that both are broadly impressive. The outperformance of retail will be a result of the ongoing formalisation of the sector and the fact that it is, in most cases, coming from an exceptionally low base. The addition of just a few modern retail outlets, which cause shoppers to trade up and away from traditional independent stores and marketplaces, will have a massive impact on growth in the sector. In Cote'Ivoire, we estimate that only around 3 to 4% of grocery retail sales are accounted for by the organised sector and this provides tremendous room for growth.

Risk/Reward Ratings: Cote D'Ivoire falls in 13th place out of 16 regional markets that are ranked for Sub-Saharan Africa within BMI's Food & Drink Risk/Reward Ratings. The country scores above the regional average in terms of Rewards - an illustration of the massive growth opportunities available in the region. However, it scores well, well below the regional average in terms of Risk, highlighting the major challenge that investors face in fully realising this potential opportunity. Overall, Cote'Ivoire ranks below the SSA average in our regional ratings.